Brazil details retaliation on U.S. copyright, patents

BRASILIA (Reuters) - Brazil revealed on Monday a preliminary list of U.S. patents and intellectual property rights it could restrict unless both countries settle a long-standing dispute over U.S. cotton aid.

It is the second set of measures Brazil has unveiled in a week to pressure Washington to obey a ruling by the World Trade Organization that found the U.S. cotton subsidies and export credit guarantee program illegal.

Diplomats, trade experts and business leaders are closely watching the case, one of a few in which the WTO has allowed cross-retaliation, in which the wronged party can retaliate against a sector not involved in the dispute.

Brazil would become the first country ever to apply cross retaliation under WTO rules.

The new measures, which are still subject to public hearings, would suspend for a limited time U.S. patents on pharmaceuticals, chemicals and biotechnology.

They would allow Brazil to restrict copyrights in the music and audiovisual industry. The measures listed in an official publication would also allow the government to increase fees and tighten regulations on registration of intellectual property rights.

On March 8 Brazil detailed 102 U.S. goods that will be subject to import tariffs within 30 days unless a last-minute agreement is found.

Total retaliation between both series of measures would be $829 million.

The WTO gave Brazil the formal go-ahead last year to impose sanctions on U.S. imports.

U.S. Trade Representative Ron Kirk said last week the United States still hoped to strike a deal with Brazil to avoid the sanctions. If it cannot, it will have to try to persuade Congress to change the U.S. cotton program to satisfy Brazil’s concerns, he said.

Brazil has indicated it could accept a U.S. pledge to send a reform bill to Congress if Brazil were compensated for damages until the bill’s approval. Some Brazilian business leaders have proposed compensation through U.S. investments into cotton research, as well as more U.S. imports of Brazilian beef, orange juice and ethanol.

Reporting by Raymond Colitt; editing by Alan Elsner