JUNE 2007 PRE-CANCUN IPR UPDATE

UNCLAS SECTION 01 OF 02 MEXICO 003297

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/MEX/ROTH AND EB/TPP/MTA/IPC/WALLACE
STATE PASS USTR FOR
EISSENSTAT/ESPINEL/MELLE/SHIGETOMI/BAE/MCCOY
STATE PASS COPYRIGHT OFFICE
COMMERCE FOR ITA/JACOBS/WORD/WILSON/WRIGHT/ISRAEL
COMMERCE PASS USPTO
JUSTICE FOR CCIPS/MERRIAM/KOUAME/GARLAND
DHS FOR CBP/RANDAZZO AND ICE/JLOZANO

E.O. 12958: N/A
TAGS: KIPR PINS ECON ETRD MX CH
SUBJECT: JUNE 2007 PRE-CANCUN IPR UPDATE

REF: (A) MEXICO 1678 (B) MEXICO 2219 (C) MEXICO 3266
(D) MEXICO 2852

SUMMARY
--------------


1. (SBU) President Calderon's National Development Plan
included a paragraph on the importance of IPR protection.
Calderon had IPR talking points for his meeting with Chinese
President Hu Jintao at the G-8, but told the press he didn't
have time to raise the issue. The Chairman of the lower
house Justice Committee said proposed amendments to make IPR
infringement a serious crime subject to ex-officio police
action were important, but he would not proffer an assessment
of its chance of passage in September. The movie and textile
industries report they have been working well on anti-piracy
initiatives with State of Mexico officials. GOM officials and
music and movie reps requested USG help in stopping the entry
of contraband blank discs into Mexico. The Attorney General's
Office (PGR) is ready to launch its IPR website, and says it
will focus on arrests and jail time more than confiscations
this year. The American Chamber of Commerce launched its IPR
Committee. The Embassy is working with Mexican Customs to
arrange an IPR training course in Veracruz later in the
summer. End summary.


2. (U) President Calderon publicly unveiled May 31 the
National Development Plan that is supposed to guide his
administration's work over the course of its six-year term.
The Plan is divided into five main themes, the first of which
is ensuring the rule of law and security. One of the
strategies under this heading is "protection of intellectual
property." The Plan describes the negative impact of piracy
on innovation and entrepreneurs and declares that national
laws and international obligations will be enforced in
Mexico, in particular by seizing merchandise and taking
preventive actions at the border to prevent the entry of
infringing goods.


3. (U) Calderon met with PRC President Hu Jintao June 7 on
the margins of the G-8 meetings held in Germany. After the
meeting, Calderon told reporters that he had intended to
raise Chinese infringement of Mexican intellectual property
rights but did not have time to raise the issue, due to the
intense focus at the G-8 meetings on climate change, global
imbalances, and financial market stability. The day before
the meeting, Jorge Amigo, the head of the Mexican Institute
of Industrial Property (roughly equivalent to the U.S. Patent
and trademark Office) had made headlines in Mexico by
claiming that famous Mexican brands like Corona beer are
routinely ripped off by Chinese counterfeiters.


4. (SBU) Chairman of the Chamber of Deputies' Justice
Commission Cesar Camacho told econoffs at a meeting on June 8
that he was well aware that the Senate had recently passed
amendments to federal copyright and industrial laws, as well
as the criminal code (ref B),that would make IPR
infringement a serious crime subject to ex-officio law
enforcement, as opposed to the current system under which
police authorities must first receive a formal complaint from
rightsholders before launching an investigation into an
alleged case of copyright piracy or trademark counterfeiting.
Camacho said many deputies had not yet had time to review
the bill, let alone consider possible amendments. He agreed
that it was an important issue, but would not guarantee that
it would be voted on in September nor would he be drawn out
on its chance of being passed unmodified by the Chamber of
Deputies. Camacho was unaware of a bill proposed (but not
acted on) in the previous Congress on implementing WIPO
Internet treaty obligations, but invited econoffs to be in
touch with his staff regarding both that issue and the
ex-officio amendments.


5. (U) At a bi-national meeting of the U.S. and Mexican film
industries (ref C) and the monthly public-private meeting of
the Inter-institutional Committee for the Protection of IPR
chaired by the Office of the Attorney General (PGR),

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representatives of the Motion Picture Association and Mexican
textile and apparel makers commented positively on the first
cooperative steps taken under the agreement that the State of
Mexico had entered into with a private sector coalition to
combat piracy and counterfeiting in Mexico's most populous
state. Though state law enforcement officials do not have
authority to pursue IPR cases (which are covered by federal
laws),they can make use of consumer protection rules and the
power to deny business licenses to close down vendors of
illicit goods. Apparently this is what State of Mexico
authorities have done in one particularly notorious market in
the state capital of Toluca. Industry has subsequently been
working with the government to re-populate the market with
vendors of cheap but legal products. The private sector has
signed an agreement with the municipality of Toluca and is
close to signing an agreement with the state of Morelos (just
south of Mexico City). Post plans to report on progress in
the State of Mexico and Municipality of Toluca in more detail
in a future telegram in the hopes that other states and
municipalities follow their lead.


6. (SBU) Felipe Munoz, PGR Deputy Attorney General for
Federal Crimes, invited econoffs to a meeting attended by
IMPI, Mexican Customs, and the film and music industries
regarding the illegal entry into Mexico of blank optical disc
media that is then used to burn pirated copies of movies,
music, and software. DVD-Rs made in Taiwan allegedly enter
Long Beach in-bond for transit to Mexico and then are shipped
to Tijuana and Laredo. Before crossing the border, they are
fraudulently re-labeled as "made in the USA" and thus avoid
paying Mexican tariffs. GOM officials requested USG
assistance in cracking down on this illegal practice north of
the border. Industry reps averred that by evading the
payment of the appropriate Mexican tariffs, the pirate
end-users of these discs reap a significant economic
advantage over legitimate vendors.


7. (SBU) At a subsequent meeting with Munoz, he previewed the
IPR website that PGR is poised to launch. The site contains
enforcement statistics, explanations of relevant laws, how to
initiate legal actions, a mailbox for suggestions and leads,
and links to a number of other relevant sites, including
IPR-related USG websites. At this meeting, Munoz assured
econoffs that PGR would focus more on arrests, convictions
and jail time than seizures.


8. (U) The American Chamber of Commerce launched its IPR
Committee on June 4. A mix of U.S. manufacturing,
pharmaceutical, software, film, and sports goods companies
participated in the first meeting, as did the President of
the AmCham, who promised full support for the Committee's
activities, and the head of IMPI's IPR protection division,
Gilda Gonzalez. The Committee agreed to form separate
working groups on: measuring the level of infringement in
Mexico; training Mexican officials; and public awareness.


9. (SBU) Econoffs are working with DOJ, CBP, and ICE to
organize a training for Mexican customs officials at the
major eastern seaport of Veracruz later this summer. In
addition to customs personnel, PGR and IMPI officials as well
as private sector reps would also participate. The proposed
date for this training is the week of July 23-27.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA