BANDAR SERI BEGAWAN 2009 SPECIAL 301 REVIEW - RECOMMEND STATU

UNCLAS SECTION 01 OF 02 BANDAR SERI BEGAWAN 000040

SENSITIVE

SIPDIS

C O R R E C T E D COPY (SUBJECT LINE)

DEPARTMENT PASS FOR EAP/MTS/COPPOLAMG, EEB/TPP/IPE/URBANJ
STATE PASS TO USTR WEISELB, EHLERK, BAER
STATE PASS TO USPTO
STATE PASS TO COMMERCE
STATE PASS TO TREASURY
SINGAPORE FOR FINATT BAKERS
BANGKOK FOR FCS/NESSJ

E.O. 12958: N/A
TAGS: KIPR ECON ETRD EINV USTR WTRO BX

SUBJECT: BANDAR SERI BEGAWAN 2009 SPECIAL 301 REVIEW - RECOMMEND STATU
CHANGE

REF: A) STATE 8410
B) EHLER/COPPOLA/MCINTYRE EMAILS
C) 08 BANDAR SERI BEGAWAN 69

BANDAR SER 00000040 001.3 OF 002


SUMMARY
--------------

1. (SBU) In response to Ref A request, Post recommends changing
Brunei's current Special 301 status in 2009. After careful review of
the Government of Brunei (GoB) delayed Special 301 submission,
assessment of the International Intellectual Property Alliance
(IIPA) recommendations, discussions per Ref B, and assessing the
limited progress since the last 301 review (Ref C),post recommends
Brunei be placed on the Special 301 Watch List. Video and music
piracy dominate the entire, albeit small, commercial market.
While there has been limited progress, especially in enforcement
training and public awareness, the GoB has had limited success or
sustained programs to protect Intellectual Property Rights (IPR).
However, post recommends that a status review be conducted after six
months. End Summary.


SUFFICIENT TIME GIVEN, RECOMMEND STATUS CHANGE
-------------- ---

2. (SBU) As noted in Ref C, there has been repeated requests to give
Brunei extra time to assess its ability and will to enforce
Intellectual Property Rights (IPR). After three years, while there
has been some progress, it is limited and not sustained. Post
recommends that Brunei is placed on the Special 301 Watch List.
Brunei has been given sufficient time to take credible action. Post
does not/not believe placement on the Priority Watch List is
appropriate. In addition, post recommends a review of Brunei's
status after six months if there is improvement in IPR protection
and enforcement.

PIRACY DOMINATES DISC MARKET BUT SOME PROGRESS
-------------- -

3. (SBU) Video and music piracy dominates almost the entire
commercial market in Brunei. It is difficult, if not impossible, to
find a retail outlet that sells IPR protected digital or music
discs. Post does not believe Brunei is a major manufacturing hub
but is a destination point for pirated discs. While the disc market
is almost completely saturated with pirated goods, post has observed
some progress in enforcement against pirated computer software.
There have been police raids and seizure of pirated software.
Brunei's movie theaters prominently display anti-piracy/recording
warnings. In addition, there have been arrests made for the
smuggling of pirated discs. However, these arrests, mostly by
Customs officials, have been as a result of larger scale smuggling
operations which happened to include pirated discs.

COOPERATION AND TRAINING: NEXT STEPS
--------------

4. (SBU) As noted in Ref B and in the GoB's Special 301 submission,
there has been ongoing and sustained cooperation from Department,
Post, USTR, DHS-Customs, USPTO, FCS, and other USG agencies with the
GoB ministries. Training has been given to numerous GoB ministries
(Customs, National Police, Attorney General's Chambers (AGC)) on a
variety of topics, but especially focused on IPR enforcement. Ref C
noted that the GoB requested additional training. These requests
have and continue to be met. However, the training focus should
shift to case work and prosecution, in addition to more sustained
public awareness campaigns. While some ministries have demonstrated
a willingness to move forward on IPR protections, others have
demonstrated significant reluctance to take positive steps.

LEGAL FRAMEWORK AND RIGHTS HOLDERS
--------------

5. (SBU) Prosecution has been limited by requirements that rights
holders file complaints with the police and the AGC. In addition,
lack of in-country representation by rights holders has been noted
as a reason why the AGC and other GoB ministries have not been more
active in IPR enforcement. This assertion is countered by the few
companies who have in-country representation, file complaints, and
still do not receive adequate enforcement. In addition, as noted in
Ref C, there remains a justifiable concern that rights holders will
file complaints but no action will be taken. The AGC and other GoB
ministries also are legitimately concerned that they will move
forward with cases but not receive rights holders support. This lack
of trust by both parties can be addressed if there was more direct
and open communication. Department (EAP/MTS),Embassy, and USTR
have strongly urged the GoB to seek more direct contact and

BANDAR SER 00000040 002.3 OF 002


interactions with rights holders and various industry associations.
The GoB could make significant progress by simply talking with
industry representatives on a regular basis.

COMMENT: STATUS CHANGE NEEDED BUT PROGRESS CAN BE MADE
-------------- --------------

6. (SBU) There is no question that Brunei has been given ample time
and support from the USG to address IPR issues, most especially disc
piracy. To date, the progress has been limited. However, there is
recognition in Brunei that IPR can and must be addressed in a
sustained manner. The TransPacific Partnership (TPP) provides
another catalyst to encourage Brunei to move forward with increased
IPR protections. Senior GoB officials recognize this, however the
importance and political will to enforce IPR protections has not
permeated throughout the GoB. Post concurs with Department
assessment that a Special 301 Watch List placement could spur
further action. Brunei will make progress on IPR issues when the
highest levels of government and the business community fully
support enforcement. Post believes that once these decisions are
made, progress can and will be swift. If and when the demonstrated
progress is made, Post encourages a status review.


TODD