U.S. Calls Out Trading Partners with Serious Intellectual Property Rights Deficiencies

“Special 301 Report” Issued – Countries’ Legal and Enforcement Problems Hurt U.S. Export Sales

WASHINGTON, DC – The Entertainment Software Association (ESA) today commended the efforts of United States Trade Representative (USTR) Ron Kirk for shining a light on practices that hurt U.S. sales of entertainment software in foreign markets in the annual “Special 301” Report. USTR’s report, released earlier today, identifies countries that deny adequate protection of intellectual property rights or deny fair market access to American businesses that rely on intellectual property protection.

“Illicit circumvention devices such as mod chips and game copiers are facilitating online piracy, which can cripple our industry’s extraordinary innovation,” said Michael D. Gallagher, president and CEO of the ESA, which represents U.S. computer and video game publishers. “We commend the USTR and other U.S. government agencies that are bringing these issues to the attention of our trading partners.”

In its report, the USTR noted that “Internet piracy is a significant concern with respect to a number of trading partners, including Brazil, Canada, China, India, Italy, Russia, Spain and Ukraine.” It identified 11countries for placement on the “Priority Watch List,” including:

• Canada, which has, according to USTR, “not completed the legislative reforms in the copyright area that are necessary to deliver on its commitments,” including “implementation of the WIPO Internet Treaties, which Canada signed in 1997”;
• China, noting that “market access barriers create additional incentives to infringe products such as movies, video games, and books, and lead consumers to the black market, thereby compounding the severe problems already faced by China’s enforcement authorities.”

USTR also identified 29 countries for placement on the “Watch List,” including:

• Spain, noting that the “United States remains concerned about particularly significant Internet piracy in Spain, and strongly urges prompt and effective action to address the issue. Spain’s existing legal and regulatory framework has not led to cooperation between Internet service providers (ISPs) and rights holders to reduce online piracy”;
• Mexico, as “concerns . . . remain over enforcement procedures and the inconsistent issuance of deterrent penalties”;
• Malaysia, as ”piracy and counterfeiting remain widespread, and enforcement efforts continue to decline”; and
• Brazil, citing remaining concerns over “border enforcement and the lack of expeditious and deterrent sentences.”

“President Obama has underscored the importance of doubling exports over the next five years in order to spur job growth. The entertainment software industry is well positioned to contribute to this initiative, as we produce game products that the world desires,” said Gallagher. “We appreciate and benefit from the assistance that is provided by the Administration, USTR and numerous agencies charged with improving protections for U.S. intellectual property.”

Many of the countries identified in the report had been singled out by the Entertainment Software Association for failure to provide adequate protection for entertainment software products sold in their markets. In February, ESA brought industry concerns to the attention of USTR through the International Intellectual Property Alliance (IIPA). IIPA’s February 2010 Special 301 public submission to USTR discussed copyright protection, enforcement, and market access problems in 39 countries/territories, and recommended that 35 be placed on a Special 301 list. IIPA’s Special 301 submission is available at http://www.iipa.com/2010_SPEC301_TOC.htm.

The Entertainment Software Association is the U.S. association dedicated to serving the business and public affairs needs of companies publishing interactive games for video game consoles, handheld devices, personal computers, and the Internet. The ESA offers services to interactive entertainment software publishers including a global anti-piracy program, owning the Electronic Entertainment Expo, business and consumer research, federal and state government relations, First Amendment and intellectual property protection efforts. For more information, please visit www.theESA.com.