U.S. Trade Rep Report ID's Nations Needing Stronger IP Protections

 On April 29, the Office of the U.S. Trade Representative released its 2025 Special 301 Report. Based on an annual review of the state of intellectual property (IP) protection and enforcement in foreign nations, the 2025 Special 301 Report identifies "law, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers, which, in turn, harm American workers whose livelihoods are tied to America’s innovation- and creativity-driven sectors." 

Mexico continues to suffer from very high rates of copyright piracy, including through online streaming, peer-to-peer file sharing, direct downloads, stream-ripping, illicit streaming devices and apps, circumvention devices for video games and consoles, and physical media. As broadband access increases, online piracy has been increasing, and stakeholders report that Mexico has one of the highest rates of music and video game piracy in the world. A barrier to effective criminal copyright enforcement is the requirement to prove a direct economic benefit to the infringer and the submission of a legitimate physical copy of the pirated content, even if the pirated copies were distributed online. The 'direct economic benefit' requirement also prevents effective criminal enforcement against not-for-profit acts of piracy, such as interrupting and distributing cable and satellite signals. According to stakeholders, civil copyright enforcement is difficult and expensive due to the lack of secondary liability for Internet service providers (ISPs), no pre-established damages, no lost profit recovery, no recovery of attorney fees, and lengthy court cases.

The 2025 Special 301 Report identifies foreign countries that the Trump Administration plans to engage during the year ahead to improve legal protections for Americans' copyrighted property and other IP overseas. Hopefully, those efforts will bear fruit and better safeguard the value of American-owned creative works. 

 

Focusing here on copyrights, areas of concern covered in the report include, "challenges with border and criminal enforcement against counterfeits, including in the online environment," "high levels of online and broadcast piracy, including through illicit streaming devices," and "systemic issues regarding IP protection and enforcement, as well as market access."

 

According to the report, "during the review period, countries such as Argentina, Bulgaria, Canada, Chile, China, Colombia, Ecuador, Guatemala, India, Mexico, the Netherlands, Pakistan, Poland, Romania, Russia, Switzerland, Thailand, and Vietnam had high levels of online piracy and lacked effective enforcement." It observed that "stream-ripping was reportedly popular in countries such as Canada, Chile, India, Mexico, Nigeria, Russia, and Switzerland."

 

Furthermore: "Stakeholders continue to report notable levels of piracy through ISDs and illicit IPTV apps, including in Algeria, Argentina, Brazil, Canada, Chile, China, Guatemala, Hong Kong, India, Indonesia, Jordan, Mexico, Morocco, Singapore, Switzerland, Taiwan, Thailand, the United Arab Emirates, and Vietnam. China, in particular, is a manufacturing hub for these devices."

 

Also, "[t]he proliferation of 'camcords' – that is high-quality unlawful video recordings of new movies shown in theaters – continues to be a significant trade problem" in Russia, China, and India. The report stated that some foreign countries need to update their laws to deter such conduct. Apparently, "the requirement in some countries that a law enforcement officer must observe a person camcording and then prove that the person is circulating the unlawfully recorded movie before intervening often precludes effective enforcement." The report added that countries such as Argentina, Brazil, Ecuador, and Russia do not effectively criminalize unauthorized camcording in theaters. 

 

Along with ongoing challenges and concerns regarding online copyright piracy in countries such as China and Russia, the report also spotlighted Mexico: 

Mexico continues to suffer from very high rates of copyright piracy, including through online streaming, peer-to-peer file sharing, direct downloads, stream-ripping, illicit streaming devices and apps, circumvention devices for video games and consoles, and physical media. As broadband access increases, online piracy has been increasing, and stakeholders report that Mexico has one of the highest rates of music and video game piracy in the world. A barrier to effective criminal copyright enforcement is the requirement to prove a direct economic benefit to the infringer and the submission of a legitimate physical copy of the pirated content, even if the pirated copies were distributed online. The 'direct economic benefit' requirement also prevents effective criminal enforcement against not-for-profit acts of piracy, such as interrupting and distributing cable and satellite signals. According to stakeholders, civil copyright enforcement is difficult and expensive due to the lack of secondary liability for Internet service providers (ISPs), no pre-established damages, no lost profit recovery, no recovery of attorney fees, and lengthy court cases.

