July 12 U.S.-Brazil IPR Technical Cooperation

UNCLAS SECTION 01 OF 03 BRASILIA 001978

SIPDIS

STATE PASS USTR -- YANG
NSC FOR CRONIN
AID FOR LAC/SA
TREASURY FOR OASIA - DAS LEE AND FPARODI
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON
JUSTICE FOR CCIPS
DHS FOR ICE CYBER CRIMES CENTER

E.O. 12958: N/A
TAGS: KIPR ETRD IPR
SUBJECT: July 12 U.S.-Brazil IPR Technical Cooperation
Meeting

Refs: A) Brasilia 487 (Notal) B) Brasilia 599


1. Summary and Introduction. On July 12, a team from
USDOJ's Computer Crime and Intellectual Property Section
(CCIPS),the Department of Homeland Security's Immigration
and Customs Enforcement (ICE) Unit, and USTR met with
counterparts from the Ministry of Justice, Federal Police,
Receita Federal and Foreign Ministry for the first meeting
under an informal technical cooperation initiative on IPR
enforcement. The technical cooperation initiative is a by-
product of discussions with the GoB over the last year
regarding the possible withdrawal of Brazil's trade benefits
under the Generalized System of Preferences (GSP) due to
ineffective copyright protection (ref A). On April 4, the
GSP Review was extended until September 30, 2005. While the
threat of the GSP Review has remained in place, the USG has
also sought since April to foster a bilateral exchange
between law enforcement and customs agencies specifically to
support a timely implementation of Brazil's recently
formulated national anti-piracy plan (ref B). End Summary
and Introduction.


2. The U.S. delegation was led by Christopher Merriam,
International Coordinator for CCIPS and included Jason Gull,
a trial attorney with CCIPS; Elizabeth Perino, Section Chief
of the ICE Cyber Crimes Center; and Leslie Yang, USTR
Director for Mercosul; representatives from AmEmbassy
Brasilia Econ, DHS, Legatt, and FCS also attended. Heading
up the Brazilian Delegation was Marcio Costa de Menezes e
Goncalves, Executive Secretary of Brazil's National Anti-
Piracy Council (CNCP). He was joined by Valquiria Teixeira
and Adauto Martins of the Federal Police; Mauro Brito, head
of a specialized enforcement section within Receita
Federal's customs unit; Lilian Pinho, of the Public
Prosecutor's office in the state of Rio de Janeiro; and
Otavio Brandelli and Joao Storti of the Foreign Ministry.


3. The discussions focused on three subject areas
identified during a June 1 bilateral digital video
conference: risk analysis relating to customs, cybercrime,
and legislative initiatives.

Risk Analysis - Customs
--------------


4. Brito noted an interest in working with other countries
to obtain information that would enhance Brazilian customs'
ability to evaluate the risk associated with particular
importers and exporters. Yang noted that some countries
have set up a registry to identify legitimate importers of
blank CDs. Goncalves said the CNCP was considering
establishing one central office for registration of
copyright titleholders to enable better coordination between
right-holders and law enforcement. Brito also said customs
would like to work more closely with the United States and
other countries to address under-invoicing. The Deputy DHS
Attache encouraged Brito to use a bilateral cooperation
agreement between Brazilian customs and DHS as a vehicle for
seeking information that would be useful in their efforts.
It was agreed that the subject of risk analysis would be
taken up in greater detail during subsequent discussions.


5. Brito also outlined Receita Federal's customs
modernization plan, including plans to improve
infrastructure and increase the use of technology, such as
scanners and optical character reading cameras, to enhance
customs' ability to regulate the entry of products. In
March 2005, Brazilian customs established a special
coordination unit for inspection oversight, establishing
five separate sections to deal with: international trade
related duties, enforcement (smuggling),classification of
goods, risk analysis, and security. According to Brito, the
special enforcement unit is slated to grow from 200 to 1,000
officers within two years, and by the end of three years it
should be sufficiently large to deploy throughout the entire
country. In addition to using scanners, the unit will have
an aviation team outfitted with planes, helicopters and
speedboats. Brazilian customs has also been exploring tax
evasion control measures, such as the application of seals
or serial numbers for CDs and DVDs, but is still discussing
the issue with domestic industry which has not yet supported
the approach.

