Israel Removed from Special 301 Watch List

pirate food pyramid

Oh, better far to live and die
Under the brave black flag I fly,
Than play a sanctimonious part,
With a pirate head and a pirate heart.
Away to the cheating world go you,
Where pirates all are well-to-do;
But I’ll be true to the song I sing,
And live and die a Pirate King.

Pirates of Penzance Gilbert & Sullivan

At the end of January 2014, the Office of the United States Trade Representative removed Israel from the intellectual property watch list of the Special 301 Report. This formally means that the United States, who are, of course, totally objective leaders of the free world, no longer consider Israel to be a haven for pirates.

TEVA is the largest company traded on the Tel Aviv Stock Exchange, and is the world’s biggest manufacturer of generic drugs. Israel has appeared in the watch list since 2005 since its patent laws did not conform to the standards that the US demanded, particularly in the field of generic drugs. Inclusion on the Watch List of the Special 301 Report subjects countries to increased scrutiny on relevant trade issues, and even possibly to sanctions.

Unlike WIPO that reflects international IP agreements reached by the countries of the UN, or even TRIPS which reflects an international regime pushed through by the US under the World Trade Organization in an attempt to bypass WIPO, The Special 301 Report simply reflects narrow US interests and does not reflect international standards accepted by the world, the free world, the Western world or advanced economies. It represents the US trade interests.

Israel recently amended its Patent Law to US satisfaction. See here. Not overly surprisingly, various Israel Ministers are on record as stating that this kowtowing to US financial bullying is a positive development. Economy Minister Naftali Bennett’s spin is that the decision is an “important vote of confidence by the US”. He believes that the move will help Israel advance its industry and innovation, not just in the US but around the world. Justice Minister Tzipi Livni has vowed to continue strengthening Israeli intellectual property rights. “This is a significant achievement, which reflects great efforts for advancing the international status and position of Israel as a leading country in intellectual property,” she said.

This development is the culmination of negotiations between the US and Israel from 2008 onwards. See 2009 article and 2010 article for the history. Beyond the hype, we suspect that this development does not particularly help TEVA and may account for recent job losses and talk of the company moving more activities abroad.

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