In the year ahead, we will see if the Trump Administration is successful in prompting improvements in copyright protections for Americans in those nations identified by the 2025 Special 301 Report.

USTR Report Identifies Online Copyright Piracy Operations in Foreign Nations

On January 8, the Office of the U.S. Trade Representative (USTR) released its "2024 Review of Notorious Markets for Counterfeiting and Piracy" – also known as its Notorious Markets List (NML). The NLM “highlights prominent and illustrative examples of online and physical markets that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting," with a goal "to motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting." 

The NML noted law enforcement actions taken in 2024 by foreign nations, in some instances in partnership with the US Department of Justice, against pirate streaming services, including pirate-enabled Internet Protocol television (IPTV) services that rely on ad-supported "cyberlocker" sites to facilitate the storage and distribution of pirated content. Also, the NML noted that many copyright owners who made filings in the US Trade Representative’s proceeding raised continued concerns about "bulletproof" Internet service providers that facilitate piracy through avowed leniency in permitting users to upload and distribute infringing content, hiding their locations, and refusing to respond to takedown requests from copyright owners. Additionally, the NML listed some websites across the globe that are known to traffic in infringing content as well as physical market locations in foreign nations where physical copies of infringing are trafficked. 

 

The U.S. Constitution's Article I, Section 8 Copyright Clause recognizes that copyrighted property deserves to be secured from online and physical piracy. My February 2024 Perspectives from FSF Scholars, "Congress and the Administration Should Move Against Online Copyright Piracy," points to stepped-up criminal prosecutions against mass online piracy operations as one way of securing copyrighted property. As pointed out in the 2024 NML, copyright piracy is a serious problem and it's one the incoming Trump Administration should make solid efforts to combat. Indeed, as explained in a June 2021 Perspectives from FSF Scholars, "Fighting Online Piracy Will Boost American Economy and Jobs."

USTR Report: Foreign Nations Should Step Up Efforts to Curb Online Copyright Piracy

On April 26, the Office of the U.S. Trade Representative (USTR) released its 2023 Special 301 Report on intellectual property (IP) enforcement and protection by our nation's trading partners. The Section 301 Report provides an overview of various initiatives by the Administration to promote stronger protections for Americans' IP overseas, tracks recent trends in other nations regarding IP, and offers succinct status reports on IP protections and enforcement – or lack thereof – in individual countries. 

One area of attention in the Section 301 Report is online piracy. According to the report, in 2022 and early 2023, "countries such as Argentina, Bulgaria, Canada, Chile, China, Columbia, the Dominican Republic, India, Mexico, the Netherlands, Pakistan, Romania, Russia, Switzerland, Thailand, Ukraine, and Vietnam had high levels of online piracy and lacked effective enforcement." In particular, the report identified high incidence of music piracy by the use of "stream-ripping" software to create unlawful copies of songs in Canada, India, Korea (the report never specified North or South), Mexico, Russia, Switzerland, Ukraine, and the United Arab Emirates. 

Additionally, the Section 301 report called attention to the use of illicit streaming devices (ISDs) to facilitate unauthorized streaming of copyrighted video content offered by illicit Internet Protocol television (IPTV) services. As the report observed: "Today, there are many illegal IPTV services worldwide, many of which are subscription-based, for-profit services with vast and complex technical infrastructures." Significant levels of piracy via ISDs and illicit IPTV apps reportedly takes place in Argentina, Brazil, Canada, Chile, China, Guatemala, Hong Kong, India, Indonesia, Iraq, Jordan, Mexico, Morocco, Singapore, Switzerland, Taiwan, Thailand, Tunisia, and Vietnam. And report rightly observes that online piratical activities inflict substantial economic harm on American creators of copyrighted works and undermine the competitive viability of legitimate online platforms for distributing creative content. 

