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

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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
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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

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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