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handle is hein.crs/govegmm0001 and id is 1 raw text is: Con gressionaI Resear Ii Service saa a Informing qh eisl4 ative debae sin e 1914 0 Updated February 7, 2022 Intellectual Property Rights (IPR) and International Trade Protection and enforcement of intellectual property rights (IPR) are long-standing key components of U.S. trade policy. Congress has a constitutional responsibility to legislate on and oversee IPR matters in U.S. trade policy, which have evolved over time. The growing importance of emerging markets has introduced new views on IPR and challenges to enforcement. New technologies present distinct challenges to combating counterfeiting and piracy. Most recently, the Coronavirus Disease 2019 (COVID-19) pandemic is renewing debates about the role of IPR protections in providing global access to medicines. Background IP is defined as a creation of the mind embodied in physical and digital objects. Governments grant time-limited legal rights to creators to prevent others from making, copying, selling, or otherwise using their creations. Known as IPR, these rights can take different forms, such as patents, copyrights, trademarks, undisclosed data (trade secrets), and geographical indications (GIs). IPR generally aim to encourage innovation and creative output by allowing inventors to recoup expenses and benefit from their creations exclusively for a period of time and/or negotiating payment in return for others using them (e.g., royalties, licensing fees). IPR also aim to encourage broader benefits by allowing inventors, artists, and society at large to build on innovations after their IPR expire. IP and Economic Impact. IP is considered important to U.S. innovation, economic growth, and comparative advantage internationally. A range of U.S. industries rely on IPR protection. Yet, lawful limitations to IPR, such as fair use copyright exceptions for media, research, and teaching, can also further innovation and add value. Many traded goods and services are IP-based. Licensing and fees generated from the use of IP are part of services trade. Developed countries traditionally have been the primary source of IP, but emerging markets also are becoming major providers. Globally, by country, the United States is the largest exporter of IP, while the European Union (EU) bloc is the largest importer (see Figure 1). Historically, the United States has been the top filer of patents under the Patent Cooperation Treaty (PCT) system, administered by the World Intellectual Property Organization (WIPO). In 2019, China overtook the United States for the first time in international filings; China remained ahead of the United States in 2020, respectively, with 68,720 and 59,230 filings (total global filings of 275,900). Some analysts have questioned the quality of China's patent filings and whether its filing numbers accurately indicate innovation levels. IPR Infringement. Quantifying IPR infringement is difficult, given its illicit nature, although some estimates of trade in counterfeit and pirated goods are in the hundreds of billions of dollars per year worldwide. Innovation can be costly and time-consuming, but IPR infringement often may see relatively low risk of penalties and high profits. The digital environment heightens enforcement challenges. In FY2020, U.S. Customs and Border Protection (CBP) reported making 26,503 seizures of IPR-infringing goods valued at $1.3 billion, with China as the largest source. Figure I. IPR Trade for Selected Countries, 2020 Eilion of U.S. Dollars E5159. States 54. Japan $27.7 c Receipts (Exports) Switzerland 18.0 Payments (Imports) Source: WTO, 2020 data in World Trade Statistical Review 2021. Note: Charges for the use of IP include the use of proprietary rights and for licenses to reproduce or distribute IP; licensee payments can take various forms, such as royalties and fees. EU = Extra-EU trade. U.S. Trading Partners' IPR Protection. While many U.S. trading partners have strengthened IPR laws and enforcement, some aspects of their regimes continue to pose trade and investment barriers for U.S. firms. The Office of the U.S. Trade Representative (USTR) has cited as among key concerns lax border and criminal enforcement against counterfeits, including in the digital environment; high levels of digital piracy, including cyber theft of trade secrets; and gaps in trade secret protection and enforcement. China and India, for instance, present significant challenges in their forced technology transfer and other industrial policies, which may disadvantage U.S. IP holders in these markets. Among developed economies, the European Union (EU) approach to GIs, for example, may limit market access for U.S. exporters of products that are common food names. Trade Policy Tools for IPR The use of trade policy to advance IPR internationally emerged prominently with the 1994 North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). As IPR took on a greater role in trade, differences in countries' IPR regimes led to frictions in global commerce. The establishment of common rules on IPR in the international trading system aimed to bring more certainty and to address IPR-related disputes more systematically. Multilateral IP Rules. The TRIPS Agreement established minimum standards of protection that most WTO members

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