 

The Section 301 report ought to be a reminder of the need for the U.S. to keep up pressure on foreign nations that do not take IP protection and enforcement seriously and turn a blind eye to online copyright piracy and other forms of IP theft and counterfeiting. In our book, Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform(Carolina Academic Press, 2020), Free State Foundation President Randolph May and I provide a brief history of early U.S. efforts to secure copyright protections for Americans' creative works in foreign countries. Our book also addresses the need for domestic criminal copyright enforcement against large-scale commercial piracy operations as well as the need for strong copyright protections in free trade agreements.  

US Trade Representative Report on Global IP Threats Focuses on China

On April 27, 2022, the Office of the United States Trade Representative (USTR) released the 2022 edition of its annual Special 301 Report (Report). The Report identifies 27 trading-partner nations where the threat to American Intellectual Property (IP) rights is particularly high.

Emphasizing that "[c]ombating … unfair trade policies will encourage domestic investment in the United States, foster American innovation and creativity, and increase economic security for American workers and families," the Report places seven countries – Argentina, Chile, China, India, Indonesia, Russia, and Venezuela – on a "Priority Watch List" and twenty others on a "Watch List."

Among other concerns, the Report focuses on counterfeits, both physical and digital; online and broadcast piracy; trade secret protections; and "indigenous innovation" policies.

China, given statements by government officials suggesting that its approach to IP "should serve the needs of domestic innovation-driven development" at the expense of foreign IP rights holders, receives the lion's share of the Report's attention. Forced technology transfers, onerous licensing terms, IP-centered hacking, counterfeiting, and bad-faith trademarks are just some of the issues specific to China that the Report discusses.

Ukraine, which appeared on the "Priority Watch List" in the 2021 Special 301 Report, is excluded from the 2022 Report in light of its "premeditated and unprovoked further invasion" by Russia earlier this year. Saudi Arabia, meanwhile, was removed from the list after implementing measures to improve its enforcement of IP rights.

The Report also targets the European Union's geographical indications (GI) policies, which can cause problems for certain U.S. trademark holders.

In a March 2022 post to the Free State Foundation's blog, I noted the release of a related USTR annual report, the Notorious Markets List, which "identifies illustrative examples of online and physical markets that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial copyright piracy and trademark counterfeiting."

2021 List of Notorious Piracy, Counterfeiting Markets Released

On February 17, 2022, the Office of the United States Trade Representative (USTR) released the eleventh edition of the Notorious Markets List (NML), its annual overview of the most glaring hotbeds, virtual and physical, for counterfeit goods and pirated content.

Officially titled the "2021 Review of Notorious Markets for Counterfeiting and Piracy," this most-recent NML provides a summary of markets "that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting."

The NML, which incorporates responses from the public to a Request for Comments published in the Federal Register in August of last year, is designed "to increase public awareness and help market operators and governments prioritize intellectual property enforcement efforts that protect American businesses and their workers."

(Incidentally, the NML is separate from, but related to, USTR's "Special 301 Report," a congressionally mandated yearly summary "of the global state of intellectual property (IP) rights protection and enforcement.")

The theft of copyrighted material is a serious criminal problem with massive financial implications for creative industries. Citing a U.S. Chamber of Commerce report, the NML notes that piracy "in 2019 cost the U.S. economy an estimated $29.2 billion in lost revenue." Accordingly, one of the goals of the NML is to "motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting."

The 2021 edition of the NML highlights 42 online destinations and 35 geographic locations where the manufacture of counterfeit goods and the theft of copyrighted material run most rampant. The latter includes applications like Popcorn Time ("Known as the 'Netflix of piracy'") and websites such as ThePirateBay ("the most frequently visited bittorrent index site in the world").

