SENIOR IP JUDGE DEMOTED AMID RUMORS OF CORRUPTION

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 003692

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E.O. 12958: DECL: 08/29/2016
TAGS: ECON ETRD EINV KIPR RP
SUBJECT: SENIOR IP JUDGE DEMOTED AMID RUMORS OF CORRUPTION


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

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SUMMARY
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1. (C) The Supreme Court of the Philippines recently demoted
Judge Antonio Eugenio, who was the senior executive judge
assigned to handle intellectual property rights (IPR) cases.
Citing "the interests of the service," the Supreme Court
stripped Eugenio of his executive judicial authority and
directed that he no longer handle IPR cases. Contacts within
the GRP and the private sector report rumors that the
demotion stemmed from the influence over the Supreme Court of
a powerful Chinese businessman over the Supreme Court who was
unhappy with the raids targeting his malls. The Supreme
Court decision raises transparency concerns and may make
judges and prosecutors more cautious when dealing with IPR
cases that may negatively affect powerful individuals. END
SUMMARY.

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BACKGROUND
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2. (U) As part of an effort to improve the prosecution and
handling of IPR cases in the Philippines and to demonstrate
the GRP's commitment to better IPR protection during the
Special 301 out-of-cycle review, in December 2005 the GRP
designated three judges to handle all IPR cases in metro
Manila. One of these judges was Senior Executive Judge
Antonio Eugenio. As the only one of the three judges with
executive authority, Judge Eugenio's position carried special
powers including the ability to issue warrants within a
24-hour period for any jurisdiction in the country.
Non-executive judges can only issue a warrant once the case
has been assigned to them, a process that can take several
days to several weeks, increasing the risk of information
leaking with respect to potential arrests. In addition, they
are limited to issuing warrants within their jurisdictions.


3. (U) Since Judge Eugenio could issue warrants expediently
for any jurisdiction in the country, he was receiving the
majority of warrant applications for violations of IP laws.
The Optical Media Board, headed by Chairman Edu Manzano,
filed almost all of its warrant applications with Judge
Eugenio because they could be assured of prompt action. He
approved most of OMB's requests and quickly, Manzano said.


4. (SBU) In late July, the Supreme Court rescinded Judge
Eugenio's executive authority, reassigning him to another
court and stating that he would no longer handle IPR cases.
Judge Eugenio told econoff the decision was justified as "in
the interest of the service." However, Eugenio said a court
administrator told him privately that the Supreme Court felt
he had an "overly burdensome workload." Immediately prior to
the decision, the Supreme Court requested a review of all
warrants issued by Judge Eugenio. The results showed that
more than 95% of those warrants resulted in seizures of
pirated optical media or capital equipment used to produce
the pirated material. Judge Eugenio said he certainly never
complained about the workload and the decision is highly
unusual given his success rate. Judge Eugenio has since been
replaced by Senior Executive Judge Reynaldo Ros, who is new
to IPR cases.

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REPORTS SUGGEST EXTERNAL INFLUENCE OVER SUPREME COURT
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5. (C) We have been told several different versions of the
same story as to the possible underlying reasons for Judge
Eugenio's demotion. According to Manzano, a number of the
warrants issued by Judge Eugenio resulted in a series of
raids by the OMB at malls owned by an influential
Filipino-Chinese businessman, Mariano Nocom. Nocom is well
connected to Supreme Court Justice Artemio Panganiban,
Manzano said, and Nocom complained to him about the high raid
activity and asked that the Supreme Court intervene.


6. (C) The regional representative of the Motion Picture
Association of America (MPAA) described a slightly different
version of events, which he said is based on reliable
information from a contact who was directly involved in the
process. In this version, Nocom plays golf with two members
of the Supreme Court and exerted influence through them for

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Judge Eugenio's demotion. According to MPAA, all Supreme
Court justices voted in favor of the decision except for the
Chief Justice, who reportedly abstained.


7. (C) Several other sources in the private sector also
speculate that Judge Eugenio's dismissal was based on the
influence of a powerful businessman over the Supreme Court.
Judge Eugenio himself told econoff he was specifically asked
a few months ago by a "bigwig of the Supreme Court" to stop
issuing warrants against Chinese mall owners. Eugenio
refused and was subsequently ordered to submit his entire
caseload for review.


8. (SBU) Nocom owns large amounts of real estate including
much of the land around Ninoy Aquino National Airport and
various malls and shopping complexes throughout Manila. He
owns several malls in Quiapo, an area notorious for its sale
of pirated optical media and counterfeit goods. In a 2004
local news article, Nocom announced he would ban the sale of
all pirated optical media from his establishments and
reportedly said "to succeed against IPR pirates, legitimate
business groups should also do their part." Nocom also owns
substantial shares in Banco de Oro, one of the major local
banking institutions. The extent of Nocom's holdings and
wealth are not known, but he is considered extremely wealthy
and influential, Manzano said.


9. (C) Many contacts in the IPR enforcement agencies and the
private sector expressed concern over Judge Eugenio's
demotion. While a few contacts found him unhelpful on a
specific case, most say Judge Eugenio was a firm ally in the
fight against IPR violators and his demotion is a significant
loss. Eugenio said he did not fight the decision because he
was "just a regional trial court judge and we don't fight
City Hall." According to Manzano, Judge Eugenio also backed
down because of personal political considerations. His wife
works for a Supreme Court Justice.

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COMMENT
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10. (C) With more than 95% of Judge Eugenio's warrants
resulting in successful raids against IP violators, his
demotion does not make sense, except as a corrupt favor or a
means of reducing IPR protection. The demotion will likely
send a strong deterrent message to other judges and
prosecutors working IP cases in its implication that those
with power and influence may be able to negatively affect an
individual's career if they are unhappy with decisions on IPR
cases.
Jones