2009 Special 301

February 3, 2009 Ms. Jennifer Choe Groves Director for Intellectual Property and Innovation and Chair of the Special 301 Committee Office of the United States Trade Representative 600 17th Street, NW Washington, DC 20508 Fax (202) 395-9458 Filed Electronically to Docket #USTR 2009-0001 RE:Comments to Special 310 Review Dear Ms. Groves: We appreciate the opportunity to submit comments on the enforcement and protection of intellectual property rights (IPR) by our trading partners in the World Trade Organization (WTO) as part of the United States Trade Representatives' (USTR) review under Section 182 of the Trade Act of 1974. These comments are submitted on behalf of the member companies represented by the American Apparel & Footwear Association (AAFA) – the national trade association for the apparel and footwear industries. AAFA represents many of the owners of the best known U.S. apparel and footwear brands and trademarks, which are seen and sold in markets throughout the world. The 2009 Customs and Border Protection seizure statistics for 2008 showed that footwear and apparel accounted for 38% and 9% respectively of the total value of counterfeit goods seized in the last year at our borders. Thus, strengthening our members' brand and intellectual property protections around the globe and ensuring the effective enforcement of IPR in foreign countries are essential to maintaining U.S. companies' world-wide competitiveness and the integrity of their brands. Based on recent comments by AAFA members, countries and practices cited as concerns include: China For the second year in a row, counterfeit products from China made up 81% of the total value of goods seized by U.S. Customs and Border Protection in 2008. Further, the total value of these seized items increased $63 million over 2007. Counterfeit footwear from China totaled almost 96% of all infringing footwear in 2008 with the domestic value increasing to more than $98 million from $76 million over FY 2007. Wearing apparel made up 9% of the total value of goods seized from China accounting for almost $21 million. IPR infringements in China run the gamut in the apparel and footwear industry with copyright and trademark infringement as two leading areas of concern. Counterfeit labels and packaging, manufacturing of counterfeit product, parallel trade, retail counterfeit trade, and diverted goods, as well as trademark squatting were all cited as problems in China. Many reforms are needed including administrative, criminal and civil justice reform, border control and customs training. Costa Rica Costa Rica's enforcement and prosecution of intellectual property rights continue to fall to the back burner. Over the last year, government officials failed to conduct any raids on counterfeit facilities and would not pursue other enforcements actions until a new legal regime over IPR was put in place. While the impact of the new law is not yet known, we hope that its codification will produce a more protective environment for our members' IP rights. Philippines The focus on enforcement is not equally distributed among industries in the Philippines. The country's own program was only focused on optical media and software, as markets selling counterfeit clothing and shoes, among other goods, thrive throughout the country. As a result, AAFA members often must initiate enforcement actions at their own expense Russia Unwillingness by Russian authorities to crackdown on intellectual property violations or protect existing rights continues to allow the producers and sellers of fake product to grow and compete with our members' legitimate goods. No significant raids have been conducted by the government, while a well known open air market in Moscow operates without interruption. Thailand Increased cooperation with local law enforcement has led to significant seizures of counterfeit goods in the last year. These actions have exposed other illegal operations in other par…