In addition, the NML reports on enforcement-related developments, concluding that there have been "notable efforts" and "impressive results" in the ongoing fight to rein in online piracy enabled by Internet protocol television (IPTV) apps and physical illicit streaming devices (ISDs).

However, the NML also acknowledges commenters' serious concerns regarding the existence and continued evolution of what it describes as a "complex ecosystem" facilitating efforts to steal, and profit from, copyrighted content. One that includes "domain name registries and registrars, reverse proxy and other anonymization services, hosting providers, caching services, advertisers and advertisement placement networks, payment processors, social media platforms, and search engines."

A related development of heightened concern involves what the NML describes as "piracy-as-a-service" – that is, comprehensive wholesale offerings that make it even easier for a would-be pirate by providing all of the required tools: "website templates that facilitate the creation of streaming websites, databases of infringing content, dashboards that allow a pirate IPTV operator to oversee the infrastructure of their service, IPTV panels used for generating and distributing playlists of pirate IPTV channels, and hosting providers that specialize in servicing infringers."

IP Commission Recommends Policies to Protect Americans from Theft

On March 15, the Commission on the Theft of American Intellectual Property released its 2021 review report containing policy recommendations for strengthening protections for American intellectual property from theft by China and pirates in other foreign nations. As the IP Commission's report points out, "IP-intensive industries support more than 45 million U.S. jobs," but IP theft inflicts on the U.S. economy hundreds of billions in annual losses as well as reduced investment and innovation. The report's policy recommendations include statutory authorization for the Secretary of Commerce to be the principal officer on all aspects of IP protection as well as authorization for the U.S. Trade Representative to develop and implement a national IP protection strategy and coordinate interagency efforts. It also recommends that U.S. policy make it a goal to delegitimize communist Chinese business efforts that are dependent on IP theft. Without staking definitive positions here on the report's recommendations, suffice to say they deserve careful consideration. Additionally, the IP Commission released a backgrounder that describes recent and ongoing legislative efforts to strengthen American IP protections. 

As mentioned in previous blog posts, the IP Commission has issued important reports that highlight the massive economic losses and harms suffered by U.S. innovators and our economy due to theft of copyrighted works, patented inventions, and other forms of IP. The 117th Congress and federal agencies must make protection of American IP for foreign bad actors in communist China and other nations. 

Consumer Survey Shows the Dangers of Malware from Video Piracy

A survey released on June 22 by the U.S. consumers by the Digital Citizens Alliance offers additional evidence of the strong link between video piracy and malware. According to the Digital Citizens Alliance, 13% of respondents admitted to using devices like Kodi boxes or jail-broken Amazon Firesticks to view pirated copies of copyrighted movies and TV shows. Of those users of piracy devices, 49% reported experiencing malware in the last year and 25% reported a malware problem in the prior three months. Check out the Digital Citizens Alliance website – including its handy infographic – for more on the survey's findings.

In a June blog post, I noted the dangers of malicious software to users of illicit streaming devices and illegal IPTV services. Those dangers were the issue focus of the U.S. Trade Representative's 2019 Review of Notorious Markets Report. FSF President Randolph May and I also addressed the dangers of malware to users of illicit streaming devices and illegal IPTV services in our newest book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform.

Piracy of copyrighted video content is violation of the exclusive property rights of copyright owners, and therefore wrong in itself. But as the Digital Citizens Alliance's survey reminds us, video piracy also poses harms to the viewers of pirated content.

U.S. Trade Rep's Notorious Markets Report Tackles Online Copyright Piracy

Today, Free State Foundation President Randolph May and I published a Perspectives from FSF Scholars paper titled "Modernize Copyright Protections to Combat Worldwide Online Piracy." The short paper discusses the U.S. Trade Representative's "Special 301 Report" and the need for updated measures to combat online piracy of copyrighted movies, TV, and music.

The U.S. Trade Representative released the Special 301 Report alongside a second report: the 2019 Review of Notorious Markets for Counterfeiting and Piracy. The Notorious Markets Report "highlights prominent and illustrative examples of online and physical markets that reportedly engage in or facilitate substantial privacy or counterfeiting. A goal of the [Notorious Markets List] is to motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting."

