MONTERREY STEPPING UP EFFORTS TO COMBAT PIRACY -- BUT IT'S

UNCLAS SECTION 01 OF 02 MONTERREY 000336

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TAGS: KIPR ECON ETRD MX
SUBJECT: MONTERREY STEPPING UP EFFORTS TO COMBAT PIRACY -- BUT IT'S
AN UPHILL BATTLE

REF: A) 2007 MONTERREY 603, B) MEXICO 1533

MONTERREY 00000336 001.2 OF 002



1. (U) Summary: The Nuevo Leon Attorney General's Office is
turning the heat up on vendors of pirated and counterfeit goods
with 176 raids and nearly 5 million seized goods within the
first three months of the year. The PGR's target for 2008 is to
seize 18 million of these goods, a 56% increase over 2007.
However, the focus remains on seizing goods and targeting street
vendors rather than shutting down illicit markets or going after
the owners of these establishments. In addition, a complacent
public and inadequate federal laws continue to make combating
intellectual and industrial property rights difficult, although
some legal reforms have been proposed. End Summary.




2. (U) In December 2007, post hosted an Intellectual
Property Rights (IPR) conference in Monterrey in conjunction
with Embassy Mexico. The Conference, entitled "Effective
Cooperation for Combating Intellectual Property Violations," was
attended by over 50 participants from different parts of Mexico
representing different levels and branches of government and the
private sector. The three-day conference included sessions on
how to apply the Mexican penal system to Intellectual Property
(IP),how to conduct a successful IP criminal investigation, and
examples of federal-state-local cooperation on IP issues.




3. (SBU) Following the conference, EconOff met with two
agents from Nuevo Leon's PGR (Attorney General's Office) who
attended the event to assess the impact of the conference.
Victor Cabrera Medrano, sub-delegate, and Alfdav Tellez Lopez,
Federal Public Ministry Agent, presented their agency's
ambitious anti-piracy plan for 2008. Among the general
strategies included in the plan are: coordination among the
three branches of government; establishing direct links between
the authorities and right holders to receive complaints and
collaborate on developing anti-piracy strategies; reorganizing
to better manage institutional resources; training personnel;
and intensifying actions against piracy. The agency seems to be
concentrating its greatest efforts in the final goal by
increasing the number of raids and seizure of pirated and
counterfeit goods. Last year, the PGR seized 10 million of
these goods. Their goal for 2008 is to seize 1.5 million goods
per month, for a total of 18 million in 2008. So far, they are
surpassing this goal, having seized 5 million such goods in the
first three months of the year through 176 raids and operations.
In April, an operation involving the raid of four vending posts
in one location resulted in the confiscation of 2,725 pirated
XBOX games, as well as the detention of the four vendors. The
agents also reported they are going after more labs where these
goods are reproduced, primarily CD/DVDs. The majority of these
products come from Mexico City as a master copy which is then
mass produced in illicit labs. To date, the PGR has raided at
least 3 labs in Monterrey, as opposed to about 5 last year.
According to the PGR, the seized goods are subsequently
incinerated.




4. (U) Despite the increase in raids and seizures, no
markets have been shut down, although many flea markets openly
specialize in pirated goods, leaving vendors to set up shop
again. Also, authorities rarely go after the big fish, namely
the owners of the locations selling pirated and counterfeit
goods. However, existing federal laws and the judicial process
make such actions very difficult. One of the PGR agents noted
that judicial proceedings against IPR violators usually takes 6
months to a year, but could be as much as 3-10 years in the
worst cases. Also, in order for the PGR to conduct raids and
seizures, they must have a formal complaint from a private
company that a specific vendor or location is violating its
intellectual or industrial property rights (Reftel A). This
could change in the near future thanks to a proposed reform that
allows authorities to go after pirates and counterfeiters
without such a complaint. This proposal has already passed the
Chamber of Deputies, but still needs Senate approval. In
addition, an IPR judicial court has been proposed and was also
passed by the Chamber of Deputies. If approved by the Senate, a
new court with three judges would be created dedicated to
reviewing intellectual property and author's rights. By creating
a separate court, the federal government hopes to shorten the
judicial process for IPR cases and make them less costly (Reftel
B).




5. (U) Complacent public attitudes towards IPR and the

MONTERREY 00000336 002.2 OF 002


purchase of pirated goods also continue to make combating piracy
very difficult. A piracy survey conducted by Mexico's American
Chamber of Commerce (AmCham) revealed the high level of pirated
goods available to the public and people's willingness to buy
them. The survey was conducted in Mexico City, Guadalajara and
Monterrey in September 2007 and indicated that Monterrey has an
even greater piracy problem than the other two cities. For
example, 42% of Monterrey respondents perceived the purchase of
pirated goods as a way to obtain goods of similar quality for a
better price, rather than as an illegal act, compared to 30% in
Guadalajara and 22% in Mexico City. The number of respondents
indicating they had purchased a pirated good was also higher in
Monterrey (96%) versus Mexico City (90%) and Guadalajara (86%).
Finally, prices for nearly all types of pirated goods, with the
exception of CD/DVDs, were considerably lower in Monterrey.




6. (SBU) Comment: Although the PGR's stepped-up efforts
might be dealing some blows to some pirates and counterfeiters,
they are hardly enough to stop the massive flow of pirated
goods. The proposed laws, if they are passed, would certainly
help, but more such reforms will be needed, as well as greater
resources for authorities to enforce the law. However, as the
AmCham survey reveals, changing the public's attitudes and
purchasing behavior may be an even bigger uphill battle than
reforming the laws or enforcing existing ones. End Comment.
WILLIAMSON