Oct 232014
 

http://wikileaks.org/cable/2006/09/06MANILA3805.html#

Reference ID Created Released Classification Origin
06MANILA3805 2006-09-11 04:19 2011-08-30 01:44 CONFIDENTIAL Embassy Manila
VZCZCXRO6274
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #3805/01 2540419
ZNY CCCCC ZZH
O 110419Z SEP 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2895
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 03 MANILA 003805

SIPDIS

SIPDIS

STATE FOR EAP/MTS
STATE PASS TO USTR FOR BWEISEL AND DKATZ
USDOC FOR 4403/ITA/MAC/SBERLINGUETTE
USDOC PASS TO USPTO FOR PETER FOWLER
BANGKOK FOR DOJ CHRIS SONDERBY

E.O. 12958: DECL: 08/31/2016
TAGS: ECON ETRD EINV KIPR RP
SUBJECT: BELEAGUERED OPTICAL MEDIA BOARD CONTINUES TO FIGHT IP PIRACY

Classified By: ECONOMIC COUNSELOR LARRY MEMMOTT FOR REASONS 1.4 B AND D

¶1. (C) Summary: The Philippine Optical Media Board (OMB)
faces insufficient funding, bureaucratic infighting, and
unjustified criticism as it attempts to deal with the
difficult piracy problem of the Philippines. Under-funding
hampers the agency’s ability to effectively enforce the
Optical Media Law. Intellectual Property Office Director
General Adrian Cristobal may be trying to take control of the
OMB while a local Filipino non-governmental organization
dedicated to improving IPR protection is heavily criticizing
the OMB, seemingly without justification. Despite these
problems, the OMB continues to lead useful raids and find
creative ways to extend its reach. US intellectual property
rights holders believe the OMB and its Chairman, Edu Manzano
are doing an outstanding job. End Summary.

¶2. (SBU) Econoff met with numerous individuals including Edu
Manzano, Chairman of the Optical Media Board; Adrian
Cristobal, Director General of the Intellectual Property
Office; and other GRP officials and businesspeople concerned
with IPR in July and August to discuss recent developments at
the Optical Media Board.

————–
STILL NO MONEY
————–

¶3. (SBU) The OMB continues to conduct numerous raids against
IPR violators despite its persistent lack of funds. OMB’s
current funding covers personnel and administrative costs,
but allocates only $19,500 for operations. With a major raid
costing between $5000 and $6000, the money does not go far.
Resty Meneses who was appointed as the new OMB Executive
Assistant in May said OMB does not even have money to buy
water or snacks for investigators during a raid operation
(crucial for getting anything done in the Philippines). As a
result, the OMB can undertake major raids only if all
operational costs are paid by intellectual property rights
(IPR) holders such as the Motion Picture Association of
America (MPAA). The additional funds of over $200,000 from
the Manila Film Festival promised by President Arroyo for
operational expenses has not materialized. Instead, OMB
received a nominal sum which the OMB Oversight Committee
specified could not be used for operations. OMB Chairman Edu
Manzano said he is personally financing some of the agency’s
operations, and he may not get reimbursed.

¶4. (SBU) The lack of funding also affects the agency’s
staffing. Manzano said of the 19 enforcement operations
positions, only 13 are currently filled. He also has four
legal positions, all vacant. People are going to the private
sector because they can make a lot more money, Manzano said.
Executive Director Meneses has not received a paycheck from
the OMB since he started work in May. Manzano is paying him
his salary out of his own pocket, Meneses said.

———————–
POLITICS AND CRITICISMS
———————–

¶5. (C) In addition to lack of resources, Manzano said he is
convinced, based on information from several sources, that
Adrian Cristobal, Director General of the Intellectual
Property Office (IPO), is maneuvering to take over the OMB.
Manzano says he continues to maintain a close friendship with
Cristobal, but says Cristobal may be motivated by personal
political considerations, suggesting that by having a more
active role in enforcement, Cristobal may be able to increase
his public visibility before a likely bid for the Senate in
¶2007. Cristobal has a closer link to President Arroyo than
Manzano and he may be using that link to influence policy
direction with respect to the OMB, Manzano said.

