USTR Focuses on Broadcasting and Medicines

UNCLAS SECTION 01 OF 02 MANILA 003153

SIPDIS

SIPDIS
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STATE FOR EAP/MTS, EAP/EP, AND EB/IFD
DEPT FOR EB/IPC
STATE PASS USTR FOR DKATZ AND RBAE
STATE ALSO PASS USAID, OPIC, USDA
TREASURY FOR OASIA
USDOC FOR 4430/ITA/MAC
USDOC PASS USPTO
BANGKOK FOR FCS JENNIFER NESS
STATE ALSO PASS LOC

E.O. 12958: N/A
TAGS: KIPR ETRD ECON EINT RP
SUBJECT: USTR Focuses on Broadcasting and Medicines



1. (SBU) Summary. Director for Southeast Asia and Pacific Affairs
David Katz and Director of the Office of Innovation Rachel Bae, both
from the office of the U.S. Trade Representative, discussed
bilateral trade issues in Manila on September 3-4. The two major
issues discussed were cable television piracy and legislation on
pharmaceuticals. Moves are underway within the Philippine
government to reverse a decision by the Department of Justice that
commercial broadcasts do not have copyright protection. Legislation
on pharmaceutical prices is likely to pass congress given the
political climate in the run-up to the 2010 presidential campaign.
U.S. pharmaceutical interests have understood that they will need to
work to minimize damage, as they will not be able to defeat the
legislation a second time. End summary.

Defending Copyright for Broadcasters
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2. (SBU) Katz and Bae met John Medeiros, the executive director of
the Cable and Satellite Broadcasting Association of Asia. Medeiros
updated them on the status of an ongoing cable piracy case in
Cotabato City in Mindanao. The Department of Justice approved of
the filing of criminal copyright infringement cases against several
rural cable television systems for distributing content from
broadcasters without obtaining a license or paying royalties. The
operators successfully petitioned Secretary of Justice Raul Gonzalez
to rule that the Philippine Intellectual Property Code does not
grant copyright protection to broadcasters, opening the door to the
dismissal of the cases.


3. (SBU) Medeiros said the situation is deteriorating, with the
chair of the Federation of International Cable Television
Associations of the Philippines publicly urging cable companies not
to pay royalties to content providers. Medeiros noted that the
Association is facing pressure from member organizations to
publicize the case.


4. (SBU) EconCouns, Katz, and Bae raised the cable piracy issue with
Senior Undersecretary of Justice Ernesto Pineda. Pineda's staff had
already drafted a reversal of Gonzalez's statement, but it requires
the Secretary's signature to be effective. Pineda agreed to have
the Justice Department lawyers in Cotabato City object to efforts to
dismiss the cases on the basis of Gonzalez's decision. Post learned
subsequently that a September 4 hearing was postponed when the judge
in Cotabato City did not appear.

Twenty Cheaper Medicine Bills and Counting
--------------


5. (SBU) During the last Congress of 2004-2007, Senator Mar Roxas
proposed a bill to reduce the price of prescription drugs by
reducing the scope of patent protection for pharmaceuticals and
allowing parallel importation. In the newly-elected Congress,
around twenty such bills have been introduced, including Roxas'
bill. Many of these bills are similar to the Roxas bill. Others,
however, propose populist measures such as price controls on
prescription drugs and restrictions on the advertisement of
pharmaceuticals.


6. (SBU) Edwin Feist and Leo Wassmer of the Pharmaceutical and
Health Care Association of the Philippines argued that the Roxas
Bill has unacceptable provisions on parallel importation and
international patent exhaustion. While the drug industry favors a
less interventionist bill proposed by Rep. Ronaldo Zamora, Feist and
Wassmer acknowledged that if those sections were changed, the
industry could live with the Roxas legislation.


7. (SBU) Katz and Bae also met with Representatives Junie Cua, a
former chair of the Trade and Industry Committee and House sponsor
of the Roxas bill, and Antonio Alvarez, Cua's successor as chair.
They both believe that time needs to pass and passions cool before
Congress can consolidate all the bills into a single piece of
consensus legislation. Cua and Alvarez both see strong momentum
that suggests a pharmaceuticals bill will pass.

WIPO Internet Implementation
--------------


8. (SBU) Katz and Bae raised the need for legislation to implement

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the WIPO Internet Treaties, which the Philippines ratified in 2002.
Senator Edgardo Angara has introduced such legislation, though it
still lacks a sponsor in the House. Congressmen Cua and Alvarez
observed that once members of Congress understand that implementing
the Internet treaties sends a signal internationally, the bill will
pass. Cua added that Juan Angara, the senator's son, was elected to
the House in May and could potentially co-sponsor his father's bill.



9. (SBU) Val Palanca, a Trade and Industry Committee staffer,
pointed out that one sticking point was that a number of legislators
who follow internet issues are concerned with WIPO provisions that
potentially criminalize the temporary downloading of copyrighted
material into the random access memory of a computer. He warned
that a final Philippine bill may deal with this issue differently
than the WIPO Treaties.

Developments at the Optical Media Board
--------------


10. (SBU) Katz and Bae met with Eduardo Manzano, chairman of the
Optical Media Board. Manzano discussed efforts to make Board
licensing procedures more sophisticated by examining the supply and
sales contracts of license applicants and looking for
inconsistencies. He noted that the year's target for seizures has
already been met. His agents made 29 arrests during July and
August, and in addition to optical media piracy enforcement, have
begun to cooperate with the Philippine National Police to charge
under indecency laws those it has discovered trafficking in child
pornography.

The Intellectual Property Office
--------------


11. (SBU) Katz and Bae met with Intellectual Property Office
Director General Adrian Cristobal to review ongoing initiatives.
Cristobal said that he faced the challenge of tracking intellectual
property cases around the country, as his office continues to
struggle to obtain data. He believes the commonly cited figures of
550 active IPR cases in the Philippine court system and one IPR
conviction to date in 2007 are understated. In addition, these
figures exclude cases that are settled out of court, as most cases
are.

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


12. (SBU) A handful of issues will dominate the IPR dialogue for the
rest of the year. It is encouraging that the pharmaceutical
industry is finally giving serious thought to what it can accept in
pharmaceutical legislation. Both they and we will be fighting a
difficult battle to clean out bad provisions from the legislation as
it moves forward.


13. (SBU) The Secretary of Justice's decision that copyright laws
do not cover broadcasts is a bad precedent that endangers IPR
protection. We are encouraged that the Philippine government
understands it needs to set the matter straight and seems to be
moving toward reversing the decision.

KENNEY