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1 1 (January 17, 2025)

handle is hein.crs/govesdl0001 and id is 1 raw text is: Con res&on I Fesedrch Service infor ing I legi I ive d A ate ii e 1914 0 Updated January 17, 2025 Intellectual Property Rights (IPR) and U.S. Trade Policy Intellectual property rights (IPR) protection and enforcement are key components of U.S. trade policy, and the United States plays a leading role in global IPR trade (Figure 1). Congress has a constitutional responsibility to legislate and oversee IPR matters in U.S. trade policy. Since 1988, Congress has included IPR protection as a principal objective in trade promotion authority (TPA) for U.S. free trade agreement (FTA) negotiations (P.L. 100-418). Debates over how to protect IPR while incentivizing innovation and advancing other policy aims, such as ensuring access to medicines and technologies based on IPR, have grown with the incorporation of IPR in U.S. trade policy. Several issues have complicated these debates, including the growing role of China and other emerging markets in the global economy, the proliferation of new technologies and digital trade, and impacts of pandemics, like COVID-19, on global medical supply chains. Figure I. Trade in Charges for IPR Use: Selected Countries, 2023 Source: WTO, World Trade Statistics 2023, Table 42. Figure, CRS. Notes: Preliminary estimates for 2023. Charges for IP use include use of proprietary rights and licenses to reproduce or distribute IP; licensee payments include royalties and fees. EU = Extra-EU trade. Background IPR are legal rights governments grant entities to prevent others from making, copying, selling, or otherwise using their creations, typically for a limited time. IPR include patents, copyrights, trademarks, undisclosed data (trade secrets), and geographical indications (GIs, i.e., names of products tied to a geographic place). IPR holders may recoup associated expenses (e.g., research and development) by benefiting exclusively from their creations for some time and negotiating payment for others' use of the intellectual property (IP) (e.g., royalties). After the IPR expire, others can use and build on the innovations. The exclusivity granted to IPR holders may raise prices or limit access to protected goods. Some Members of Congress and stakeholders assert that IPR foster innovation and creative output. Others debate the validity of these arguments. IP and Economic Impact. The U.S. government and some domestic companies generally assess IP to be important for advancing U.S. innovation and economic growth, while protecting U.S. comparative advantage internationally. Limitations to IPR are also applied (e.g., fair use copyright exceptions for media, research, and teaching) to support innovation and add value. Per a U.S. Patent and Trademark Office report, industries assessed to rely most heavily on IP comprised an estimated 41% of U.S. gross domestic product (GDP) and 44% of U.S. jobs (directly and via supply chains) in 2019 (latest data available). IP licensing and use fees comprised 13% of U.S. services exports and 6% of U.S. services imports in 2023, based on U.S. Bureau of Economic Analysis data. IPR Infringement. Growth in digital trade and use of complex supply chains heighten IPR infringement risks and enforcement challenges. In the early years of the COVID- 19 pandemic, for example, trade in counterfeit COVID-19 test kits, medicines, and other products posed enforcement and business challenges. Given its illicit nature, IPR infringement can be difficult to quantify. Global trade in counterfeit and pirated goods reached an estimated $464 billion, or 2.5% of global trade in 2019 (latest data available). U.S. trade law prohibits the import of IPR- infringing goods. In FY2023, U.S. Customs and Border Protection (CBP) reported seizing $2.8 billion worth of IPR-infringing goods at U.S. borders, most of which were low-value shipments exempted from duties under Section 321 of the Tariff Act of 1930 (i.e., de minimis). China was the largest source of seizures by quantity and value, followed by Hong Kong and India. U.S. Trading Partners' IPR Regimes. While some U.S. trading partners have strengthened IPR laws and enforcement, 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 highlighted concerns raised by stakeholders about some trading partners' lax border and criminal enforcement against counterfeits, including in the digital environment; high levels of digital piracy; and gaps in trade secret protection and enforcement. Examples are stakeholder concerns that China's technology transfer and other industrial policies may disadvantage U.S. IP holders in these markets; and the EU's approach to GIs may limit market access for U.S. exporters of products that use terms treated in other markets as common names. Some issues are evolving. For instance, stakeholders continue to debate the impact of EU regulation of the digital economy and artificial intelligence (AI) on U.S. IP and innovation (e.g., copyright implications of data used for Al model training). Trade Poicy Tools for PR The use of trade policy to advance IPR internationally emerged prominently with the former 1994 North American Free Trade Agreement (NAFTA) and World Trade

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