12/20. The Office of the U.S. Trade Representative (OUSTR)
released a report [6 pages in PDF] titled
"Out-of-Cycle Review of Notorious Markets".
Ron Kirk (at right), the USTR, stated in a
that "Piracy and counterfeiting continue to present a serious challenge to the
innovation and creativity that is essential to supporting American jobs and
creating economic growth around the world. The notorious markets highlighted in
this review negatively impact legitimate businesses and industries of all sizes
that rely on intellectual property to protect their goods and services".
This report states that notorious markets are "selected
markets, including ones on the Internet, that are reportedly engaged in piracy
and counterfeiting, according to information submitted to the" OUSTR.
It adds that they "are marketplaces that have
been the subject of enforcement action or that may merit further investigation
for possible intellectual property rights infringements. The scale and
popularity of these markets can cause economic harm to U.S. and other IP right
This report lists web sites that might be targeted by the Department of
Justice (DOJ) if the Congress were to enact into law HR 3261
"Stop Online Piracy Act" or "SOPA", which is currently under
consideration by the House Judiciary
Committee (HJC). This report also lists physical markets in other countries.
Steve Metalitz, counsel to the International
Intellectual Property Alliance (IIPA), stated in a
release that "We are extremely
grateful for the U.S. Government’s enhanced focus on notorious piracy markets
highlighted in today’s announcement. This focus has clearly gotten the attention
of foreign governments and led to some notable developments in some of the
markets previously listed." The IIPA represents the major intellectual property
groups -- MPAA, RIAA, BSA, ESA, IFTA, AAP, and NMPA.
Notorious Markets List. This report states that since the release of the last notorious
markets report in February "several markets took action to address the widespread
availability of pirated or counterfeit goods". These include the "Chinese website,
Baidu", the "Ladies Market in Hong Kong", and the "Savelovskiy Market in
Russia". Hence, the OUSTR removed these markets from its "Notorious Markets
The just released report lists a class of Russian web sites identified as
"Allofmp3 clones". It states that while allofmp3 "was shut down in 2007, sites
that are nearly identical, many of which appear to be owned by the same parties,
have taken its place. These websites appear to be designed to confuse consumers
by operating much like popular, legitimate sites".
The report also lists "deep linking" web sites, for which the infringing
works reside on third party servers. It names Sogou MP3 and Gougou in the
People's Republic of China (PRC).
It also names business to business and business to consumer web sites Taobao in the PRC and
Modchip.ca and Consolesource in Canada, which "sell circumvention devices and components
used to circumvent technological protection measures on game consoles".
The report also names several BitTorrent indexing web sites that are used for
locating and downloading of infringing works. It names ThePirateBay (Sweden),
IsoHunt (Canada), Btjunkie (Sweden and Netherlands), Kat.ph (Canada, Ukraine and
Romania), and torrentz.eu (Canada, Panama and Switzerland).
The report also names BitTorrent trackinging web sites, which can be used to
"transfer allegedly infringing material, by directing users to peers who share
the infringing content". It names Rutracker (Russia), Demonoid (Ukraine), and
This report also names the social media web site vKontakte (Russia), the
cyber lockers Megaupload (Netherlands and Hong Kong and Putlocker (United
Kingdom), the forum web site Warez-bb (Luxembourg, Switzerland and Sweden), and
the sports programming retransmission peer to peer service TV Ants (PRC).
Basis and History of Notorious Markets Reports. Section 301 is the
statutory means by which the U.S. asserts its international trade rights,
including its rights under World Trade
Organization (WTO) agreements. In particular, under the "Special 301"
provisions of the Trade Act of 1974, the OUSTR identifies trading partners that
deny adequate and effective protection of intellectual property or deny fair and
equitable market access to U.S. artists and industries that rely upon
intellectual property protection. See,
19 U.S.C. § 2242.
However, Section 2242 contains no reference to the identification of
notorious web sites, or notorious markets. Rather, it requires the OUSTR to
identify "foreign countries". The OUSTR must identify, for example, countries
that "deny adequate and effective protection of intellectual property rights, or
... deny fair and equitable market access to United States persons that rely
upon intellectual property protection".
Beginning in 2006, the OUSTR included sections on notorious markets in its
annual Special 301 reports. In 2010, the OUSTR announced that it would also
produce stand alone notorious markets reports. See, story titled "OUSTR
Announces Separate Notorious Markets Process" in
TLJ Daily E-Mail
Alert No. 2,138, October 4, 2010.
The OUSTR released its first notorious markets report in February of 2011.
Notorious Markets and SOPA. HR 3261, the
"Stop Online Piracy Act" or "SOPA", would give the
Property Enforcement Coordinator (IPEC) responsibility for writing a report
regarding notorious markets.
It provides, at Section 204, that the IPEC "shall identify and conduct an
analysis of notorious foreign infringers whose activities cause significant harm
to holders of intellectual property rights in the United States".
The SOPA would require the IPEC to include certain sections in its notorious
markets report that are not currently included in the OUSTR's notorious markets
For example, the IPEC report would include "An examination of whether
notorious foreign infringers have attempted to or succeeded in accessing capital
markets in the United States for funding or public offerings." The IPEC would
also be required to offer its recommendation as to whether there should be a
"list of notorious foreign infringers that would be prohibited from raising
capital in the United States."
Also, the SOPA would require that the IPEC report be written for the HJC and
Senate Judiciary Committee (SJC). The SOPA
could affect oversight jurisdiction.