On April 30, the Office of the United States Trade Representative (USTR) released its 2009 Special 301 Report, which is an annual review of the global state of intellectual property rights (IPR) protection and enforcement. The big surprise contained in the 2009 edition of the Report was the inclusion of Canada on the “Priority Watch” list when it had previously been included only on the lower “Watch” list. In so doing, the USTR cited “growing concerns” in Canada.

While the USTR made note of the traditional high level of cooperation between the Canadian and American governments on many IPR initiatives, the Report expressed concern with Canada’s delay in the implementation of copyright reforms, as the Canadian government has previously committed to enact in 2007 and 2008. Without explicitly referring to Bill C-61, An Act to amend the Copyright Act, which died on the order paper in September 2008, the Report made note of Canada’s “failure to accede to and implement the WIPO Internet Treaties, which Canada signed in 1997.” The Report further urged Canada to take more effective action against trade in counterfeit and pirated products within Canada, and in particular with respect to border enforcement measures.

Inclusion on the Priority Watch list is a wake-up call and will increase pressure on the government to align Canada’s intellectual property laws with international obligations. The government has signalled that it will be working on copyright reforms over the summer. It is expected that revisions to the Copyright Act will be tabled this year.

Other points of interest in the Special 301 Report included a discussion on the growth of Internet and digital piracy. The Report noted that “Internet piracy is rapidly supplanting physical piracy in many markets around the world,” and urged signatory countries to the WIPO Internet Treaties to expedite ratification and implementation of the treaties. The Report also commented on the WTO Dispute Settlement Body decision, which ruled largely in the United States’s favor against China, stating that “the United States looks forward to working with China to implement the Dispute Settlement Body’s recommendations and rulings in this dispute.”

Finally, the Report commented on some positive developments in intellectual property rights enforcement around the world. It noted that due to the South Korean Government’s continuing improvement of its IPR regime, the country would be removed from the Watch list for the first time. The Report also praised Taiwan for implementing its “Ministry of Education Action Plan for Protecting IPR on School Campuses,” for enacting new laws with respect to ISP liability, and for key prosecutions of P2P network operators. And the Report praised China for its IPR enforcement during the Beijing Olympics: “This experience shows that when the Chinese Government chooses to exercise its political will to deal with an IPR problem, it can yield results.”