enforcement occurred in 2004, when four optical disc plants closed voluntarily, but reopened when it became apparent that the Government of Pakistan did not intend to impose any penalties for continued activities related to piracy. Additional concerns include lack of protection against the unfair commercial use of data submitted for marketing approval of pharmaceutical and agricultural chemical products, lack of trademark enforcement, copyright piracy beyond optical media (e.g., book piracy), the emergence of pre-release sound recordings and motion pictures, and lax IPR enforcement overall. The United States also remains concerned over a 2002 ordinance that seriously undermined WTO-required improvements that Pakistan made to its patent law in 2000. The United States urges Pakistan to intensify its efforts to improve IPR protection and enforcement.
REPUBLIC OF THE PHILIPPINES
The Philippines will remain on the Priority Watch List in 2005. USTR will conduct an out-of-cycle review to monitor progress on IPR issues and possibly to reassess the Philippines' placement on the Special 301 list. The Philippines made significant progress in 2004 which the U.S. copyright industry noted could lead, if continued, to the elimination of optical media piracy in the Philippines. These important improvements included the passage of the Optical Media Act in February 2004, the creation of the Optical Media Board, accession to the WIPO Internet Treaties, improved coordination of the groups responsible for IPR enforcement, and an increased number of raids of production facilities and retail establishments. The Philippines also implemented the Optical Media Act in early 2005, which should enable Philippine authorities to take decisive action against pirate optical media production facilities. We are encouraged by the notable single seizure of optical discs (over $8 million worth of optical discs) in December 2004. However, despite these improvements, U.S. industry continues to raise serious concerns about high levels of copyright piracy and trademark counterfeiting, including book piracy, increasing levels of pirated optical media imported into the country, and pervasive end user software piracy. The U.S. copyright and trademark industries also report continued difficulty protecting their rights through the Philippine legal system due to low conviction rates and imposition of non-deterrent sentences. Trademark infringement in a variety of product lines also is widespread, with counterfeit merchandise openly available in both legitimate and illegitimate venues. The levels of illegal production and consumption of optical media remain consistently high. The U.S. copyright industry estimated its losses due to copyright piracy in the Philippines at $139 million in 2004. Enforcement efforts such as raids and seizures often have only a temporary effect due to ineffective post-raid follow-up, including prosecution. The U.S. copyright industry reports that counterfeit goods from China, Malaysia, Hong Kong, and Thailand continue to enter the Philippines in large quantities due to weak IPR border enforcement. In response, the Bureau of Customs created a permanent IPR unit in September 2003 to investigate all shipments of counterfeit and pirated goods, but U.S. industry reports that this IPR unit has had inadequate staff and other resources since its inception, and thus has had minimal success. It appears that domestic enforcement in general suffers from lack of sufficient resources, training, and interagency coordination, which has led to ineffective post-raid management and a growing backlog of cases in the judicial system. We also urge the Philippine Government to implement copyright provisions to make its domestic law consistent with its obligations under the WIPO Internet Treaties, which it ratified in 2002. The United States will use the bilateral Trade and Investment Framework Agreement (TIFA) and the out-of-cycle review to assist the Government of Philippines with strengthening its IPR regime.
