Publications
European IP Bulletin, Issue 25, September - IP Rights
IP Rights
2. US Removes Ukraine Trade Sanctions in Recognition of Improvements Made to Protect Intellectual Property Rights
On August 31 2005, the US Trade Representative announced that the United States had lifted 100% tariff sanctions which since 2002 were imposed on US$75 million worth of exports from the Ukraine. This action was in response to the Ukraine’s approval of a package of amendments to the Laser-Readable Disk Law in July 2005, which improved its licensing regime in order to prevent the manufacturing of pirate CDs and other optical media.
The approval by the Ukrainian Rada (Parliament) of the new Laser-Readable Disk Law, which went into force on 2 August 2005, demonstrates progress in the area of intellectual property rights protection. The new legislative framework brings about important innovations concerning both the criminal code and the Law of Ukraine “On Specifics of the State Regulation of the Activity of Subjects of Economic Activity Associated with the Production, Export and Import of Laser-Readable Discs”.
In 2000, the United States indicated that it was deeply concerned with the production of pirated media, which had been taking place in the Ukraine and its export to Eastern, Central and Western Europe. In response, the United States attempted to stem the illegal production and trade of CDs and DVDs by signing a bilateral agreement with the Ukraine in June 2000. According to this agreement, Ukraine was responsible for setting up plant monitoring procedures to crack down on piracy and enacting a satisfactory optical disk law by November 2000.
The Ukraine failed to meet its bilateral obligations under the agreement and, in March 2001, it was designed as a Priority Foreign Country in the Special 301 process. In August 2001, the US Trade Representative took action by withdrawing benefits from the Ukraine under the Generalised System of Preference. Moreover, on 23 January 2002, the US imposed US$75 million worth of sanctions on Ukrainian export to the United States, which was the estimated amount of annual damages caused to US businesses due to the illegal trade of pirated optical media.
The recent approval of changes to the Ukrainian Laser-Readable Disk law and other WTO-related legislation, and the lifting of sanctions should lead to the progressive reestablishment of normal trade relations between the US and the Ukraine. The USTR has also announced that it is conducting a Special 301 Out-of-Cycle-Review, and depending on Ukraine’s IPRs enforcement, the US may reconsider its Priority Foreign Country status and General System of Preferences benefits eligibility.
With regard to the Ukraine’s imminent accession to the WTO, President Victor Yuschenko’s willingness to pass a set of IP-related regulations, developed by the United States, in cooperation with industry officials and the Ukraine Government, demonstrates that compliance with bilateral WTO accession agreements is a priority, as much as compliance with the standards of TRIPs.
3. Ghost of Rover Haunted By Intellectual Property Disputes
Chinese firm Shanghai Automotive Industry Corporation (SAIC), one of the losing rivals in the tussle to buy MG Rover, is not backing down quietly. In addition to its complaints regarding the ''discriminatory and unfair'' bidding process, SAIC has threatened the successful bidder, Nanjing Automotive, with a long court battle over intellectual property rights (IPR).
During its previous attempts to take over the Rover car maker, SAIC spent £67million buying the IPRs in relation to the Rover 25 and Rover 75 car models, along with IPRs relating to a series of engines that power all the new Rovers and MGs.
The key issue is that most of the cars produced under the MG mark in recent years are apparently Rover models with different branding and modified specifications. Therefore, while Nanjing's deal with PricewaterhouseCoopers (PWC) (the administrators to MG Rover) has seen it take control of MG car production, SAIC continues to own the rights to two of the three equivalent Rover models.
SAIC argues that Nanjing cannot produce any cars without its permission because it has already acquired the IPRs from Rover. However, PWC and Nanjing believe that SAIC holds little significant IPR. Nanjing say that they have the rights to produce the MG variants of Rover’s saloons, while PWC believe that SAIC’s threat is a ploy to frighten off buyers so that it can buy equipment at knockdown prices.
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