The next trade protection report should tell the US to defend intellectual property
On Feb. 19, the Office of the United States Trade Representative held hearings on the challenges that America’s innovative industries face in protecting their intellectual property rights abroad.
The hearings were part of a review published as an annual document called the Special 301 Report. The report has some teeth.
It names and shames countries that don’t fully protect American intellectual property, or afford market access to goods and services that rely on it. The report also provides for audits of recalcitrant trade partners to encourage them to make timely and measurable progress.
The Biden administration’s Special 301 reports, however, did not fulfill these statutory requirements. The 2023 report turned a blind eye to some of the most egregious violations of U.S. patents. The 2024 report practically encouraged them.
Biden gutted these reports to pander to the far left of his party, which erroneously believes that intellectual property only benefits a few corporations.
The 2025 report needs to show things will be different. To this end, it should call out countries that are tilting the scales on intellectual property rules, such as by abusing compulsory licenses or implementing unfair patenting restrictions.
Trump’s America First Trade Policy memo calls for a study to identify “any unfair trade practices by other countries and recommend appropriate actions to remedy such practices.” The 2025 report must do exactly that on intellectual property.
Intellectual property drives the American economy. It directly or indirectly accounts for 63 million high-paying jobs and 41 percent of U.S. GDP. The fact that these statistics were in the 2023 report, but not included in the 2024 report, shows the depth of Biden’s retreat on intellectual property.
The need for a course correction in the 2025 report is obvious. For starters, consider the case of compulsory licenses.
Under Trump 1.0, Special 301 reports in 2018, 2019 and 2020 warned that they should not be considered “as a tool to implement industrial policy ... or as undue leverage in pricing negotiations.” The 2023 report dropped this language. The 2024 report didn’t even talk about compulsory licenses.
This was hard to square with the facts. Stakeholders had warned that Malaysia used compulsory licenses to promote its medical tourism. Likewise, Indonesia employed one, even though the rights holder had entered into a voluntary license with a generic manufacturer to supply Indonesia’s market.
In a press statement announcing the 2024 report, Trade Representative Katherine Tai explained the deafening silence on these and other cases. The Biden administration would continue “its policy of declining to call out countries exercising flexibilities of the Trade-Related Aspects of Intellectual Property Rights Agreement, including with respect to compulsory licenses.”
In light of this, it was not surprising that Colombia issued its first compulsory license immediately after the 2024 report, or that the European Union rushed to finalize legislation to consolidate compulsory license authority on dubious grounds.
Under Trump 2.0, USTR needs to finish what it started in 2018 and target all abuses of compulsory licenses.
Then there’s the restrictive patentability criteria. Under the rules of the World Trade Organization and U.S. free trade agreements, countries are supposed to patent novel ideas on a nondiscriminatory basis, including with respect to the field of technology.
However, too many countries have intellectual property regimes that tolerate the theft of U.S. ideas to benefit their domestic industries. As with compulsory licenses, these regimes serve industrial policy goals through policies that are tantamount to forced technology transfer.
In the 2020 report, for example, U.S. Trade Representative raised specific concerns about patentability criteria in Argentina, India and Indonesia. It said India “continues to apply restrictive patentability over questionable patentability criteria to reject pharmaceutical patents” and hadn’t “established an effective system for protecting against unfair commercial use,” including the unauthorized use of test data submitted for marketing approval.
In the 2024 report, these concerns were scrubbed, even though nothing had changed.
The 2025 report should do what the 1988 Trade Act requires of it: call out and correct for abuses of American intellectual property.
Then there’s the out-of-cycle reviews. These are repeat audits that put trade partners on notice, raising the prospect of enforcement actions. Under Trump 1.0, out-of-cycle reviews were used almost 10 times, including to encourage compliance with US trade agreements. The Biden administration virtually retired the tool.
The 2025 report must clearly signal that the U.S. takes intellectual property seriously again. This is essential in the run-up to the July 2026 joint review of the US-Mexico-Canada Agreement. Future reviews of all other U.S. trade agreements, as called for in Trump’s America First Trade Policy memo, will benefit immeasurably from this information too.
Intellectual property, not tariffs, is the future of U.S. manufacturing. It’s also why America’s exports of services are in such high demand around the world. That’s the message the 2025 Special 301 report must convey for the first time in years, with a promise to back these words with deeds.
Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University.
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