PAKISTAN OCR REVIEW RECOMMENDATIONS

UNCLAS SECTION 01 OF 02 ISLAMABAD 005103

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON EINV PREL PK
SUBJECT: PAKISTAN OCR REVIEW RECOMMENDATIONS

REF: A. Islamabad 0836, B. Islamabad 1091, C. Islamabad 1836, D.
Islamabad 1916, E. Islamabad 2577, F. Islamabad 2966, G.
Islamabad 3462, H. Islamabad 3714, I. Islamabad 4891


1. (SBU) Summary: Embassy Islamabad recommends that Pakistan
remain on the Watch List (WL) at the conclusion of the current
Special 301 Out-of-Cycle Review. While Pakistan has yet to live up
to its commitment to enact TRIPS-consistent data protection
legislation, we believe that it should remain on the Watch List
until we can see the final results of the amendment, which is due to
be finalized before the end of the year. Despite some raids this
fall, we continue to push the Government of Pakistan (GOP) to make
more progress on prosecution and sentencing for arrested pirates.
The inclusion of IPR in the Strategic and Economic Dialogues this
fall has elevated the issue within the GOP, which we hope, over
time, will help make the Intellectual Property Organization (IPO) an
effective institution. There have been some improvements in
enforcement capacity, notably at the Federal Investigative Agency
(FIA). With the exception of progress on data protection, the IPR
situation in Pakistan remains largely unchanged from the spring 2007
Special 301 review. End summary.

Data Protection
--------------


2. (SBU) Pakistan promised to enact TRIPS-consistent data
protection legislation in 2006. The GOP is sprinting to the finish
line on data protection, with the amendment to the 1976 Drugs Act
anticipated by the end of the year. GOP officials at the Health and
Commerce Ministries are well aware of the importance of enacting
TRIPS-consistent data protection legislation to the outcome of the
Out-of-Cycle and Special 301 reviews.


3. (SBU) Progress was been slow until mid-September, when this
issue was raised at the Strategic Dialogue, chaired by Deputy
Secretary of State Negroponte. Then State Department Deputy

SIPDIS
Assistant Secretary of Economic, Energy and Business Affairs Chris
Moore also raised the data protection issue during the economic
growth breakout session and during his bilateral meetings.
Following these meetings, the Ministry of Health has been more
forthcoming in sharing the draft legislation with both the USG and
local stakeholders, and has held two meetings with the Pakistani
pharmaceutical sector. The U.S. pharmaceutical companies have been
pleased with progress to date.


4. (SBU) The Ministry of Health expects President Musharraf to sign
an ordinance amending the 1976 Drugs Law before the end of the year.
However, we are not confident that this ordinance will be
TRIPS-consistent, despite Embassy representations to senior
officials at the Health Ministry, Ministry of Law, Higher Education
Commission (which has an interest due to agricultural projects which
produce intellectual property),IPO, and the Ministry of Commerce.
IPO initially attempted to distance itself from data protection
legislation, arguing that it was the responsibility of the Ministry
of Health. We have engaged in an educational process to explain the
benefits to Pakistan's economy of data protection, and IPO appears
to understand the importance of data protection for growth and
innovating and is no longer distancing itself from Pakistan's WTO
commitments.


5. (SBU) Pakistan's foreign pharmaceutical companies believe that
imperfect data protection is better than none at all, and are
reassured that they will have additional opportunities to strengthen
data protection through the issuance of implementing regulations and
renewal of the ordinance every four months. An ordinance may be
amended prior to renewal. We understand that negotiations with the
foreign and domestic (generic) stakeholders continue to be
difficult. The domestic companies wield considerable political
power and maintain that data protection is already sufficiently
covered in existing Pakistani legislation.

IPO ineffective
--------------


6. (SBU) The IPO has been increasingly ineffective over the past
six months, despite the Embassy's efforts to include senior IPO
management in training, organization of awareness seminars and other
activities. The Board of Directors has not met for over a year, but
we hope that a new Chairperson (the third since 2005) and Deputy
Director will breathe new life into the organization, which
continues to cite past achievements. IPO has not pushed for
institution of a patent linkage system

Progress on enforcement capacity building
--------------


7. (SBU) The Federal Investigative Agency (FIA) has been very

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proactive in developing their IPR crimes investigation capabilities
over the past year, but has yet to reap results. FIA has set up IPR
enforcement units in Islamabad, Lahore, Karachi and Rawalpindi, and
hired a dedicated Director to oversee the four offices. FIA has
aggressively pursued international training opportunities; most of
the unit attended a U.S. Embassy organized program on Cyber Crimes
Investigations with the FBI, Microsoft, and IFPI in mid-August.


8. (SBU) The FIA reports that it has conducted four raids on
factories since the training that produced Hindi content cassettes.
Although there has been some progress made in enforcement over the
past year, the FIA has not conducted raids at the level it once did
in 2005. In 2007, 8 arrests were made, and 173,150 CDs/DVDs seized.
Laws are weak compared to the will of the FIA and lack of concern in
the judicial system eradicates the FIA's efforts.

Lack of prosecution and sentencing for pirates
-------------- -


9. (SBU) However, lack of prosecution and sentencing for pirates
continues to plague IPR protection and enforcement. FIA continues
to be frustrated that retailers still openly sell pirated optical
discs throughout Pakistan. Known counterfeiters are not brought to
justice because the laws currently in place do not give FIA and the
police the proper authority to arrest and prosecute IPR criminals.
The judicial system continues to see IPR cases as a minor offense
with no punishment more severe than those served to shoplifters, if
at all. Many who file complaints against IPR violators do not come
forward which makes prosecution increasingly difficult. IFPI has
been very complimentary regarding optical disk enforcement in
Pakistan, and have indicated in meetings with the former Prime
Minister and DCM its members' interest in investing in Pakistan.

IPR awareness low
--------------


10. (SBU) IPR awareness continues to be low among law enforcement
officials, the judiciary, and the general public. Law enforcement
officials and the judiciary question why IPR violations are a crime.
The Embassy is organizing its first IPR awareness seminars for
early 2008 in Islamabad, Lahore and Karachi in early 2008. IPO's
efforts in this area have been inadequate, and we believe that they
have not taken advantage of the international resources available,
instead concentrating their public outreach on conferences on book
publishing and TRIPS flexibility, rather than on sensitizing the
Pakistani public to the need for IP protection.


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


11. (SBU) Comment: We recommend that Pakistan remain on the Watch
List until we can see the outcome of the long-awaited data
protection amendment. If the amendment and/or its implementation
are not consistent with TRIPS, then the interagency committee should
revisit Pakistan's Special 301 status during the spring Special 301
regular review. We will continue to pursue opportunities to provide
training and increase IPR protection awareness among the general
public and GOP officials. We are hopeful that a new government
following the January 8 national elections will breathe new blood
into the IPO and continue to maintain FIA's momentum on increased
IPR enforcement. End comment.

PATTERSON