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Memorandum on Determination Under Section 301 of the Trade Act of 1974

August 14, 1986

Memorandum for the United States Trade Representative

To our mutual benefit, the governments of the United States and the Republic of Korea (Korea) have reached an agreement resolving the investigation initiated under Section 302(c) of the Trade Act of 1974, as amended (19 U.S.C. 2412(c)), of Korea's previously ineffective protection of intellectual property rights. The sustained, cooperative efforts of both our Governments and the successful outcome of these efforts demonstrate how we can work together constructively to achieve a more open world trading system. Therefore, pursuant to Section 301 of the Trade Act, I have determined to accept the agreement described below as an appropriate and feasible action to resolve this investigation and therefore to terminate the investigation. I direct the United States Trade Representative (USTR) to notify the government of Korea of my approval of the agreement and to take any actions necessary to implement and monitor it.

Reasons for Determination

On November 4, 1985, in response to my request, the USTR initiated an investigation into the adequacy of Korean laws governing the protection of intellectual property rights. Korean laws deny patent protection for pharmaceutical and agricultural chemical products and do not provide copyright protection for computer software and audio recordings. Under Korean trademark law, Korean firms have been permitted to register trademarks similar or even identical to foreign trademarks that are not "well known" in Korea. Moreover, there has been a lack of effective enforcement of existing laws pertaining to copyright protection for literary works. Pursuant to Section 301 of the Trade Act of 1974, as amended, I have determined that the prior policy of Korea of denying effective protection to intellectual property rights was unreasonable and a burden or restriction on U.S. commerce.

Representatives of the Government of Korea and the United States intensively negotiated concerning amendments to existing Korean laws and improved enforcement by the Government of Korea of existing laws. As a result of these negotiations, we reached an agreement regarding actions the Korean Government will take to improve dramatically Korea's protection of copyright, patent, and trademark rights. Korea has agreed to take the following actions:

— introduce for enactment by July 1, 1987, comprehensive copyright laws explicitly covering computer software;

— accede to the Universal Copyright convention and Geneva Phonograms Convention by October 1987;

— introduce amendments to its patent law to extend product patent protection for chemicals and pharmaceuticals and for new uses of these products;

— adhere to the Budapest Treaty and extend patent protection to new microorganisms; and

— remove requirements for technology inducement and exportation previously applied to trademarked goods and to remove restrictions on royalty terms in trademark licenses.

Korea and the United States have also agreed to establish a consultative mechanism to discuss matters relating to implementation of this agreement and other issues related to protection of intellectual property.

This agreement represents a major achievement in our efforts to obtain effective intellectual property protection for American industries. Thus, this agreement will encourage freer trade with the Republic of Korea and remove trade distortions.

This determination shall be published in the Federal Register.



Washington, August 14, 1986.

Ronald Reagan, Memorandum on Determination Under Section 301 of the Trade Act of 1974 Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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