concerns about possible adoption of amendments to the Pharmacists Law which would weaken patent protection for pharmaceuticals and permit the unfair commercial use of test data. We will continue to consult informally with the Government of Israel in the coming months in an effort to encourage it to resolve outstanding TRIPS compliance concerns as soon as possible. Should this effort not be successful, we will review other options for addressing our concerns.
Italy: Despite five years of effort, the Government of Italy has failed to enact anti-piracy legislation that includes TRIPS-consistent penalties sufficient to provide an effective deterrent to piracy and counterfeiting. Ambassador Barshefsky and other senior Administration officials have stressed repeatedly over the past several years that the U.S. expected Italy to pass such legislation prior to the annual Special 301 review. Italy's failure to pass this important legislation is of particular concern because it has some of the lowest criminal penalties in Europe and one of the highest rates of piracy. Piracy and counterfeiting of American intellectual property in Italy continue to be relatively widespread practices, particularly with regard to piracy of video, sound recordings, computer software, books, and video games. As a result of Italy's continued failure to enact this anti-piracy legislation, USTR will conduct an out-of-cycle review of Italy in September of this year. During the period leading up to the September review, the United States will examine whether to initiate formal dispute settlement proceedings if the legislation is not enacted by that time.
Korea: Korea is being elevated to the Priority Watch List this year because of a number of longstanding issues, concerns about enforcement, and new issues relating to recent amendments to Korean copyright laws. Despite numerous U.S. attempts, including at the highest levels, and in a variety of fora, several longstanding issues remain unresolved. These issues include protection of clinical test data against unfair commercial use and disclosure, protection of pre-existing copyrighted works, providing for "linkage" between health and intellectual property authorities such that approval is not granted for the launch into the Korean market of drugs that would infringe valid patents, and market access for motion pictures. The United States also has ongoing concerns about the consistency, transparency, and effectiveness of Korean enforcement efforts, particularly with regard to piracy of U.S. computer software and books. Finally, at the end of last year, a new issue arose when the Korean National Assembly passed amendments to the Korean Copyright Act (CA) and Computer Programs Protection Act (CPPA). These amendments, as well as other issues discussed above, call into question Korea's compliance with its bilateral and international obligations, including under the WTO TRIPS Agreement and the Berne Convention. Recently, the Korean Government has indicated its willingness to engage the U.S. Government to advance progress on these issues. While this is a positive start, we look for the Korean Government to work with us to resolve these issues as soon as possible. Ambassador Barshefsky also announced today that the U.S. Government will conduct an out-of-cycle review in December to review progress on Korean intellectual property policies.
Malaysia: Over the past year, Malaysia has focused its efforts on legislation intended to strengthen IPR enforcement against piracy. These priority measures include amendment of an onerous affidavit requirement in section 42 of Malaysia's copyright law, and enactment of a law
17
