SPECIAL 301 REVIEW: US EMBASSY TEL AVIV SUBMISSION

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000808

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E.O. 12958: DECL: 02/22/2016
TAGS: ECON ETRD KIPR IS ECONOMY AND FINANCE
SUBJECT: SPECIAL 301 REVIEW: US EMBASSY TEL AVIV SUBMISSION

REF: A. A) TEL AVIV 00689 (NOTAL)

B. B) 05 TEL AVIV 6279

C. C) 05 TEL AVIV 6006

Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d)


1. (C) Summary. The overall climate for protection of
intellectual property in Israel worsened in 2005. In
December 2005, the Knesset passed a revision to patent term
extension regulations that significantly curtailed the period
of patent protection for research-based pharmaceuticals. The
GOI championed this legislation despite strong USG statements
that the legislation harms IPR protection in Israel. The
draft copyright legislation presented to the Knesset in
October 2005 fails to provide national treatment to American
right holders as required by the 1950 U.S.-Israel Copyright
Agreement. The GOI officials who work on intellectual
property legislation are well trained and staffed, but have
consistently moved to protect Israeli domestic interests
rather than encourage a strong standard of protection for
IPR. Given the lack of progress on key issues in 2005 post
recommends that Israel remain on the Priority Watch List.
End summary.

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Patent Term Extension
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2. (C) The Knesset approved the revision to the Patent Term
Extension (PTE) legislation in December 2005 despite USG
efforts to persuade the GOI to suspend consideration of the
legislation pending further bilateral consultations. The
legislation shortened the term of protection for a
pharmaceutical patent extension in Israel to the "lowest
common denominator" and makes applying for an extension
unnecessarily burdensome. Most troubling, the legislation
has been enacted retroactively, meaning that U.S. companies
are denied protection for patent extensions that have already
been approved. These factors have combined to result in a
measurable degradation of the protection for pharmaceutical
patents in Israel over the last year.

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Data Exclusivity
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3. (C) Despite GOI commitments to revisit the data
exclusivity legislation, post has no indication that the GOI
is interested in amending the most objectionable clauses of
the bill. The legislation does not prevent Israeli companies
from gaining access to confidential files which foreign
pharmaceutical companies must submit in the course of
applying to export a product to Israel. In effect, a company
which registers a drug in Israel risks losing the ability to
sell the product in all other countries where a non-TRIPs
compliant data exclusivity regime has been adopted. In
addition, the legislation provides a direct advantage to
Israeli generic manufacturers, allowing them to rely on the
file during the period of "exclusivity" for purposes of
preparing to launch the generic product. This provision
ensures that generic manufacturers with access to the files
are the first to market the drug worldwide when protection
expires.

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Copyrights
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4. (C) The draft copyright legislation fails to protect US
IPR interests in several ways. Despite a commitment by the
GOI to uphold national treatment as required by the 1950
U.S.-Israel Copyright Agreement (espoused in an exchange of
letters between USTR and the Ministry of Justice in October
2004),no language regarding this protection is included in
the draft legislation. Local representatives of U.S. rights
holders are concerned because Israeli law requires that
treaties and agreements be enacted through national
legislation, and failure to include language in the copyright
law could leave an unintended legal loophole for those with
an intent to infringe. In addition the draft legislation
does not contain language defining end-user piracy as a
crime. The legislation does not provide protection for
phonograms at the same level as for other creations.
Numerous other minor technical problems with the draft
legislation (which appear to be held over from language from
the original UK Copyright Act) can be amended quite easily,
but will require that the drafters of the legislation be
willing to propose the changes to the Knesset committee
considering the legislation.

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Training
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5. (C) Post believes that regular engagement with GOI
officials responsible for drafting copyright legislation via
visits or DVCs will be necessary over the next six months to
secure improvement in the protections provided in the
legislation. GOI legal staff who draft copyright and patent
laws are well trained, and declined invitations for IPR
training programs provided by USG agencies last year.

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Recommendation
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6. (C) Given the lack of progress on improving data
exclusivity legislation, the passage of patent term extension
revisions that shorten patent protection and retroactively
erase already-granted patent term extensions, and the gaps in
the draft copyright bill, post recommends that Israel remain
on the Priority Watch List. Israel has shown no inclination
to engage with the USG to make improvements in these laws.
Without the continued PWL designation, post sees no prospect
of positive movements in the immediate future either. Given
that 2006 is an election year and a new government will be
formed in April, an out-of-cycle review in the fall, once the
new GOI has had time to get its bearings, might help move
these issues forward.

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