The Office of the United States Trade Representative released its 2023 Special 301 Report on April 26. This much-anticipated document surveyed whether U.S. trade partners give “adequate and effective” protection to America’s intellectual property. Regrettably, the report goes silent on some of the most egregious IP abuses that U.S. businesses face in foreign markets at a time when U.S. leadership on the issue is most needed.

In 2022, World Trade Organization members agreed to the so-called “TRIPS waiver” for COVID vaccines. That waiver suspends some patent obligations set out in the Trade-Related Aspects of Intellectual Property Rights Agreement based on the misguided notion that intellectual property rights were an impediment to vaccine access.

The TRIPS waiver works by making it easier for developing countries to use “compulsory licenses” (CLs), which involve a government forcing a patent owner to share its idea with a domestic generic producer for a royalty fee. The WTO already permits CLs, but the waiver relaxes several steps and removes important measures that ensure CLs are not leveraged inappropriately (e.g., re-exported or diverted to more lucrative markets).

Moreover, WTO members will consider expanding the waiver to include COVID-related diagnostics and therapeutics this fall. Many of America’s innovative industries oppose this. They also fear the waiver has seriously compromised the U.S. Trade Representative’s approach to handling CLs in general.

The 2023 report didn’t speak to these concerns. Worse, it backed off positions it advocated in the past. For example, the document no longer advocated that CLs be used only as a last resort. It also dropped any mention of the need to curb specific countries’ abuses of CLs, including through enforcement. None of this is about the waiver. It is about CLs more broadly, and the 2023 report had nothing to say about them.

Let’s start with the language.

In 2018, 2019 and 2020, the report called for CLs to be used when all else fails, including negotiations over voluntary licenses (VL). Here is the language: Governments should use CLs “in extremely limited circumstances and after making every effort to obtain authorization from the patent owner” rather than “as a tool to implement industrial policy….” Those lines can’t be found in the 2023 report.

In 2018, 2019 and 2020, the report also said CLs should not be used as part of a strategy to bargain for a lower price, or get a VL, from the patent owner. That language is absent from the 2023 report.

Next, consider tactics.

Previous documents have taken a “name and shame” approach to dealing with countries abusing CLs. The 2020 report, for example, singled out India for using threats of CLs to negotiate drug prices. Indeed, the U.S. Trade Representative has been flagging concerns with India and CLs since at least 2012 and cautioned Chile to use CLs only in extremely limited circumstances and after making every effort to obtain authorization from the patent owner. Previous documents have also outlined problematic CL activity in Indonesia and Malaysia. The 2023 report, even though those problems with CLs persist, was simply silent on the issue.

Previous documents also called for “out-of-cycle reviews” to persuade countries to uphold U.S. intellectual property. Out-of-cycle reviews are repeat inspections that put trade partners on notice, under the threat of enforcement. Past administrations have used them to coax compliance with obligations under the WTO and PTAs. The 2018 report, for example, placed Colombia on the “priority watch list” after an out-of-cycle review was triggered by concerns about the U.S.-Colombia pact. That tactic has largely fallen by the wayside.

The TRIPS waiver expires in five years. CLs will be used long after that. The U.S. Trade Representative can support the waiver without compromising the future of America’s innovative industries by giving a free pass to users (and abusers) of CLs more generally. If the United States wants to lead on global intellectual property, the 2024 report will have to strike a very different tone.