MISSION BUENOS AIRES VIEWS ON ARGENTINA'S 2009 SPECIAL 301

UNCLAS BUENOS AIRES 000261 SIPDIS SENSITIVE DEPT FOR EB/TPP/IPE JENNIFER BOGER AND ROBERT WATTS DEPT PLS PASS TO USTR JENNIFER CHOE GROVES, KATHERINE DUCKWORTH DOC/ITA/MAC/OIPR FOR CATHERINE PETERS PLEASE PASS TO USPTO JURBAN AND LOC STEPP E.O. 12958: N/A TAGS: KIPR ETRD ECON AR SUBJECT: MISSION BUENOS AIRES VIEWS ON ARGENTINA'S 2009 SPECIAL 301 REVIEW REF: A. STATE 8410 ¶B. 08 BUENOS AIRES 231 ¶C. 08 BUENOS AIRES 336 -------------- Summary -------------- ¶1. (SBU) In 2008, Argentine authorities responsible for providing "adequate and effective protection to intellectual property rights" made few meaningful improvements in IPR legislation, regulation and enforcement, and there remain serious weaknesses in each of these areas. Multiple law enforcement actions within Argentina's most notorious illegal market and Customs authorities' increasingly successful implementation of a trademark fraud prevention program - seizures of imported falsified goods are up 1600% in the two years since the program began - were notable positive exceptions. On legislation, an amendment to the criminal code to increase fines for falsifying medication trademarks was a minor improvement, offset by an amendment which codified a de facto lack of patent enforcement for imports of pharmaceuticals. On patents, actual patent adjudications in 2008 dropped by 40% from prior year levels. The application backlog remains large, effectively curtailing the period of patent protection, and injunctive relief for patent infringement continues to be complex, slow and variably enforced. On the key issue of "data confidentiality," there has been no progress, with proprietary third-country pharmaceutical data routinely used by domestic competitors in violation of TRIPS Article 39.3. On copyrights, CD and DVD piracy remains prevalent and illegal internet downloading/distribution has continued to rise, according to industry sources. Trademark falsification remains widespread, with illegal markets poorly policed. Minimalist fines and penalties on non-medical products offer little deterrent to falsification. On the positive side, Customs authorities continued to exercise their trademark enforcement powers in 2008, seizing a significantly higher amount of counterfeit goods. While Argentine authorities have certainly taken some steps in the right direction, the overall lack of progress (and the unfortunate backwards movement on patent protection at the border) leads Embassy to recommend that Argentina remain on the Priority Watch List in 2009. End Summary. -------------- Patents -------------- ¶2. (SBU) After five years of progress in reducing its patent application backlog, Argentina's patent and trademark agency, the National Institute of Industrial Property (INPI),adjudicated fewer patent applications than it received in 2008. Patent applications fell 3% to 5,566 in 2008, while adjudications fell substantially, dropping just over 40% to 3,682. Representatives of U.S. pharmaceutical companies with operations in Argentina, based on their own experience and on their conversations with other multinational research-based pharmaceutical firms operating in Argentina, confirm that the decline in adjudications on their product applications has been notable. Despite the decline in adjudications, the patent application backlog fell, as over 3,200 applications were deemed "abandoned" by INPI. Graciela Adan, INPI's Coordinator of Institutional Relations, attributed the high volume of abandoned applications to the current economic crisis, claiming that applicants were choosing not to pay fees required at the time of an application's full investigation. Industry representatives instead attribute the increase in abandoned applications to an INPI "fast-track" process in which patent applicants were able in 2008 to reprioritize their applications which were pending consideration. (Note: While INPI declined to share their estimate of the current patent application backlog, local industry sources estimate it to be in the 23-24,000 range. End Note.) ¶3. (SBU) With the Argentine 15-year patent protection clock starting at the time of application rather than issuance, U.S. research-based pharmaceutical companies operating here complain that INPI's extended patent processing backlog effectively curtails their period of exclusive patent protection. For example, the majority of patents issued by INPI in the fourth quarter of 2007 had been applied for no later than in 2002, and applications for pharmaceutical and other chemical products take longer than average to process. INPI officials claim their efforts to accelerate patent application adjudication are hampered by budget constraints and the continuing challenge of maintaining adequate human resources, with trained examiners frequently hired away by the private sector and long in-house training periods required to bring newly hired examiners up to competence. ¶4. (SBU) The lack of local patent protection for many pharmaceutical products, coupled with Argentina's 300+% devaluation in 2002, which resulted in sharp price increases for imported products, increased incentives for local pharmaceutical companies to produce unlicensed copies of products patented elsewhere or for which local patents were pending. Despite high domestic inflation that raised local production costs over the past year, a currently depreciating peso and a GoA commitment to maintain local manufacturing jobs favor domestic pharmaceutical production. According to CAEMe (the Argentine Chamber of Medicinal Specialties, an association that represents U.S. and other research-based pharmaceutical companies),local pharmaceutical firms hold over 50 percent of the Argentine prescription and over-the-counter market as well as almost 50 percent of the export market. (Note: Research-based multinational pharmaceutical companies operating in Argentina do not perceive all local pharmaceutical firms as patent infringers. Some of the producers/exporters, according to CAEMe leadership and member company representatives, deal only in products which are either