ALGERIA: 2008 SPECIAL 301 REVIEW

UNCLAS SECTION 01 OF 03 ALGIERS 000208 SIPDIS SIPDIS STATE FOR EEB/TPP/IP (BOGER) AND NEA/MAG (FLOWERS) STATE PASS FOR USTR (GROVES AND BURKHEAD) USDOC FOR ITA/MAC/OIP (PETERS),ITA/MAC/ONE (NATE MASON), ADVOCACY CENTER (REITZE) USDOC PASS FOR USPTO (ADAMS, BROWN AND MARSHALL) CASABLANCA FOR FCS (ORTIZ) CAIRO FOR FCS (MOEZIE) E.O. 12958: N/A TAGS: ECON ETRD KIPR AG SUBJECT: ALGERIA: 2008 SPECIAL 301 REVIEW REF: A. 07 ALGIERS 236 ¶B. 07 ALGIERS 999 ¶C. ALGIERS 190 ¶D. 07 ALGIERS 1327 ¶E. STATE 9475 ¶F. 07 ALGIERS 1581 ¶1. (SBU) SUMMARY: Since the 2003 enactment of TRIPs-compliant legislation, Algeria has demonstrated it is capable of active and prompt attention to intellectual property rights (IPR) disputes (ref B),but progress has been sporadic and inconsistent rather than systematic. Although some Algerian government agencies and ministries have begun to understand the importance of IPR protection, support for IPR has still not grown into a consensus. Algerian enforcement efforts led to an increased number of seizures in 2007, but pirated optical media and software and counterfeit goods remain widely available. In addition, there has been no progress on U.S. pharmaceutical companies' concerns with data exclusivity, patent protection, or Algerian policies that favor generic products. In our view, Algeria warrants inclusion on the Special 301 Watch List, but we note that placement on the list may not significantly alter Algerian enforcement efforts. We believe that WTO accession negotiations continue to provide the best forum to address weak enforcement and ongoing pharmaceutical company concerns. END SUMMARY. MIXED MESSAGE ON IPR -------------- ¶2. (SBU) Although some Algerian government agencies and ministries have begun to understand the importance of IPR protection, support for IPR is still not widespread. Officials at the National Copyright Office (ONDA) state that IPR enforcement is a priority and that Algeria recognizes the importance of IPR protection to encourage greater international investment. The Algerian government has begun to employ enforcement, education and training as means to curb IPR violations in both the public and private sectors. Government officials from ONDA, the national patent office (INAPI) and the Ministry of Justice, in particular, have been active participants in USPTO training programs. However, pharmaceutical companies and the Embassy itself have had difficulty in generating a sustained dialogue with the Ministry of Health on ongoing IPR protection issues. In addition, ICT companies such as Microsoft note that the estimated rate of software piracy increased slightly in 2007 due to the lack of serious enforcement or engagement from the Ministry of Communication (ref C). COMPLIANCE WITH TRIPS AND OTHER INTERNATIONAL AGREEMENTS -------------- -------------- ¶3. (U) Algeria made significant legislative progress for IPR protection with the 2003 adoption of modernized IPR laws and subsequent reinforcing legislation in 2004 to comply with the TRIPs agreement as part of Algeria's WTO accession process. In 2005, the Algerian government adopted new implementing regulations related to copyrights, patents, trademarks and integrated circuits. Algeria is also a signatory to several international agremeents such as the Bern and Paris Conventions. Pharmaceutical companies note, however, that Algerian law does not explicitly protect data exclusivity. While the legislative base is strong, implementation and enforcement of these laws and their ensuing regulations have met significant obstacles. ENFORCEMENT -------------- ¶4. (SBU) Enforcement of Algeria's generally sound legislative ALGIERS 00000208 002 OF 003 framework remains the significant weakness in IPR protection. ONDA reports seizing 289,000 articles in 2007, up from 195,000 in 2006. The Ministry of Justice reported that 76 cases were brought before the courts in 2007, resulting in prison time for several of the defendants. In 2007, an ad hoc interagency committee on IPR protection was formed with participation from ONDA, Customs, the Ministry of Justice and other government stakeholders. The formalization of this interagency committee should facilitate enforcement efforts and enhance cooperation, but absent strong political will from all agencies, enforcement efforts are likely to remain limited. The Ministry of Commerce's Market Control Division underscored that given the number of government agencies involved, coordination must be improved and formalized in order to improve enforcement. OPTICAL MEDIA AND SOFTWARE PIRACY RAMPANT -------------- ¶5. (SBU) Optical media and software piracy in Algeria remains widespread. Pirated optical discs are readily available in both retail establishments and in street markets. According to the latest Business Software Alliance survey, the rate of software piracy is estimated at 85 percent, a slight increase from 84 percent in 2006. In 2005, the Algerian government required government agencies to use registered software. As a result of the law, the number of registered programs jumped from zero to 10,000 in four months. Nevertheless, government use of unlicensed software continues and Algerian enforcement of software licensing remains limited at best (ref C). COUNTERFEIT GOODS -------------- ¶6. (U) Counterfeit products remain widely available throughout Algeria, with some of our business lawyer contacts speculating that the variety of counterfeit goods has actually increased during the past year. The latest government survey showed that 50 percent of car parts, 30 percent of cosmetics, 30 percent of clothes, and 12 percent of electronic goods in the Algerian market are counterfeit. The Ministry of Commerce noted that it does not have accurate statistics regarding counterfeit products or their origin. In 2006, the Ministry of Commerce estimated that roughly 60 percent of counterfeit goods were imported, with the remaining 40 percent made locally. China represents the leading source of imported counterfeit goods, followed by the UAE, Turkey and Italy. PHARMACEUTICALS -------------- ¶7. (SBU) Foreign pharmaceuticals firms have ongoing concerns with IPR protection in Algeria and report no progress in ¶2007. With regard to Algeria's TRIPs obligations, Algeria made some progress by canceling "Instruction Number Five," which was intended to stop the importation of pharmaceutical products that were locally produced to encourage domestic production. However, the Ministry of Health continues to encourage generic production by registering generic pharmaceuticals and licensing generic imports. Pharmaceutical companies operating in Algeria note that the government provides reimbursement only up to the value of a product's generic equivalent, providing a disincentive to use brand-name products. Pharmaceutical products patented in their country of origin prior to 2003 are not currently afforded patent protection in Algeria; therefore, pharmaceutical companies have no recourse before the judicial system. Pharmaceutical companies also note that current laws do not include data exclusivity protection. During EEB PDAS Elizabeth Dibble's September 2007 meeting with Minister of Health Amar Tou, Tou defended the Algeria's generic policy ALGIERS 00000208 003 OF 003 and was not responsive to U.S. pharmaceutical data exclusivity concerns (ref D). In an effort to improve dialogue with the Ministry of Health, a group of foreign pharmaceutical companies, including U.S. companies such as Pfizer, requested authorization to form an association. Algerian government authorization is still pending. COMMENT -------------- ¶8. (SBU) Despite a solid legislative framework for IPR protection, Algerian enforcement efforts have been sporadic and IPR infringement may even have increased in the case of software and counterfeit products. U.S. companies in the pharmaceutical and ICT sectors not only report significant monetary losses, but also a lack of serious engagement by the concerned ministries. We believe that these factors warrant placement of Algeria on the Special 301 Watch List. Although we recommend listing Algeria, we note that placing Algeria on the list may not have a significant impact on Algeria's enforcement of IPR. Algeria's WTO accession negotiations continue to present the best forum to address weaknesses in its IPR protection regime. FORD