SPECIAL 301 LAO PDR 2007: GOL PLEASED WITH DESIGNATION BUT

UNCLAS SECTION 01 OF 03 VIENTIANE 000361 SIPDIS SIPDIS DEPARTMENT FOR EAP/MLS DEPARTMENT FOR EB/TPP/IPE DEPARTMENT PLEASE PASS TO USTR (BISBEE) DEPARTMENT PLEASE PASS TO USAID DEPARTMENT PLEASE PASS TO USPTO BANGKOK ALSO FOR USAID -- SKIP KISSINGER USPACOM FOR POLAD E.O. 12958: N/A TAGS: ECON ETRD EAID KIPR LA SUBJECT: SPECIAL 301 LAO PDR 2007: GOL PLEASED WITH DESIGNATION BUT PLEDGES TO STRENGTHEN IPR REGIME REF: (A) State 56402, (B) Vientiane 143 (C) Vientiane 351 ¶1. Summary: Nheune Sisavad, a senior Lao official who oversees intellectual property issues, expressed relief to the DCM that Laos is not on any Special 301 lists but said that it is important for Laos to strengthen its intellectual property rights (IPR) regime. He said that the National Assembly has taken "too much time" considering the intellectual property law. The Commerce Minister has asked the Deputy Prime Minister to instruct the National Assembly to get moving on the law. Mr. Nheune is also working on a copyright and trademark decree that would fall under the umbrella IPR law along with an existing patent decree. Mr. Nheune said that the government has been cracking down on industrial design infringement in the motorcycle industry, which particularly affects Honda. Police have cracked down on pirated CD's in Luang Prabang; Vientiane is next. Mr. Nheune expressed appreciation for USG-provided training on IPR issues and said he looked forward to an upcoming embassy-hosted training session on IPR issues. ¶2. On April 27, the Ambassador informed Khemmani Pholsena, Director General in the Foreign Trade Relations Department at the Ministry of Industry and Commerce that Laos was not on the 301 list. At an April 30 meeting on another subject (ref C),Committee on Planning and Investment President Soulivong told the Ambassador that Laos aims to join the WTO in or before 2010 and expressed his own view that any attempt to enter before 2010 would be overly ambitious. The Ambassador said that U.S. views on Laos' accession will depend on how fully Laos implements the U.S.-Lao Bilateral Trade Agreement. End summary. Meeting with STEA Director General -------------- ¶3. The DCM met with Nheune Sisavad April 30 to inform him that Laos has not been listed on any of the Special 301 lists (ref A). Mr. Nheune is Director General of the Department of Intellectual Property, Standardization and Metrology at the Science, Technology, and Environment Agency (STEA),a ministerial-level department within the Prime Minister's office. Mr. Nheune was relieved to hear this news but said that he recognizes that Laos must intensify its efforts to strengthen its intellectual property rights (IPR) regime, which, he noted, is a requirement for accession to the World Trade Organization (WTO). He expressed concern that pirating operations in China could shift to Laos if authorities crack down there and Laos does not strengthen its own protections. The DCM said that the USG shares this concern. ¶4. Mr. Nheune said that Laos has taken "too much time" to pass an intellectual property law. The National Assembly has had the government's draft intellectual property law since 2005. The National Assembly's economic committee only submits one or two economic laws for consideration during each of the two two-week sessions the legislature holds each year. So far, it has not made the intellectual property law a priority. He said that Minister of Commerce Nam Viyaket recently wrote a letter to Deputy Prime Minister Somsavat Lengsavad asking him to "knock on the door" of the National Assembly and ask them to make passage of the law their first priority. ¶5. Mr. Nheune said that the government's decree on patents, petty patents, and industrial designs, issued on January 17, 2002, provides protection in these areas but noted that Laos still lacks a legal instrument to protect copyrights and trademarks. The draft IPR law will cover all areas of IPR, with decrees, including the existing patents decree and future decrees on copyrights and other areas covering specific areas in more detail. He said that STEA will submit the copyright decree by the end of this year and will forward it to the World Intellectual Property Organization (WIPO) for approval. It will include protections for composers, which he noted is a requirement of the Berne Convention. It will also cover satellite transmissions. He said that Laos is considering adhering to the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations. Asked what sources STEA has used in drafting the IPR law, he said that he has mostly drawn from what he learned in a WIPO course in Geneva and another course he attended in France. ¶6. Mr. Nheune said that he had gone to Vientiane's Morning Market and Evening Market over the weekend to monitor the sale of CD's and DVD's. He warned vendors that selling pirated discs is illegal. They