As was widely expected, the US has kept Taiwan on its list of the world's worst centers of intellectual property piracy, despite new laws and other efforts by the Taiwanese government to curb the illegal practice.
The designation means that the commercial theft of software, videos, optical discs, music and other electronic items in Taiwan will remain a major source of friction between Taipei and Washington for at least another year.
"The lax protection of IPR [international property rights] in Taiwan remains very serious," an annual report from the US Trade Representative (USTR) office said.
"US companies report significant problems in being able to protect and enforce their intellectual property rights. Taiwan is one of the largest sources of pirated optical media products in the world. Its copyright lass need strengthening in a number of areas to deal with growing piracy. Corporate end-user piracy remains at a high level. Taiwan also suffers from trademark counterfeiting, including that of pharmaceuticals," the report says.
As a result, Taiwan will remain on the so-called "Priority Watch List" under the US' Special 301 trade law, along with Russia, the EU and 12 other countries.
That designation could lead to eventual US trade sanctions against Taiwan if the situation deteriorates sufficiently.
Despite the negative report, the trade office had praise for some actions that Taiwan has taken against piracy -- and for its efforts to enforce new laws.
"The United States remains encouraged by the passage of these laws and the important first steps that have been taken in terms of implementation," the USTR says.
The new laws include amend-ments to Taiwan's patent and copyright laws and new legislation to license the production of optical media.
However, the report says Washington was "disappointed" that the optical media law was "weakened before passage."
It called optical disk piracy an "increasing problem."
The report also notes favorably that Taiwan has ordered government agencies to use only authorized software and has lengthened patent protection from 15 years to 20 years for patents received after January 1994, as part of its entry into the WTO.
Early last month, the US trade agency estimated that Taiwan's poor IPR performance had cost American companies US$333 million last year. It said the situation is of "major concern" to Washington.
The US put Taiwan on its Priority Watch List in April last year, an even more notorious position than being on the Watch List, where Taiwan had been listed for some years.
The latest report does not say that Taiwan will be subject to an interim review of its status during the coming year, indicating it will remain on the high-priority list until next April.
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