U.S. puts China, Russia on copyright piracy watch list

China, Russia and 10 other nations were targeted by the Bush administration Monday for failing to sufficiently protect U.S. producers of music, movies and other copyrighted material from widespread piracy.

The Bush administration placed the 12 countries on a “priority watch list,” which will subject them to extra scrutiny and could eventually lead to economic sanctions if the administration decides to bring trade cases before the World Trade Organization.

An additional 31 countries were placed on lower-level monitoring lists, indicating that the concerns about copyright violations in those nations did not warrant the highest level of scrutiny.

The designations occurred in a report that the administration is required to provide Congress each year highlighting problems that U.S. companies are facing around the world with copyright piracy, which they contend is costing them billions of dollars in lost sales annually.

“We must defend ideas, inventions and creativity from rip- off artists and thieves,” U.S. Trade Representative Susan C. Schwab said in a statement accompanying this year’s report.

The administration announced in April that it was filing two new trade cases against China before the World Trade Organization. One of those cases charged that China was lax in enforcing its laws on protecting U.S. copyrights and patents.

The annual report, known as a “Special 301 Report,” for the section of U.S. trade law that it covers, said China had a special stake in upgrading its protection of intellectual property rights, given that its companies would be threatened by rampant copyright piracy as they increased their own innovation.

For Russia, the report said the U.S. would be closely watching to see how Russia fulfilled the commitments it made to upgrade copyright protection as part of a U.S.-Russia accord reached last year that was seen as a key milestone in Russia’s efforts to join the WTO.

In addition to Russia and China, the 10 countries placed on the priority watch list were Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine and Venezuela.

In elevating Thailand to the priority watch list, the administration said it was concerned by a range of issues including a “deteriorating protection for patents and copyrights.”

Thailand is currently in a dispute with international drug companies including U.S.-based Abbott Laboratories over the cost of drugs to fight AIDS and other diseases.

The Thai government in January issued compulsory licenses allowing the use of much cheaper generic versions of two leading drugs in Thailand.

Representatives of U.S. companies applauded the Bush administration’s report, but Oxfam America denounced the administration for what the international development agency said was a misstatement of the rights of U.S. companies under international trade rules.

“The report ignores important international agreements signed by the U.S. government ... which clearly state that developing countries have the right to place public health and the public interest over intellectual property rules,” said Rohit Malpani, an Oxfam policy advisor.

Neil Turkewitz, an executive with the Recording Industry Assn. of America, said the administration was right to single out China and Russia for special criticism in the report.

He said that large-scale piracy of sound recordings was continuing unabated in China and that Russia was home to some of the biggest criminal enterprises involved in piracy of music as well as “some of the world’s most notorious pirate websites such as allofmp3.com.”

Dan Glickman, head of the Motion Picture Assn. of America, said the report indicated “the scope of global piracy and serves as a sobering reminder of the challenges ahead.”

The countries placed on a lower-level watch list were Belarus, Belize, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Hungary, Indonesia, Italy, Jamaica, South Korea, Kuwait, Lithuania, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Romania, Saudi Arabia, Taiwan, Tajikistan, Turkmenistan, Uzbekistan and Vietnam.

In addition, the administration said Paraguay would be subject to special monitoring to see if it was addressing copyright concerns.