Sep 212014
 

http://wikileaks.org/cable/2005/10/05MANILA5068.html
Reference ID Created Released Classification Origin
05MANILA5068
2005-10-27 07:18
2011-08-30 01:44
UNCLASSIFIED
Embassy Manila

This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 MANILA 005068

SIPDIS

STATE FOR EAP/EP, EB/IFD, EB/TPP/BTA/ANA, EB/TPP/MTA/IPC
STATE ALSO PASS USTR FOR BWEISEL AND DKATZ
STATE ALSO PASS USAID, OPIC, USDA
TREASURY FOR OASIA FOR AJEWELL
USDOC FOR 4430/ITA/MAC/DBISBEE
USDOC PASS USPTO FOR PFOWLER

E.O. 12958: N/A
TAGS: ECON EFIN ETRD KIPR RP
SUBJECT: USTR VISIT LAYS GROUNDWORK FOR JANUARY SPECIAL 301
IPR OUT-OF-CYCLE REVIEW

SENSITIVE BUT UNCLASSIFIED – NOT FOR INTERNET DISTRIBUTION

¶1. (SBU) Summary: USTR, Department of Commerce (DOC) and
U.S. Patent and Trademark Office (USPTO) officials,
accompanied by econoffs, met with congressional leaders and
GRP officials to discuss IPR protection and the upcoming
Special 301 Out-of-Cycle review (OCR). The GRP is keen to
get off the Priority Watch List, but faces an uphill battle.
IPR enforcement agencies remain stalled by a general lack of
authority and resources. Proposed special IPR courts alone
might not lead to improvement because appeals would place IP
cases back into the old system. Recent proposed legislation
on pharmaceutical patents pose a weakening of a generally
strong IP code. However, the Intellectual Property Office
continues to make progress and a visible decline in the
overall availability of pirated and counterfeit goods were
noted. Removal from the Priority Watch List is a
possibility, but more action is needed before January. End
Summary.

¶2. (U) U.S. Trade Representative (USTR) Director for
Southeast Asia and Pacific Affairs David Katz, U.S.
Department of Commerce (DOC) Deputy Director David Bisbee
and U.S. Patent and Trademark Office (USPTO) Senior Counsel
Peter Fowler visited Manila October 16-17 to meet with RP
Congressional leaders and executive branch counterparts in
preparation of an upcoming 301 IPR Out-of-Cycle Review
(OCR), which will determine whether the RP remains on the
Special 301 Priority Watch List. The meetings focused
primarily on IPR protection and enforcement, although they
touched on broader economic issues as well (reported in
septel).

——————————————— ————–
IPR ENFORCEMENT HAMPERED BY LACK OF RESOURCES AND AUTHORITY
——————————————— ————–

¶3. (SBU) Officials at the Optical Media Board (OMB) and the
Bureau of Customs expressed frustration with an overall lack
of resources and authority. OMB reported that their
staffing, resources and budget remain constant, but that
rapidly rising utility costs are taking a toll. Of their
USD 428,000 dollar budget, only about USD 89,000 is
available after paying personnel and operating costs. The
OMB proposes nearly doubling its staff from 66 to 111 to
effectively implement its mandate. For OMB, interagency
cooperation is another stumbling block. Its representative
highlighted one recent case in which they tried to work with
the National Bureau of Investigation (NBI), but the planned
raid ultimately failed because NBI acted without OMB.

¶4. (SBU). The IPR enforcement unit at the Bureau of
Customs is still in limbo. The unit was established in
2003, took one year to implement and still is not
functional. The unit has no fixed budget nor permanent
staff. Currently, the unit is working with seven agents and
one lawyer. Customs officials conservatively estimate that
they need at least seven lawyers and 25 to 30 agents to be
effective.

————————-
IPR COURTS ON THE HORIZON
————————-

¶5. (SBU) The GRP’s Supreme Court plans to implement three
special IPR courts in metro Manila soon, according to Ismael
Khan, Chief of the Court’s Public Information Office. Three
judges will be designated with exclusive criminal and civil
jurisdiction over IPR cases. The Court does not plan to
create a separate IPR appellate court; existing appellate
courts will accommodate IPR appeals so once a case is
appealed, prosecutors will encounter long delays once again.
There are over 1400 IPR cases pending with 95 percent of
cases concentrated in Manila. Khan commented that if the
caseload becomes too heavy, the Supreme Court will simply
designate more IPR courts. Khan emphasized that it is
important to try and accomplish these changes within the
existing judicial framework rather than through Congress as
legislative initiatives would be time consuming and possibly
unsuccessful.

¶6. (SBU) Comment: For the GRP and the Supreme Court,
creation of IPR courts is a key initiative with respect to
IPR. While the current initiative demonstrates progress,
there is a risk that it could become a bureaucratic
reshuffling instead of a more permanent, effective
legislative change. The fact that there is no provision for
a special IPR appellate court may render the IPR courts
ineffective. End Comment.