Cybercrime
--------------


6. The Brazilian delegation displayed an intense interest
in discussing an array of issues related to the protection
of intellectual property and the internet. Teixeira of the
Federal Police said that although formally a new unit within
the Federal Police to combat cybercrime has not been formed,
it is functioning in practice and she requested that an
informal channel of communication be established between
Brazilian and U.S. authorities to enable quick communication
for time sensitive inquiries. The U.S. delegation welcomed
direct inquiries to CCIPS and ICE from Brazilian
authorities, but noted that inquiries directed through
either the DHS or Legatt offices at post would probably be
the most expeditious approach, particularly given language
differences.


7. During the meeting, information was exchanged regarding
internet service provider (ISP) liability within the U.S.
and Brazilian legal systems, legal processes and mechanisms
for securing evidence, difficulties and potential options
for determining domain name ownership, and problems with the
improper use of trademarks within worldwide web domain
names. The Brazilian delegation requested copies of
pertinent U.S. legislation for reference as further changes
in Brazilian laws are contemplated; they described current
legislation as not very advanced.


8. Goncalves explained that Brazilian sellers of
illegitimate products over the internet are increasingly
acquiring domain names abroad to avoid penalties within
Brazil. Merriam noted that a substantial portion of
enforcement in the United States is as a result of civil
action. The difficulty of monitoring service providers and
auction sites for the sale of counterfeit goods was
discussed, but the U.S. delegation also pointed out that
auction sites are a resource for information useful for law
enforcement. In general, the U.S. delegation described the
benefits of working in partnership with the large service
providers and auction sites, which have a self-interest in
denying access to purveyors of pirated goods, and U.S. law
enforcement's focus on smaller providers who may be actual
collaborators in criminal activity. The U.S. delegation
explained that U.S. law distinguishes between an attempt by
a domain name holder to extort a trademark owner, which is
illegal, and the legal use of trademarks in domain names if
for the purpose of education or comparison.


9. Both sides conveyed an interest in continuing the
discussion in this area. Merriam encouraged the Brazilian
delegation to forward any questions they have in writing in
order to keep the dialog going and to increase the
productivity of a future meeting.

Legislative Initiatives
--------------


10. Brandelli provided an overview of changes to Brazilian
IPR law in recent years, including the ability to hold
owners of buses used to transport counterfeit goods as
liable and the elimination of customs-free transit for blank
CDs through Brazil to Paraguay. Another change has enabled
a copyright association to be considered an "associated
party" within legal proceedings. Pinho claimed that
copyright enforcement problems stem not so much from a need
to change legislation, but from a lack of consistent
application of the existing law. One change being
considered to Brazilian law would enable law enforcement to
retain only a sample of counterfeit products seized, either
destroying or donating the remainder. In response to a
question from the Brazilian side, the U.S. delegation
explained that by working closely with right-holders, U.S.
law enforcement typically is able to determine definitively
before seizure that the products are in fact counterfeit.
The quantity and monetary damage thresholds of the U.S.
criminal copyright law were also explained.


11. Although not directly related to legislation, Pinho
described how state level prosecutors have organized to
standardize operations, procedures and penalties to address
organized crime and her efforts to apply this same model for
organizing state prosecutors to combat piracy. Pinho said
she is drafting a handbook for use by civil, military,
highway, state, and federal police as well as customs agents
to explain techniques for recognition, surveillance, and
intelligence gathering related to piracy.

Next Steps
--------------


12. At the conclusion of the meeting, both sides described
the discussion as very useful and expressed an interest in
continuing the dialog, although no date was set for a future
meeting. Post continues to believe that this type of
exchange provides the USG with a useful mechanism for
engaging the GoB in a productive way on its efforts to
combat piracy and to potentially make a positive impact on
implementation of the GoB's national anti-piracy action
plan.


13. This cable was cleared by the U.S. delegation.

Manganiello