KYRGYZ GOING THROUGH THE MOTIONS OF IPR PROTECTION

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SIPDIS

SENSITIVE
SIPDIS

DEPT FOR SCA/CEN (GEHRENBECK)

E.O. 12958: N/A
TAGS: KIPR ECON EINV KG
SUBJECT: KYRGYZ GOING THROUGH THE MOTIONS OF IPR PROTECTION

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1. (SBU) Summary: Kyrgyzstan's IPR agency chief Roman Omorov
recently claimed that the number of confiscations of pirated
audio/video products in 2006 should nearly double the 20,000
pirated items confiscated in 2005. Based on analyses by
Omorov's staff, nearly 80% of items seized by police for
inspection are determined to be counterfeit. Counterfeit
DVDs and CDs, produced in Russia, Kyrgyzstan and elsewhere,
sell for $1.25-$6.25 each depending on quality and origin.
Despite the increase in confiscations, Kyrgyz markets appear
to be teeming with suspect goods. The low-profile campaign
against IPR violations will likely continue unless complaints
from the owners of intellectual property rights stir the
authorities into taking a more dynamic approach to IPR
protection. End summary.

Intellectual Property Environment
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2. (U) Kyrgyzstan, which is not listed in the Office of the
United States Trade Representative's most recent Special 301
report, is a challenging market for copyrighted, trademarked
and otherwise protected intellectual property. According to
the International Intellectual Property Alliance's 2004
"Special Mention" regarding Kyrgyzstan (no subsequent IIPA
entries),Kyrgyzstan lacks effective enforcement mechanisms
to prevent copyright violations. According to embassy
observations, suspect DVDs sell for 100-250 soms
($2.50-$6.25) each, while CDs cost 50-150 soms ($1.25-$3.75)
each. These DVDs and CDs, originating primarily in Russia
and Kyrgyzstan, are sold openly in Kyrgyz shops.

Protecting Intellectual Property
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3. (U) State Agency of Intellectual Property of the
Government of the Kyrgyz Republic (Kyrgyzpatent) Director
Roman Omorov told emboff in a recent meeting that there are
nearly 43,000 "industrial property" rights, mostly trademarks
of foreign origin, registered in Kyrgyzstan. Kyrgyzpatent
employs nearly 150 personnel to implement and administer 13
existing national laws and 28 international agreements
governing intellectual property rights (IPR) in Kyrgyzstan.
Among its activities, Omorov emphasized that his agency not
only responds to complaints, but initiates its own
investigations of alleged IPR violations. Kyrgyzpatent
provides training to law enforcement personnel, who in
conjunction with the Prosecutor General's office, are charged
with enforcing IPR.

High Rate of Counterfeiting
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4. (U) For 2005, Omorov claimed that Kyrgyz authorities
destroyed 20,000 pirated audio/video discs and cassettes. At
current rates, he added, that number will be doubled in 2006.
Omorov said the Prosecutor General's office initiates 5-10
IPR infringement cases per year, and estimated that police
raid suspected retailers of counterfeit products 5-6 times
per month. Based on Kyrgyzpatent's "expert analysis," Omorov
noted that nearly 80% of items confiscated by the police are
counterfeit.


5. (U) Omorov assured emboff that there are no
counterfeiting operations based in Kyrgyzstan. When asked
about enforcement activities outside the audio/video sphere,
Omorov mentioned one case involving a Chinese firm that used
the trademark of Baipak, a prominent Kyrgyz sock
manufacturer, in the export of socks to Kyrgyzstan. He knew
of no instances of counterfeit medicines being sold in
Kyrgyzstan. However, embassy medical personnel report
anecdotal instances of branded medicine sourced locally

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having no effect, but imported supplies of the same brand
working for the patient.

An Open Door for More IPR Protection
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6. (U) Omorov welcomed any information that would aid Kyrgyz
authorities in enhancing the protection of intellectual
property rights related to computer software, audio/video
products and medicines. He confirmed Kyrgyzstan's plans to
mark World Intellectual Property Day (April 26),and invited
emboff to witness the destruction of counterfeit products in
conjunction with the day's ceremonies.

Comment
--------------


7. (SBU) With suspected counterfeit goods openly sold
throughout Kyrgyzstan, Omorov's explanation of IPR
enforcement activities demonstrated a modest effort to meet
Kyrgyzstan's IPR commitments. Omorov's assurances that
Kyrgyzstan is not a source country for pirated and
counterfeit goods contradict embassy staff observations of
marketplace reality. Embassy personnel report that
higher-priced counterfeit goods are imported from Russia,
while cheaper, and generally lower quality items, are
produced locally. Based on prices and packaging, some
high-end stores appear to market legitimate DVDs and CDs.
However, there is little appreciation and press coverage of
intellectual property rights in Kyrgyzstan. Concerted action
by the authorities to protect IPR in Kyrgyzstan will likely
only occur in conjunction with complaints from the owners of
intellectual property rights.

YOVANOVITCH