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The U.S. economy lost $9.2 billion through copyright breaches in foreign countries in 2002, the industry body International Intellectual Property Alliance reported Thursday.

The report was released the day before IIPA presents its anti-piracy recommendations for 2003, known as "Special 301", to U.S. Trade Representative Robert Zoellick.

The IIPA is an umbrella group comprising several industry associations in the media and software field such as the Business Software Alliance, the Recording Industry Association of America, the Motion Picture Association of America, and the Interactive Digital Software Association.

Copyright breaches include illegally copied optical disc products for audio, music, and software, and piracy carried out through the Internet of entertainment and software products.

The U.S State Department defines Special 301 as the part of U.S. trade law that requires the U.S. Trade Representative to identify countries that deny adequate protection for intellectual property rights (IPR) or that deny fair and equitable market access for U.S. entities which rely on IPR.

On Alert

In its most recent review, IIPA discussed IPR breaches in 63 countries, of which 56 were placed on some level of alert to be monitored.

IIPA singled out the Ukraine for its most stringent restrictions. The country is under U.S. trade sanctions and IIPA recommended in its report that these continue until Ukraine passes appropriate IPR legislation.

Also in the firing line is China, which IIPA recommended be monitored for compliance with its bilateral commitments with the U.S. on copyright enforcement. Failure by China to demonstrate compliance could result in almost immediate trade sanctions under Section 306 of the Trade Act, IIPA said.

Keeping Watch

At a lower level of severity is the priority watch list. Already containing Argentina, Brazil, Dominican Republic, Egypt, India, Indonesia, Lebanon, Philippines, Russia, and Taiwan, IIPA has recommended that the Bahamas, Bolivia, Kuwait, Lithuania, Pakistan, Poland, South Africa, South Korea, and Thailand be added to this category.

IIPA placed a further 33 countries on a standard watch list, while seven other countries were described as deserving further attention, but were not placed on a formal list.

The relative level and the absolute amount of piracy are not the only criteria used by IIPA to gauge the level at which it grades individual countries.

Thus Brazil, with overall piracy rates of around 50 percent, is on IIPA's priority watch list, while Peru, where records and music software piracy is estimated at 98 percent, remains on the ordinary watch list. Vietnam, where software piracy is estimated by the BSA to reach 99 percent and where music and video piracy is also rife, is not included on any IIPA list.

According to IIPA, absolute piracy losses are greatest in China, reaching $1.85 billion in 2002. IIPA estimated motion picture piracy in China at 91 percent, records and music piracy at 90 percent, business software piracy at 93 percent, and entertainment software piracy at 96 percent.

The full report can be found online.

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