licensed or have expired patent protection, and therefore are legitimate generics. End Note.) Argentina amended its patent law (Law 24481) in December 2003 to implement an agreement between the USG and the GOA that had been signed in May ¶2002. That agreement came after approximately three years of consultations under the WTO's dispute settlement mechanism. ¶5. (SBU) The most important unresolved pharmaceutical patent issue remains the lack of effective "data protection" (i.e., the legal protection of confidential and proprietary data developed by pharmaceutical companies that demonstrates the efficacy and safety of new medicines). U.S. and other research-based pharmaceutical companies (as well as plant biotech firm Monsanto) believe this to be the most significant IPR challenge they face. Argentina and the U.S. have agreed to leave this issue within the WTO dispute settlement mechanism for future action. GoA policies have led research-based pharmaceutical companies to complain that Argentine health regulatory authorities (in particular ANMAT, the National Administration of Medicines, Food, and Medical Technology, the equivalent of the FDA) rely inappropriately on data developed by research-based companies and presented by companies which did not participate in such research to ANMAT to obtain marketing approval of unauthorized copies of innovative medicines. According to CAEMe, ANMAT interprets the public disclosure of partial data as an indicator that the data should be regarded as in the public domain. Article 39.3 of the TRIPS agreement requires WTO members to protect data submitted for pharmaceutical marketing approval "against unfair commercial use" and "disclosure." However, non-research-based companies need only present publicly-available information, such as an existing FDA approval of a product, rather than confidential portions of clinical studies results, to obtain marketing approval for their product. Therefore a non-research-based company can legally obtain permission to market potentially patent-infringing products. Ernesto Felicio, Executive Director of CAEMe, told Econoff in 2009 that "in practical terms, there is no protection of confidential data" in Argentina. Because of this lack of protection, a non-research-based company can obtain marketing approval of its products not only without a patent, but without proving either their safety or efficacy. ¶6. (SBU) U.S. pharmaceutical companies also remain concerned about the legal implications of two specific clauses in the 2003 amendment. Specifically, the amendment mandates an expert opinion, and requires consideration of the economic impact of an injunction on both parties to determine whether or not goods alleged to violate the patent law should be seized. When the amendment was passed into law, research-based pharmaceutical companies feared that those clauses could preclude the granting of preliminary injunctive relief and limit the success they have achieved in protecting their products through the use of preliminary injunctions. ¶7. (SBU) Those fears have been realized. In January 2007, Bristol-Myers Squibb (BMS) received a patent for a product already being produced without permission by competitors, a clear example of the lack of data protection. By February, BMS obtained a preliminary injunction blocking illegal copies of the product. The court cited TRIPS procedures as reasons for granting the injunction. However, in May 2007, the injunction was overturned on appeal. BMS was forced to file the case based not on TRIPS treaty obligations, but on Argentina's patent law alone. This process is much slower - while the initial injunction took barely a month, no court decision has been reached in over eighteen months since the appeal was initiated. Prior cases illustrate other weaknesses in the injunction process of the patent law. In 2005, Eli Lilly discovered several Argentine competitors selling copies of its lead oncological drug, and sought injunctions to prevent those sales. An injunction against one infringer was issued after an 18-month judicial process, but was later revoked when the infringer presented what it claimed was an alternate process to produce the medication (the patent is based on the process, not the molecule, as in the BMS case),without evidence that the process was in use, or that it even worked. For another infringer, the application for an injunction was rejected by a judge convinced by a local expert hired by the defense, who claimed that the copycat drug did not violate the U.S. pharmaceutical company's patent. Of the three known infringers of Eli Lilly's medication, two had already signed agreements in court not to produce copies, and proceeded - and still continue, in 2008 - to violate those agreements. In another instance, Merck Sharp and Dohme went to court in 2005 to remove five copies of one of its joint-venture drugs from the Argentine market. In a promising ruling, the judge issued injunctions ordering the copies off the market. More than 40 months after the decision, however, those injunctions have yet to be enforced - despite the fact that the judge in the case ruled the legal basis for the copy drug's approval unconstitutional, as well as in violation of TRIPS Article 39.3. (Note: the injunction ordered ANMAT to rescind marketing approval of the copied product, which ANMAT has not yet done. According to CAEMe, the only further legal recourse available to Merck would be to demand the arrest of those responsible for the GoA's failure to comply with the court order - the Director of ANMAT and/or the Minister of Health. Merck is unwilling to pursue this course of action. End Note.) ¶8. (SBU) A frequent complaint of U.S. pharmaceutical companies is that there remains in Argentina no regulatory linkage between INPI and ANMAT. Its absence in Argentina allows ANMAT to grant local pharmaceutical producers authorization to manufacture and sell products that have already been patented or for which a patent has been requested. The Embassy and multinational pharmaceutical companies have urged the GOA to establish a linkage between ANMAT and INPI that