The Philippines successfully avoided the United States’ (US) list of intellectual property violators for a 13th consecutive year, maintaining its status as a regional leader in enforcement despite a surge in counterfeit pharmaceuticals and bureaucratic delays in trademark litigation.

In this year’s Special 301 Report, the Office of the United States Trade Representative (USTR) identified the country as having some of the best practices in enforcing and protecting IP rights.

The USTR said the launch of an E-Commerce Bureau under the Department of Trade and Industry (DTI) in March 2024 demonstrated the country’s strong regulatory oversight of e-commerce transactions, including protection against the sale of counterfeit goods online.

The international agency said such specialized IP enforcement units have proven to be important catalysts in the global fight against counterfeiting and piracy.

The government’s awareness and educational campaigns were also cited for helping build support for IP protection efforts, such as through the “Pirated Inferno” comic by the Intellectual Property Office of the Philippines (IPOPHL).

Another best practice was the IPOPHL’s National Judicial Colloquium on Intellectual Property Adjudication, which included the participation of judges from special commercial courts.

Amid these positive developments, the USTR said the Philippines continues to face issues with counterfeit goods, particularly pharmaceutical products and active pharmaceutical ingredients.

Citing a 2020 study by the Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO), the USTR said the Philippines, China, India, Indonesia, Pakistan, and Vietnam are among the leading sources of counterfeit medicines distributed globally.

The agency said this poses a growing threat to consumer health and safety, especially as these products are now being distributed more rapidly through online sales.

In addition, the Philippines, alongside India, Malaysia, and Pakistan, was flagged by the USTR for slow opposition or cancellation proceedings in trademark protection cases.

The USTR conducts the annual Special 301 Report to identify the US’ trading partners that fail to provide adequate and effective protection of IP rights

In this year’s report, Vietnam was identified as a Priority Foreign Country (PFC), becoming the first country to be placed in this category in 13 years.

A PFC refers to a country that has demonstrated a persistent failure to resolve long-standing concerns about IP protection and enforcement and is considered to have the most adverse impact on US products.

As a result, the USTR may initiate an investigation under Section 301 of the Trade Act of 1974 as the basis for Vietnam’s designation as a PFC. Under this law, the USTR is authorized to impose tariffs or other import restrictions, among other measures, to address the issue.

Countries on the USTR’s Priority Watch List include China, Chile, India, Indonesia, Russia, and Venezuela.

“USTR will seek to engage intensively with these countries, as appropriate, during the coming year,” the report read.