In 2009, the Office of the United States Trade Representative (“USTR”), a U.S. agency charged with the development and coordination of trade with foreign governments, added Canada to its “Priority Watch List” in its annual Special 301 Report (“the Report”). The Report provides a yearly review of the state of intellectual property rights (“IPR”) protection and enforcement as regards various U.S. trading partners. This year, Canada was listed as a trade partner that has attracted significant concern in the area of internet and digital piracy.

According to the USTR, Canada’s place on the Priority Watch List is due to the Canadian government’s failure to adopt and implement key copyright reforms in furtherance of Canada’s official commitments to improving its copyright law. The report recognizes that Canada made some efforts in 2007 and 2008 in this regard. However, according to the USTR, Canada failed to implement legislative changes following its execution of the WIPO Internet Treaties in 1997. The Report denounces Canada’s border control measures with respect to IPR protection and enforcement. More specifically, the USTR suggests that Canadian legislation should be amended in order to allow customs officers to seize products suspected of being counterfeit or pirated without first needing to obtain a court order.

In addition to Canada, other countries singled out in the Priority Watch List include Algeria, Argentina, Chile, China, India, Indonesia, Israel, Pakistan, Russia, Thailand and Venezuela. All these trade partners of the U.S. will be subject to an increase in bilateral attention by the U.S. regarding each of their reported deficiencies, and the U.S. may apply sanctions if their commitments are not fulfilled. Canada’s position in the 2009 edition of the Report constitutes a downgrade from last year’s edition, where Canada was listed in the “Watch List” section only.

Canada’s addition to the USTR’s Priority Watch List stems from the Canadian government not adopting the copyright reform that was announced following the 2007 Speech from the Throne. Despite the introduction of Bill C-61 (entitled An Act to amend the Copyright Act) in June 2008, the adoption of the proposed legislative amendments was interrupted by the federal elections process in October 2008, thus delaying any reforms to Canadian copyright law.

This year, many interested parties will watch for the possible reintroduction of a bill to amend the Copyright Act by Parliament, which will reactivate Canada’s copyright reform. Recently, the Canadian Minister of Industry and the Minister of Canadian Heritage announced the commencement of their consultation process for reforms to the Copyright Act, which will take place through September 13, 2009. This consultation process includes the ability of the public to make submissions online through a newly created website, located at www.copyrightconsultation.ca, and through town hall discussions. The federal government hopes to table legislation this Fall and have the legislation passed before Christmas 2009.