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

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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