This year's Notorious Markets Report includes e-commerce platforms and related online third-party marketplaces along with physical markets that traffic in counterfeit and pirated goods. The Report calls on third party marketplaces to do more to curb such trafficking, and endorsed the steps urged by the Department of Homeland Security in a report released in January of this year.

Additionally, this year's Notorious Markets Report features the nexus between malware and piracy as a focus issue. Dangerous malware is frequently involved in the payment processes or embedded with the pirated content, putting financial and other data of users at risk. Purchasing movies, TV, music and other content from legitimate vendors is therefore a matter of consumer safety. The connection between malware and copyright piracy is also addressed in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform.

We have called attention to previous editions of the Notorious Markets Report in blog posts from 2019 and 2018.

Presidential Memorandum Addresses China’s IP Theft and Forced Technology Transfer Practices

On March 22, President Trump signed a “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation.” The Memorandum explains that the U.S. Trade Representative’s Section 301 investigation into China’s practices involving IP theft and forced technology transfers supports four findings:

First, China uses foreign ownership restrictions, including joint venture requirements, equity limitations, and other investment restrictions, to require or pressure technology transfer from U.S. companies to Chinese entities.  China also uses administrative review and licensing procedures to require or pressure technology transfer, which, inter alia, undermines the value of U.S. investments and technology and weakens the global competitiveness of U.S. firms. 

Second, China imposes substantial restrictions on, and intervenes in, U.S. firms’ investments and activities, including through restrictions on technology licensing terms.  These restrictions deprive U.S. technology owners of the ability to bargain and set market-based terms for technology transfer.  As a result, U.S. companies seeking to license technologies must do so on terms that unfairly favor Chinese recipients. 

Third, China directs and facilitates the systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and to generate large-scale technology transfer in industries deemed important by Chinese government industrial plans. 

Fourth, China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies.  These actions provide the Chinese government with unauthorized access to intellectual property, trade secrets, or confidential business information, including technical data, negotiating positions, and sensitive and proprietary internal business communications, and they also support China’s strategic development goals, including its science and technology advancement, military modernization, and economic development.

The Presidential Memorandum directs the Trade Representative to take action to address unreasonable or discriminatory practices by China that burden or restrict U.S. Commerce. Such actions include consideration of “increased tariffs on goods from China” and pursuit of “dispute settlement in the World Trade Organization (WTO) to address China’s discriminatory licensing practices.” President Trump’s Memorandum also calls for possible imposition of investment restrictions, requiring the Secretary of Treasury to propose ways “to address concerns about investment in the United States directed or facilitated by China in industries or technologies deemed important to the United States.”

A succinct overview of the Presidential Memorandum regarding Chinese-related IP theft and forced technology transfer practices as well as timeframes for implementing responsive restrictions is provided by Sarah Westwood’s March 22 article in the Washington Examiner.

IP Theft Commission Calls for New Policies to Combat IP Theft By Chinese Companies

The IP Theft Commission has issued a slate of policy recommendations in connection with the Office of the U.S. Trade Representative’s current investigation of China’s practices relating to intellectual property (IP) theft and forced technology transfer.

As noted in a prior blog post, at the prompting of an August 2017 memorandum issued by President Trump, U.S. Trade Representative Robert Lighthizer opened the investigation pursuant to Section 301 of the Trade Act of 1974.

Among the IP Theft Commission’s recommendations:

• Use and expand the authority of the executive branch to deny access to the U.S. market and banking system to Chinese and other foreign companies that steal and benefit from stolen American IP.
• Create new national policy centers that coordinate efforts across relevant agencies, including the Department of Commerce and the Department of Treasury, to monitor and protect American IP.
• Establish multilateral policy dialogues with Japan, the European Union, Australia, South Korea, Singapore, and other states that share interests in protecting IP to strengthen policies to harmonize national, legal, and regulatory frameworks and to share information.

