Page 85 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes products. Thus, the task of policing intellectual property rights falls primarily to businesses,
which need to know their markets and the likely trouble spots for their products. Apple Computer,
for example, has been very successful at monitoring areas where it believes counterfeiting is
taking place, then using local police and other officials to seize products before they leave
production sites.

Government Responses to Counterfeit Goods

In recent years, the spotlight has shifted from individuals to governments in the struggle to
improve intellectual property protection. The US government, in particular, has become an
activist towards improving intellectual property protections internationally. It has used two
major vehicles to try to get other countries to change their policies: section 301 of the Trade Act
of 1974 and the GATT.

In 1988, a Congress frustrated with the lack of protection for US intellectual property rights
enacted two new provisions amending section 301 of the Trade Act of 1974. Section 301 is, in
general, a trade retaliation statute, requiring the United States to retaliate by imposing higher
tariffs or restrictions to the US market in some circumstances, and authorising retaliation in
others. The two 1988 amendments strengthened the authority of the US government to retaliate
for unfair trade practices and to negotiate to improve the protection of intellectual property.
One amendment, known as “Super 301”, requires the US trade representative to identify unfair
foreign trade practices having a major impact on the US economy and identify the countries in
which those practices take place. Once the priority practices and countries are identified, the US
trade representative must undertake negotiations to remove the unfair trade practices. If the
negotiations do not result in improvements, the United States must retaliate against the
designated country.
The second amendment, known as “Special 301,” specifically targets intellectual property practices.
It requires the US trade representative to identify the countries that deny Americans effective
protection of intellectual property rights or deny market access to US businesses that rely on
intellectual property law. As with a Super 301 designation, identification triggers section 301
investigations, which lead to retaliation.

Although many countries believe that the section 301 provisions violate the GATT, the sections
have had an impact on world trading practices. Japan, which was targeted under Super 301, has
liberalised its markets in several areas. In 1992, China agreed to improve its intellectual property
protections and to join the Berne Convention, just before a deadline set for retaliation under
Special 301.

Self Assessment

Fill in the blanks:

4. In the ......................., a business is able to select from among these forms: sole proprietorship,
partnership and corporation.
5. .............................. provide property rights to invention.

6. The second amendment, known as “.......................,” specifically targets intellectual property
practices.

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