The Office of the United States Trade Representative (USTR) has released its annual ”Special 301” Report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property rights (IPR). Aside from Italy being removed, the USTR also removed the Philippines, as noted in our story published on April 29th.

Some of the highlights from this year’s report are as follows:

• Growing concerns with respect to the environment for IPR protection and enforcement in India and other markets.

• Expressed ongoing, serious concerns about the protection and enforcement of trade secrets with respect to China, and emerging concerns in other markets.

• The removal of the Philippines and Italy from the Watch List in recognition of their IPR-related accomplishments, and as an indication of support for their commitment to continued progress.

• Music licensing and cable broadcasting concerns throughout the Caribbean that adversely affect U.S. copyright holders, including creators of original pay television programming, songwriters, and other independent artists.

• An announcement that the USTR will conduct Out-of-Cycle reviews to promote engagement and progress on IPR challenges identified in this year’s reviews of India, Kuwait, Paraguay and Spain.

One of the main reasons Italy has been removed is due to the new Online Copyright Enforcement for digital media that went into effect on March 31st. The Regulation, which doesn’t apply to alleged copyright infringements on P2P file-sharing sites, contains a detailed "notice and takedown" procedure. The Italian Media Authority, AGCOM, was granted the power to oversee and administer the new Regulation.

With respect to Italy, the USTR’s report states that, "The regulations provide notice and takedown procedures that incorporate due process safeguards and establish a mechanism for addressing large-scale piracy. The adoption and entry into force of these regulations is a significant achievement, resulting from intensive efforts over many years, which the United States strongly welcomes." The report also added that the U.S. looked forward to working with Italy on intellectual property protection but that implementation of the new regulations in Italy would be closely monitored.

Sky Italia, an Italian Pay-TV service provider, recently lodged an appeal over the extensive powers granted to AGCOM in the new copyright regulations. Sky considers those powers “anti-constitutional” and is the first service provider company to appeal against the current measures in place that allow AGCOM to block not only websites, but also TV programs that allegedly infringe copyright.

Prior to Sky’s appeal, Italian consumer associations Altroconsumo, Assoprovider and Assintel, had already taken action and lodged their appeals with the Regional Administrative Court of Lazio, calling for the cancellation of the new Regulation on the grounds that the procedure is unfair because it amounts to "an exercise in repression that fails to provide for any appeal to courts, as required by the Constitution."

While the U.S. will be closely monitoring Italy, we can’t help but wonder what might change if more appeals are lodged and AGCOM were to lose some of the powers they have been granted, or if the Regulation were to be amended in a manner that is not as strict as what is currently in place. The U.S. is basing its removal of Italy on the new Regulation.

It took Italy 25 years to come off the list.