PROJECT PROPOSAL FOR 2007 IPR ENFORCEMENT TRAINING

UNCLAS SECTION 01 OF 03 KYIV 001417

SIPDIS

SIPDIS

STATE FOR EUR/UMB AND EB/TPP/IPE
STATE PLEASE PASS TO USTR FOR LMOLNAR/JGROVES
USDOC FOR 4231/ITA/OEENIS/NISD - CLUCYCK
COMMERCE PLEASE PASS TO USPTO
MUMBAI FOR WKLEIN

E.O. 12958: DECL: N/A
TAGS: ETRD KIPR ECON EAID UP
SUBJECT: PROJECT PROPOSAL FOR 2007 IPR ENFORCEMENT TRAINING
FUNDS PROGRAM: CREATING A SUSTAINABLE UKRAINIAN IPR
TRAINING CAPABILITY

REF: A. STATE 55928


B. KYIV 449


1. Summary: Post proposes a project entitled "Creating a
Sustainable Ukrainian IPR Training Capability" to be funded
as part of the 2007 IPR Enforcement Training Funds Program.
Improving IPR enforcement in Ukraine remains a serious USG
priority. Since 2004 there has been progress toward good
governance in Ukraine, and the GOU has demonstrated the
political will to take IPR enforcement seriously. The GOU
would be a stakeholder in the proposed project and
therefore would be committed to its realization. Our
project would build on recent USG assistance efforts aimed
at improving the GOU's capacity to provide IPR enforcement
training and to strengthen its information technology and
forensic capabilities. The project would enable Ukraine to
extend training opportunities to officials on the local
level who rarely have access to discrete internationally
sponsored training programs abroad. End Summary

Project Description
--------------


2. For the 2007 IPR Enforcement Training Funds Program (ref
A),Post proposes conducting a technical assistance project
aimed at enhancing the Government of Ukraine's capacity to
train national and regional officials on the enforcement of
intellectual property rights (IPR). The Department of
Commerce's Commercial Law Development Program (CLDP) is
currently completing work on a comprehensive IPR training
manual in Ukrainian and English for officials of Ukraine's
State Department of Intellectual Property (SDIP). With its
current funding, CLDP will conduct a "train the trainer"
seminar for SDIP officials, with the goal of creating a
corps of Ukrainian IPR trainers who can then work with
other branches of the GOU.


3. Post's proposal is to bolster these efforts by funding a
series of five joint CLDP-SDIP follow-on training sessions
for key target audiences -- customs officials, law
enforcement, and judges. CLDP would be the implementer of
the project, organizing the follow-on training sessions in
cooperation with SDIP. CLDP would include U.S. and other
foreign experts to enhance the effectiveness of the
training sessions. During the sessions, SDIP officials
would begin training Ukrainian officials themselves, with
oversight and critique by CLDP. Post's proposal would both
train approximately 125 Ukrainian officials directly
involved in IPR enforcement, and develop the SDIP training
corps.

Estimated Budget
--------------


4. Total: $125,000

Based on previous CLDP budgets, Post estimates that
conducting each of the five training sessions would cost
$25,000. Here is an estimated breakdown of costs:
-- Training materials for participants: $3,000
-- Simultaneous interpretation: $3,000
-- Meals, Coffee breaks, etc: $5,000
-- Miscellaneous: badges, notebooks, pens, etc.: $1,000
-- Travel, per diem, and lodging for foreign experts:
$7,000
-- Travel for Ukrainian officials: $2,000
-- Conference Room (if necessary): $4,000

Improving IPR Enforcement in Ukraine is a USG Priority
-------------- --------------


5. Between 2002 and 2005, prior to a January 2006 Special
301 Out-of-Cycle Review by the Office of the U.S. Trade
Representative (USTR),Ukraine was the only country in the
world on USTR's list of Priority Foreign Countries for its
shortcomings in protecting intellectual property rights.
IPR enforcement remains a serious concern, and in 2007
Ukraine remained on the Special 301 Priority Watch List
among the countries of most concern to the USG. U.S.
industry reports losses in the hundreds of millions of
dollars due to IPR infringement in Ukraine. In addition,
weak IPR enforcement enables trans-border smuggling and

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other illegal operations, directed in some cases by
organized criminal (OC) groups. Industry groups report
that almost all production of counterfeit and copyrighted
goods in Ukraine has ceased, and Ukraine is now a major
destination and transshipment point for illicit traders,
who are often directed by OC groups.

