NEW IPR LAW DOES LITTLE TO PROTECT PROCTOR AND

C O N F I D E N T I A L DAMASCUS 000284 SIPDIS SIPDIS NEA/ELA NSC FOR MARCHESE TREASURY FOR GLASER/LEBENSON E.O. 12958: DECL: 01/18/2016 TAGS: ECIN ECON ETRD KIPR PGOV SY SUBJECT: NEW IPR LAW DOES LITTLE TO PROTECT PROCTOR AND GAMBLE Classified By: A/DCM William V. Roebuck for reasons 1.5 b/d ¶1. (U) Summary. Intellectual Property Rights (IPR) are violated with impunity in Syria. If P&G,s experience is any guide, the new law signed last week by President Asad will do little to address the fundamental problems that confront the sector. End summary. ¶2. (SBU) On March 12, 2007, President Asad signed a new trademark and patent law, which the state-controlled press is presenting as an important advance in Syria,s protection of intellectual property rights (IPR) and another example of Asad,s commitment to economic reform. The law replaces the existing law dating from 1945, and for the first time acknowledges the existence of internationally-known brands and inventions. The law also attempts to reduce the number of frivolous trademark and patent law suits by increasing the cost and the number of reviews applications for trade-mark or patent must go through. A local lawyer who contributed to the drafting of the new law commented to us recently that he is disappointed that the law, as ratified, excluded some of the most important proposed reforms, but he was still hopeful the law was a step in the right direction. ¶3. (C) The day after the new law was signed, two regional managers from Proctor & Gamble (P&G),Ramy Zaki and Basma Moumtaz, sought our assistance to resolve an ongoing IPR dispute involving their operations in Syria. Three years ago, when P&G was just starting to enter the Syrian market, a Syrian national by the name of Tarif Afhas approached P&G reps and asked for a large &commission,8 threatening unspecified problems if P&G were to refuse the commission, according to Zaki. Zaki said at that time P&G already had an established relationship with a distributor it trusted (the scion of a leading Sunni businessman well-known to us) and so refused Afhas, advance. Following P&G's rejection, Afhas proceeded to produce a number of products using well-known P&G trademarks, such as Ariel detergent and Dove soap. Afhas is selling his knock-off P&G products on the local market at a price slightly below P&G,s own. When P&G sought local legal redress of Afhas, misappropriation, Afhas himself brought multiple legal suits against P&G, its lawyers, and its local distributor. Moumtaz commented that P&G,s local agent is now in court nearly weekly in a vain attempt to defend himself and P&G against one or the other of the many frivolous cases Afhas is successfully prosecuting against P&G. According to Zaki, P&G managers hoped to resolve the dispute quietly themselves but after months of escalating law suits and threats of product seizure, they,ve despaired of any solution without outside intervention. ¶4. (SBU) Comment. As the P&G managers opined to us, Syria doesn,t need a new law, but only a legal system that allows for existing laws to be fairly and consistently applied. As long as the SARG avoids any structural change or does not address the rampant corruption that allows a person to pay police to bring charges and a court to prosecute them the country's economic reform process will continue to be criticized by outside observers as lacking real substance. CORBIN