to evade law enforcement efforts. Moreover, the United States is discouraged by the lack of initiative by the Customs Authorities to implement vigorous border enforcement measures, as agreed to in the MOU. The U.S. Government intends to hold consultations with Paraguay in the coming year to discuss plans for improving implementation of the MOU. The U.S. Government will use these meetings to formulate our positions on the future of the MOU, which comes up for renewal in January 2003.
PRIORITY WATCH LIST
ARGENTINA
Although Argentina has made incremental progress in improving its intellectual property rights (IPR) regime, such as by enacting some measure of patent protection, much work still remains to be done. Significant barriers to the effective enforcement of intellectual property rights remain, including weak and inconsistently applied penalties for IPR violations. Pirated copies of copyrighted material and counterfeit brand-name goods are widely available. Illegal decoding, distribution, and resale of satellite signals continue unabated. The use of unlicensed software remains widespread in businesses and in some government entities. Industry estimates that copyright piracy resulted in losses of $256 million in 2001. The process of private civil enforcement against copyright infringement has improved, but criminal charges and convictions are rarely sought or obtained. Although there has been an increase in police raids and other enforcement actions, these actions usually do not result in prosecutions or in deterrent sentences if prosecution occurs.
Argentine pharmaceutical firms continue to produce and export unlicensed copies of patented products. Industry estimates that the lack of adequate patent protection results in annual losses of $750 million. In 1999, the U.S. initiated a WTO dispute settlement case against Argentina on exclusive marketing rights and confidential test data protection. The U.S. initiated a subsequent WTO case in 2000, which involved a number of other patent issues. Earlier this month, however, a partial settlement was reached on a number of these issues. In this settlement, Argentina agreed to clarify how certain aspects of its IPR system operate in a manner consistent with their TRIPS Agreement obligations. In addition, Argentina agreed to amend portions of its patent law that were inconsistent with TRIPS. Two important issues, including data protection, remain unresolved.
BRAZIL
Brazil is both one of the largest markets globally for legitimate copyrighted products, and one of the world's largest pirate markets. Losses suffered by the U.S. copyright industry are the largest in the hemisphere, with industry estimates exceeding $700 million in the past year. Piracy-driven losses suffered by the Brazilian music industry are particularly staggering. Despite having adopted modern copyright legislation that appears largely to be consistent with TRIPS, Brazil has taken no serious enforcement actions against increasing rates of piracy.
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