GOU Has Political Will to Tackle Problem
--------------


6. Since the transformational impact on governance of the
2004 "Orange Revolution," Ukraine has demonstrated the
political will to improve its IPR regime, most notably
through the passage of critical Optical Disk Legislation in

2005. As recently as May of this year, Ukraine has made
additional, important legal changes as part of its
commitment to join the WTO as soon as possible. There has
also been a significant increase in the number of arrests
and convictions for IPR-related crimes (ref B). The
Ministry of Internal Affairs reported that there were 812
IPR-related criminal investigations in 2006, up 68% from

2005. Of these cases, 462 went to court (up 235% from
2005),and 115 led to convictions (up 311% from 2005).
Statistics from early 2007 indicate continuing progress.
The GOU meets regularly to review IPR enforcement issues
with industry representatives and U.S. officials through
the Enforcement Cooperation Group, and Ukraine maintains a
similar dialogue with the European Union. SDIP, Ukraine's
lead agency for IPR issues, has demonstrated that it is
competent and committed to improving IPR protection in the
country.


7. Post has developed this proposal in consultation with
SDIP. SDIP officials themselves have identified the target
audience -- customs, law enforcement, and judges -- and
Post concurs with their assessment. SDIP has also pledged
to provide suitable locations for each of the sessions
(assuming its conference rooms will meet space
requirements),and to fully fund the involvement of its
training personnel. SDIP officials, including the
Department's Chairman Mykola Paladiy, have specifically
requested assistance in upgrading their own training
capability, and SDIP will therefore have a real sense of
ownership of this project.

Project Holds Real Opportunity for Success
--------------


8. The USG has invested substantial resources into
bolstering IPR protection in Ukraine. These efforts,
combined with the emergence of serious political will on
the Ukrainian side, have led to significant progress in
recent years. Ukraine now has the capacity to achieve
measurable success, as there exists a group of
knowledgeable officials within key national-level
institutions who are committed to combating IPR
infringement. The need is now to impart this IPR
experience and commitment to officials at the local levels,
and to be sure it is sustainable. This project provides
the best opportunity to take IPR enforcement in Ukraine to
that next level.


9. The project will also provide a more systematic approach
to improving IPR enforcement than a single training session
ever could. CLDP's training manual provides a good
framework with which GOU trainers can operate, and this
project would multiply its impact.

Project Meets Broader U.S. Foreign Policy Goals
-------------- --


10. Bolstering IPR protection is part of larger U.S.
objectives to improve the rule of law and to encourage
political and economic reform in the country. World-class
IPR enforcement is necessary for Ukraine to accede to the
WTO and to integrate with the Euro-Atlantic community --
both core U.S. foreign policy objectives for Ukraine.

Strong Project Oversight
--------------


11. CLDP has extensive experience in running IPR-related

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training sessions in the former Soviet Union, in particular
in Ukraine, and has the organizational capacity necessary
to do so. Post believes that CLDP is best placed to serve
as the project implementer. Post has consulted with CLDP
in developing this proposal.


12. CLDP would provide detailed accounting of the use of
all funds, just as it has done for past training seminars.
Post would also maintain oversight of the project, with an
Embassy representative attending some, if not all, of the
sessions. Post's Economic Officer responsible for trade
issues would also maintain a continual dialogue with CLDP
to monitor progress.


13. The most measurable benchmark to track the project's
progress would be the number of government officials
trained on IPR enforcement issues. Other important
benchmarks, although harder to calculate and/or to
attribute directly to the project, would include -- the
number of IPR-related arrests and convictions, the number
of IPR-infringing goods seized at the border, the number of
IPR-infringing goods destroyed or properly disposed of, and
the stiffness of sentencing for IPR-related convictions.

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