USTR's Special 301 report 2019 - Indonesia

The US government announced its US Special 301 review last week, and perhaps the most interesting question is whether President Donald Trump’s US protectionist policies and provocation of trade disputes suggests any change in the Special 301 approach. The purpose of the Special 301 review is to identify US trading partners that do not adequately or effectively protect and enforce IP rights or otherwise deny market access to U.S. innovators and creators that rely on protection of IP rights.

Of course China comes in for the most criticism, given the extent of copyright piracy and trademark counterfeiting and trade secret theft among other issues. However it is probably correct to say that the larger the trading relationship the more scrutiny a country faces, so the final Report doesn’t exactly compare like with like. So China (which is supposed to be the source of 75% of the world’s fake goods) and other large trading partners always feature. Over the last 20 years most SE Asian countries have fallen off the Priority Watch List and Watch list as IP protection improved.

This year Indonesia features on the Priority Watch List and Thailand and Vietnam on the Watch lists. This is the same as 2018. The last changes for SE Asia was the downgrading of Thailand in 2017.

Indonesia the report says suffers from many problems; these are broadly:

• widespread piracy and counterfeiting and, in particular, the lack of enforcement, as well as low deterrent penalties
• conflicts between GI rules and pre-existing trademark rights and common food names
• problematic patentability criteria for incremental innovations, local manufacturing and use requirements, ease of compulsory licenses, and burdensome patentable material disclosure requirements and excessive patent annuity fees. 
• Poor protection against unfair commercial use and unauthorized disclosure of undisclosed pharma and agrochem regulatory /test data for marketing approvals
• Market  access barriers for the pharm and movie industry especially

Much of these are longstanding complaints. Weak IP enforcement for example, is an old one, which the USTR suggests needs better enforcement coordination and a specialist IP police unit. However the patent barriers were only created in the last few years. With no improvements in the longstanding complaints, the direction of travel i.e. more IPR barriers is not likely to lead to Indonesia coming off the Priority Watch List any time soon.