seemed to be aware of this already, suggesting that recent crackdowns by the police have had an effect. He said that he was VIENTIANE 00000361 002 OF 003 going to meet with officials from the Vientiane Municipality about this issue immediately after his meeting with the DCM. Officials have already taken action in Luang Prabang, a World Heritage Site and popular tourist destination, implementing a 200,000 kip fine (about $20 U.S.) for pirated CD's and DVD's. As a result, they have disappeared from the markets there. Addressing the problem in Vientiane is the next step. ¶7. The government has also been cracking down on pirating of industrial designs and trademarks, Mr. Nheune said. He has organized meetings in every district in Vientiane with traders, who are mostly Chinese, about widespread pirating of Honda designs by Chinese motorcycle manufacturers. (Note: Motorcycles are the main form of transportation in Vientiane, and Hondas are considered much more desirable than inexpensive Chinese motorcycles. End note.) Mr. Nheune has warned the traders that if they do not stop these activities, they will face criminal sanctions, including a possible three-year jail term. This campaign appears to have been successful. ¶8. Mr. Nheune said that the local Korean light vehicle manufacturer Kolao has also used Honda designs illegally. The Vientiane municipality seized 30 motorcycles, which remain in its custody. Mr. Nheune said that there have been 30 trademark and industrial design cases settled through administrative procedures as well as one court case. A less serious problem related to motorcycles is that young people are buying stickers produced in Thailand with the brand names of prestigious motorcycle manufacturers, which they use to cover up the real brand name. The solution for this is public education, he said. He is organizing TV programming on this issue. ¶9. Mr. Nheune expressed appreciation for USG assistance on intellectual property issues. He said that USPTO Senior Counsel Peter Fowler has been particularly helpful. A seminar by Professor Justin Hughes, director of the intellectual property law program, was also very useful. He said that over 70 participants from the public and private sectors would attend an EU workshop the week of May 7 as part of EU-ASEAN cooperation on IPR. The DCM told Mr. Nheune that the Embassy was planning to bring the Regional Intellectual Property Attach at the U.S. Patent and Trademark Office at Embassy Bangkok to Vientiane in late May to conduct training for Lao officials on intellectual property issues. Mr. Nheune welcomed this opportunity. Discussions with Commerce and CPI Officials -------------- ¶10. On April 27, the Ambassador saw Khemmani Pholsena, Director General in the Foreign Trade Relations Department at the Ministry of Industry and Commerce, at a reception and told her that Laos was not on the 301 list. Ms. Khemmani asked the Ambassador about how Laos would be viewed in terms of WTO accession -- would it be treated similarly to Vietnam or would it receive more concessional treatment? The Ambassador said that it was her understanding that Laos would receive the most lenient possible treatment. ¶11. CPI President Soulivong Daravong told the Ambassador during an April 30 meeting that Laos planned to apply to enter the WTO in or before 2010, commenting that any attempt to enter before 2010 would be overly ambitious. The Ambassador noted that the GOL's performance in carrying out elements of the Bilateral Trade Agreement (which came into effect in 2005) would be a significant factor with regard to how the U.S. would view the GOL's WTO application. Soulivong accepted that Laos has a problem with illegal CDs being sold in the marketplace, although these are not produced in Laos. However, responding to the Ambassador's concern that Laos might be a haven for illegal producers in the future, Soulivong said that it would be hard for illegal producers to relocate to Laos if other countries in the region were to step up anti-IPR enforcement, because these neighbors have a greater ability to protect their borders. The current GOL problem is the inability to protect Lao borders from the influx of illegal products. Still, Soulivong said the GOL is doing its best. The Ambassador offered to help provide technical assistance especially with monitoring Laos' long borders. Comment -------------- ¶12. As we have noted before (ref B),STEA has a talented staff with a genuine commitment to strengthening Laos's IPR regime. CPI and VIENTIANE 00000361 003 OF 003 Commerce share this commitment. As in many other areas in Laos, the biggest problem is on the enforcement side. It was encouraging to hear from Mr. Nheune that law enforcement officials have taken some steps to crack down on IPR violations. With WTO accession at stake, the government may have sent word to the police that it is time to start cracking down. HASLACH