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

UNCLAS SECTION 01 OF 02 MONTERREY 000336 SIPDIS PLEASE PASS TO USPTO WAYNE PAUGH E.O. 12958: N/A 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