¶6. (SBU) The OMB was initially established as an autonomous
agency reporting directly to the Office of the President, but
in recent months, Cristobal has gained increasing influence
over the OMB. Cristobal asked the President to officially
designate the IPO as the oversight authority over all IPR
agencies including the OMB, which President Arroyo announced
in January 2006. While all IP agencies remain autonomous,
the President’s directive empowered Cristobal as the
principal coordinator of GRP policy on IPR. In May 2006, the
President placed OMB under the Department of Trade and
Industry (DTI) and directed OMB to report to Secretary

MANILA 00003805 002 OF 003

Favila. Moving OMB to DTI essentially elevated Cristobal’s
ability to directly influence policy with respect to OMB
given its placement within his own agency and his role as
senior official for IP policy. Cristobal also sits on the
Optical Media Board Oversight Committee.

¶7. (C) Eduardo Sazon, Vice Chairman of the Intellectual
Property Coalition which represents mainly Filipino
innovators and lawyers, recently submitted a confidential
report to Cristobal arguing that the OMB is not fulfilling
its mandate and is largely ineffective. Manzano is unaware
of this report. The Intellectual Property Coalition works
closely with the Intellectual Property Office and several of
its members are close contacts of Director General Cristobal.
Sazon told econoff that the OMB is only implementing the
enforcement requirements of the Optical Media Act and none of
the administrative responsibilities, which include licensing,
collection of fees, and enforcement of fines for
administrative violations. OMB’s staff is disorganized,
there are no lawyers, and the implementing rules and
regulations (IRRs) are not readily available and understood
at all levels, Sazon added. (Comment: The Embassy has
worked closely with the OMB since its establishment three
years ago. USAID has provided significant technical
assistance. While the OMB shares some of the weaknesses
common to GRP institutions, we find these criticisms to be
largely inaccurate.)

¶8. (C) Cristobal told econoffs the OMB is maintaining
successful raid activity, but needs to address organizational
and strategic issues. However, he said he cannot make an
overall judgment because he “is busy running his own
organization.” Manzano told econoff that Cristobal submitted
to the President a confidential report, which Manzano still
has not seen, with policy recommendations likely affecting
OMB. “This is highly unusual,” Manzano said, “in the past,
we consulted on such policy recommendations and cleared them
with each other before sending them to the President.”

——————————————-
US MOTION PICTURE INDUSTRY PLEASED WITH OMB
——————————————-

¶9. (SBU) Despite a lack of resources and his worries about
the political maneuverings and criticisms, Manzano continues
to persevere. He has taken a much more active leadership
role in the organization this year and seems personally
committed to the agency’s success. Representatives from the
Motion Picture Association of America (MPAA) had only
positive things to say about Manzano and the OMB, noting that
he is doing an “outstanding job.” MPAA says the OMB has
conducted a record number of raids, has excellent
investigators, and is working closely with MPAA to address
optical media piracy. They and others in the private sector
are also impressed with new Executive Director Meneses who
they say is energetic, enthusiastic, and experienced.

——————–
OMB TRIES NEW THINGS
——————–

¶10. (SBU) Trying to use his funds creatively, Manzano is
developing new initiatives to maximize the OMB’s impact. One
such program is what he calls “noise raids” in which he sends
out his staff in yellow t-shirts that clearly identify them
as agents of the OMB. While they don’t actually conduct a
raid, Manzano said, his staff is so recognizable that as soon
as they show up, the pirates shut down their operations
fearing seizures and arrests. Manzano said he does a couple
of these noise raids a week in addition to a regular
enforcement operation simply to “cause trouble and raise
visibility.”

¶11. (SBU) Another initiative is negotiating a memorandum of
agreement with Ayala Malls which owns some of the premier
malls in the Philippines. Under this agreement, Ayala would
formally agree to prohibit vendors of illegitimate optical
media products to operate in their malls. Ayala would
self-police its vendors and OMB would commit to fewer raid
actions against those malls. If the initiative is
successful, Manzano would like to pursue it with other malls
as well. Another program he is trying is a 60 day “crack
down on piracy” campaign he is coordinating with local
government units outside the national capital region in order
to raise awareness of optical media piracy issues in other

MANILA 00003805 003 OF 003

parts of the country.

——-
COMMENT
——-

¶12. (C) The OMB is a highly visible government agency that
earned much praise from President Arroyo and from the US
Government over the past year, making the position of OMB
Chairman politically desirable. While there is more the OMB
can be doing, the agency is severely handicapped by a nearly
non-existent budget. Criticisms from the Intellectual
Property Coalition appear to be inaccurate. Manzano is
respected by US rights holders who say he is doing the best
job he can, given the circumstances. A bid from Cristobal to
take over the OMB for personal political reasons is possible,
but unlikely. More likely, Cristobal is only looking to
increase his influence over the broader IPR apparatus of the
GRP.
Jones

   

 

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