By BERNIE CAHILES-MAGKILAT The US Trade Representative (USTR) has called out the Philippines as one of the sources of counterfeit drugs and for its continued use of unlicensed software by government agencies. Despite having been called out for infringements on intellectual rights protection on these two fronts, the Philippines has remained outside the USTR’s Special 301 Watch List for the seventh consecutive year or since 2014. The annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Counterfeiting and Piracy, which came out yesterday, highlights online and physical markets that reportedly engage in and facilitate substantial trademark counterfeiting and copyright piracy. On counterfeit pharmaceuticals, the report cited a recent Organization for Economic Cooperation and Development study, which found that China, India, the Philippines, Vietnam, Indonesia, and Pakistan as the “leading sources of counterfeit medicines distributed globally.” “The manufacture and distribution of pharmaceutical products and active pharmaceutical ingredients bearing counterfeit trademarks is a growing problem that has important consequences for consumer health and safety and is exacerbated by the rapid growth of illegitimate online sales. Counterfeiting contributes to the proliferation of substandard, unsafe medicines that do not conform to established quality standards,” the USTR report said. The United States noted its particular concern with the proliferation of counterfeit pharmaceuticals that are manufactured, sold, and distributed in numerous trading partners. US brands are the most popular targets for counterfeiters, and counterfeited US-brand medicines account for 38% of global counterfeit medicine seizures. On software, the report said the Philippines is among trad¬ing partners where government agencies still use illegal software along with Argentina, Brazil, China, Egypt, Greece, Guatemala, Indonesia, Kenya, Mexico, Nigeria, Paraguay, the Philippines, Romania, Russia, Thailand, Turkey, Ukraine, and Vietnam. “The United States urges trading partners to adopt and implement effective and transparent procedures to ensure legitimate governmental use of software,” the report noted. “It is important for governments to legitimize their own activities in order to set an example of respecting IP for private enterprises. Additionally, unlicensed software exposes governments and enterprises to higher risks of security vulnerabilities,” the report stated. The USTR cited a report by the Software Alliance, which showed that the commercial value of unlicensed software globally was at least $46 billion in 2018. Responding to the USTR’s findings on the Philippines, the Intellectual Property Office of the Philippines (IPOPHL) Deputy Director General Teodoro Pascua said they have set mechanisms for relief to address grievance on any IPR violation and the government is making efforts to improve enforcement. However, Pascua stressed that the counterfeit medicines could not have originated from the Philippines but as a transshipment port. As to software issues, Pascua said the government has strict mechanisms to forestall use of counterfeit software but IPOPHL and the National Committee on IPR are heightening efforts to contain likely violations on IPs in software. Overall, Pascua complemented both IPOPHL and NCIPR for having maintained the country’s status away from the Watch list by continuing and heightening efforts versus piracy and counterfeiting for the past 7 years.