U.S. Trade Representative Report Spotlights Rogue Piracy Websites and Devices

Online piracy deprives copyright owners of their exclusive rights to the proceeds of their creative works and causes billion-dollar damages to the U.S. economy each year. Identifying large-scale intellectual property piracy operations is an important part of combatting such harmful and unlawful activities. The U.S. Trade Representative's annual report on Notorious Markets focuses on online copyright piracy involving stream-ripping websites and illicit streaming devices. The report’s publication exerts pressure on foreign governments and private entities to curtail IP piracy in their vicinities. 

Released on January 10, the U.S. Trade Representative’s report for the year 2017 includes a “Notorious Markets List” intended to highlight “prominent and illustrative examples of online and physical marketplaces that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial [copyright] piracy and [trademark] counterfeiting.” According to the report’s press release: “Imports in counterfeit and pirated physical products is estimated at nearly half a trillion dollars.”Publication of the of Notorious Markets List is intended “to motivate appropriate action by owners, operators, and service providers in the private sector of these and similar markets, as well as governments, to reduce piracy and counterfeiting.” 

The Notorious Markets List identifies the stream-ripping websites that, without authorization, convert copyrighted music and video content from licensed streaming sites into files that are downloadable by Internet end users. The Notorious Markets List draws particular attention to online piracy sites funded by ad revenue. The report cites a whiteBULLET report of the top 5,000 IP-infringing website URLs in the U.S., European Union, and Australia, which found that “about 25-30% of advertising on websites posing an IP risk are from major brands.” The List specifically names piracy sites – or alleged piracy sites – operated by foreign entities and/or hosted in foreign nations, such as France, Russia, and Vietnam. 

Further, Internet end users seeking unauthorized access to copyrighted content can be harmed by online piracy. The report observed that online piracy sites “actively and surreptitiously install malware on users’ computers, commit advertisement fraud, and enable phishing scams that steal personal information, all to increase their unlawful profits.” And it cited a July 2016 Digital Citizens Alliance report that one-third of copyrighted content theft sites “expose consumers to malware and other risks.” 

The 2017 Notorious Markets Report also focused on the issue of illicit streaming devices (ISDs). Using piracy apps, ISDs stream or download pirated content from the Internet. According to the report, ISDs can be “fully loaded” at the time of sale with piracy-enabling capabilities or ISDs can be “combined with add-ons after purchase” to access pirated content. 

Under Section 106 of the Copyright Act, copyright owners of sound recordings, motion pictures, and other audiovisual works have exclusive rights over the distribution of their works. Copyright owners negotiate detailed licensing agreement for rights to stream or download copyrighted content to retail consumers. But ISD-enabled piracy violates the exclusive rights of copyright owners and also impairs their contract rights contained in licensing agreement terms of service. 

The 2017 Notorious Markets Report describes the economic consequences: “The growth of ISDs is a troubling threat to the pay TV and other content industries and undermines incentives for companies to improve services or offer a greater selection of content in more markets.” Citing findings published by Sandvine in November of 2017, the report states: “ISD piracy ecosystem, including unlawful device sellers and unlicensed video providers and video hosts, stands to bring in revenue of an estimated $840 million a year in North America alone, at a cost to the entertainment industry of roughly $4-5 billion a year.” Correctly, the report deems it “critical” for governments and private industries to fight threats from growing ISD piracy. 

On the good news side, the report explained why certain online piracy sites were removed from the prior year’s Notorious Markets List, thanks largely to civil and criminal enforcement efforts by cooperative foreign governments and industries. The U.S. Trade Representative rightly commended those overseas anti-piracy efforts. 

International engagement is essential to protecting the exclusive rights of U.S. copyright holders abroad. The U.S. Trade Representative performs a vital function in this regard. Hopefully, the 2017 Notorious Markets Report will prompt stronger enforcement efforts against copyright violations by stream-ripping sites, illicit streaming devices, and other piracy-enabling platforms in 2018.