US names Ukraine worst abuser of intellectual property rights

The U.S. Trade Representative's office in its annual 2013 Special 301 Report named Ukraine a "Priority Foreign Country (PFC)," the USTR's rarely used, bottom-tier judgment of how countries around the world are protecting US patents, copyrights and other forms of intellectual property rights (IPR), BBC Ukraine reported on Wednesday.

"This designation is the culmination of several years of growing concern over widespread IP theft, including the growing entrenchment of IPR infringement that is facilitated by government actors," say the authors of the report.

The report says that during intensive bilateral engagement, Ukraine has made a series of commitments to make specific improvements in the areas of government use of pirated software, nontransparent administration of royalty collecting societies, and online piracy. Unfortunately, the situation has continued to deteriorate on each of the issues.

"I regret that the government of Ukraine has earned the first new Priority Foreign Country designation in 11 years due to its severely deteriorating climate for IPR protection and market access, and call upon that government to reverse recent backsliding and swiftly resolve the problems identified today," said acting US Trade Representative Demetrios Marantis in a statement.

The authors of the report say that the most recent industry data identify Ukraine as having a higher software piracy rate than almost all other countries on the Priority Watch List.

"The government of Ukraine acknowledges that a significant percentage of the software used by the government itself is unlicensed," reads the report.

The authors of the report say that currently there are no authorized collecting societies for producers’ or performers’ rights in Ukraine.

"The current system of collecting societies in Ukraine institutionalizes misappropriation of royalties," reads the report.

"Online piracy now has significant and growing consequences for both the Ukrainian market and for international trade. For example, ExtraTorrent.com, which is based in Ukraine, professes to be “The World's Largest BitTorrent System," reads the report.