——————————————— ———
U.S. STAKEHOLDERS WORRIED ABOUT PHARMACEUTICAL POLICY
——————————————— ———

¶7. (U) In discussions with U.S. IPR rights holders, Katz,
Fowler and econoffs heard concerns about a recent bill
sponsored by Senator Roxas to amend the Intellectual
Property Code of the RP, with respect to patents and
parallel imports for pharmaceuticals. Roxas’ proposal would
change the IP Code so that the period of patent protection
begins after the product has been introduced anywhere in the
world rather than just in the RP. Pharmaceutical companies
believe that this will essentially cut the time frame for
patent protection in half to 10 years. The Roxas bill will
also permit pharmacies and other entities licensed to
distribute pharmaceuticals to avail of parallel import
schemes. Currently, only government facilities and programs
can legally import drugs from countries that do not provide
patent protection.

¶8. (SBU) The Intellectual Property Office (IPO) and
Philippine pharmaceutical representatives co-sponsored a
forum to discuss the Roxas bill, which by coincidence took
place just after the USTR/USPTO visit. Embassies were not
invited, but preliminary reports indicate that the dicussion
was heavily biased toward the Roxas bill. The IPO told us
that the discussion covered an “educational agenda.” (Note:
Embassy will closely monitor developments on this proposed
legislation as it is likely to become a key issue during the
Special 301 review. Embassy is seeking a meeting with Roxas
to explain our concerns with his bill. End note.)

——————-
IPO INCHING FORWARD
——————-

¶9. (SBU) Director General Adrian Cristobal of the IPO
emphasized that the focal point now for the GRP’s IP
strategy is the IP courts. IPO is also committed to
automating its patent registration and creating a searchable
database, which will greatly enhance record keeping. IPO
reports an annual four percent average increase in overall
filing rates for patents and trademarks. IPO officials are
working with the Central Bank to implement an electronic
patent filing system, which they hope to have online next
year. Cristobal noted that the majority of trademark
applications are made by Filipino applicants with only about
ten per cent attributed to foreigners.

¶10. (SBU) Cristobal stated that GRP interagency
cooperation is improving. IPO now has a full-time
secretariat chaired by a lawyer and regular case review

SIPDIS
meetings with prosecutors. Cristobal noted that key people
are beginning to recognize that piracy affects domestic
producers. Cristobal mentioned that the National
Telecommunications Commission (NTC) is talking about forming
its own IP unit, but IPO is working with them to try and
keep the IP function within IPO while possibly installing an
IPO technical expert at NTC.

¶11. (U) USTR stressed to Cristobal that the deadline for
interested party submissions for the OCR is December 2 so
that the review can be completed in January.

———————-
THE VIEW FROM CONGRESS
———————-

¶12. (SBU) In a meeting with Senator Ralph G. Recto, Senate
Committee Chairman on Ways and Means, USTR stressed the
importance of IPR protection to overall economic growth and
the investment climate. Recto’s position was that the
necessary laws have been passed and now it is a matter of
implementation. He stated that the GRP’s actions
demonstrate that they are fighting IPR violators. He added
that he is not aware of any large-scale production or
manufacturing of pirated or counterfeit goods in the
Philippines and that illegal goods found in the Philippines
come from Malaysia, China and other countries in the region.

¶13. (SBU) Econ Counselor, Commercial Counselor, Katz,
Fowler and Bisbee reviewed the IPR agenda at a private
dinner with key members of Congress from the House
Committees on Trade and Industry, Appropriations, Public
Information and Ways and Means. These members of congress
were concerned about how the Philippines’ Priority Watch
List status reflects badly on the investment climate. They
expressed interest in working with the GRP, especially the
IPO, is supporting stronger enforcement as well as meeting
with industry representatives with a stake in better IPR
enforcement.

——————————————— —–
VISIBLE REDUCTION OF COUNTERFEIT AND PIRATED GOODS
——————————————— —–

¶14. (SBU) The USTR/USDOC/USPTO team met with the
Intellectual Property Coalition, which includes Philippine
industry representatives who support stronger IPR measures,
to discuss general IPR issues and tour a local shopping mall
notorious for the sale of counterfeit goods (including
apparel, sunglasses, and cellular phones) and pirated
optical media (DVDs, music CDs, and computer software).
While such goods are still widely available, USG officials
noticed a decline in the overall quantity in comparison to
their first visit in February. A second mall visit the next
day affirmed this impression.

——-
COMMENT
——-

¶15. (SBU) The visit by USTR, DOC and USPTO provided a good
preliminary look at where the RP stands with respect to the
upcoming OCR. There is a real interest in the GRP, starting
with the President, to get the RP off the Priority Watch
List. However, there are still some key concerns that need
to be addressed, particularly the implementation of an
effective IPR court system and overall law enforcement. IP
legislation is strong in the RP, but implementation is
crucial. The team did see progress, but it is not yet
evident whether it is enough to justify removal from the
Priority Watch List. The Roxas bill and its potential to
weaken patent protection for pharmaceuticals is concerning
and will be monitored in coming weeks. In the meantime, the
visit heightened GRP awareness and emphasized the
opportunities inherent in the upcoming OCR.

JONES

   

 

Sorry, the comment form is closed at this time.