United States Trade Representative Robert Lighthizer has announced the findings of the 2017 Special 301 Out-of-Cycle Review of Notorious Markets, also known as the Notorious Markets List. The list highlights 25 online markets and 18 physical markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting.

This activity harms the American economy by undermining the innovation and intellectual property rights (IPR) of US owners of IPR in foreign markets.  Imports in counterfeit and pirated physical products is estimated at nearly half a trillion dollars, or around 2.5 percent of global imports.

“Marketplaces worldwide that contribute to illicit trade cause severe harm to the American economy, innovation, and workers,” said Lighthizer.

The 2017 Notorious Markets List maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the report highlights illicit streaming devices as an emerging piracy model of growing concern. The report also calls on several ecommerce platforms to improve takedown procedures, proactive measures, and cooperation with right holders—particularly small and medium-sized businesses—to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.

Over the past year, some market owners and operators have made efforts to address the widespread availability of pirated or counterfeit goods in their markets.  Some governments also continue to institute novel strategies to combat piracy and counterfeiting. These strategies include: voluntary initiatives with advertising networks to cut off financial support for websites devoted to copyright infringement; installing intellectual property enforcement centers on-location in high-priority physical markets; and using skills training to reorient former counterfeit sellers towards operating legitimate businesses. The USTR also monitors marketplaces with a record of piracy and counterfeit goods.

Taobao, China’s largest ecommerce marketplace and its third-most popular website, is on the USTR’s list. The marketplace, owned by China’s ecommerce giant Alibaba, managed to stay off the list from 2012 to 2015, but was included in 2016 and now again in 2017.

“A high volume of infringing products reportedly continue to be offered for sale and sold on Taobao.com and stakeholders continue to report challenges and burdens associated with IP enforcement on the platform,” the USTR report said.

The development is a blow to Alibaba’s efforts to reverse perceptions that its sites sell fake goods and that its anti-piracy policies are inadequate.

USTR first identified notorious markets in the Special 301 Report in 2006.  Since February 2011, USTR has published annually the Notorious Markets List separately from the Special 301 Report, pursuant to an “Out-of-Cycle Review of Notorious Markets,” to increase public awareness and help market operators and governments prioritize IPR enforcement efforts that protect American businesses and their workers.

The Out-of-Cycle Review of Notorious Markets identifies particularly notable online and physical markets that facilitate unfair competition with US products. The report does not constitute an exhaustive list of all markets reported to deal in pirated or counterfeit goods around the world, nor does it reflect findings of legal violations or the US Government’s analysis of the general IPR protection and enforcement climate in the country concerned. Such analysis is contained in the annual Special 301 Report issued at the end of April each year.

This concludes the 2017 Out-of-Cycle Review of Notorious Markets, which USTR initiated on August 16, 2017, through publication in the Federal Register of a request for public comments.  The US government agencies represented on the USTR-chaired Special 301 Subcommittee of the Trade Policy Staff Committee (TPSC) developed the Notorious Markets List based primarily on information received in response to the Federal Register request.