would prevent ANMAT from continuing to authorize local pharmaceuticals to produce products for which an INPI patent has been granted or is pending. While such linkage is not explicitly required by TRIPS, its implementation would provide a potential remedy for the lack of data protection. U.S. and other research-based pharmaceutical companies must incur the legal costs of obtaining injunctions to stop the production and sale of products produced by local pharmaceutical companies for which the research-based companies have Argentine patents. ¶9. (U) Law 25649 adopted in 2002 requires medical doctors to use a drug's generic name in all prescriptions. Doctors may also include a trademarked version of a drug (and no more than one) in their prescriptions, but pharmacists may still offer a substitute. If a medical doctor does not want a substitute provided, the reason must be indicated on the prescription. U.S. and other research-based pharmaceutical companies operating in Argentina believe this law diverts sales from innovative medicines to TRIPS-infringing copy products. Some of these firms argue that true generics do not exist in Argentina because copy products are not required to demonstrate their bioequivalence or bioavailability with original products, meaning local producers can sell drug copies that lack quality and safety assurances. ¶10. (SBU) Concerns have also been expressed by market players over criteria for patentability. U.S. biotech company Monsanto notes that INPI resolution 243/2003 precludes the issuance of patents for transgenic plants and animals, despite the fact that the patent law (Law 24481, a higher legal authority than a resolution) excludes from patentability only living material that is "pre-existing in nature." International pharmaceutical firms and CAEMe told Post that, late in 2007, INPI refused to grant patents for two new pharmaceutical products for "lack of an inventive step." The products were reformulations of previously patented medications (i.e., "evergreen" products),but such products had consistently received patents before. While one of those was approved by INPI in 2008 on appeal (the other remains pending),it appears that pressure has been applied on patent examiners to alter their adjudication standards. In early 2008, according to Felicio, then-Health Minister Gonzalez visited INPI, taking time to speak to pharmaceutical patent examiners individually to remind them of their "social responsibility" in helping to ensure access to medicines. ¶11. (SBU) Alfredo Chiaradia, the Secretary of Foreign Trade in the Foreign Ministry, sent the Customs Director a letter in April 2008 (copied to the Minister of Health and the Secretaries of Agriculture and Industry) expressing "concern" that discussions in World Customs Organization (WCO) meetings could lead to a decision to implement "TRIPS-plus" IP protection. The letter might have been prompted by pressure from the local pharmaceutical chamber, which wrote a similar letter (citing the same WCO working group) to the Customs Director two months later. ¶12. (U) Argentina has yet to become a contracting state to the World Intellectual Property Organization's (WIPO) Patent Cooperation Treaty. The WIPO treaty's mutual patent recognition provisions among 135 Contracting Parties would eliminate much of INPI's current patent application backlog, since the majority of patent applications are from foreign individuals and entities. -------------- Copyrights -------------- ¶13. (SBU) The incidence of Argentine copyright piracy via "traditional" CD and DVD copying does not appear to have declined in Argentina. The IIPA estimates that music piracy rate was 60% in 2008, the same level since 2005, and that business software piracy rose one percent to 75% in 2008. Industry groups estimate an increase in the frequency of illegal electronic downloads. The IIPA reports that total seizures of optical media were 3.2 million, down 30% from 4.6 million discs in 2007, but up 88% from 1.7 million in ¶2006. Customs alone seized over 1.5 million blank CDs and over 900 thousand blank DVDs (the DVDs were all part of a single shipment, which also had nearly a quarter million blank CDs) which had been imported as contraband. ¶14. (SBU) Optical Media Piracy: Problems in this area include the widespread and open sale of pirated copies of CDs and DVDs, and increasing number of businesses offering home delivery (often coordinated entirely online) of pirated artistic content. Argentina's copyright regime, largely based on the 1933 Copyright Act (as amended),provides generally good nominal protection, including authority for Customs to seize imported products which violate copyrights. However, the lack of any real enforcement (in current practice, pirates will likely - see para 21 for an exception - face jail time only if their involvement can also be defined as organized crime),coupled with the disincentive to purchase legitimate - but more expensive - imported products, has spurred piracy. A survey sponsored by the local American Chamber of Commerce in 2006 showed that, while more than half the population believes that piracy precludes job creation and facilitates tax evasion, two-thirds of Argentines have knowingly bought pirated products. A local attorney specializing in copyright issues told Econoff that, while the Argentine legal system does not function at a first-world level, it is "not bad for the region." The legal system will generally respond when needed to seize counterfeit media, the attorney said, but the existence of a personal relationship with relevant authorities is helpful. ¶15. (SBU) Illegal Downloads: Electronic delivery of copyright infringing materials is on the rise. CAPIF (the Argentine Chamber of Phonograph and Videograph Producers) estimates that 99% of all songs downloaded from the internet in 2006 and 2007 were downloaded illegally; over 600 million illegal songs were downloaded in Argentina in 2006, a nearly 50% increase from 2004. This growth is roughly in line with the significant increase in broadband internet access in Argentina. CAPIF has not repeated the study, but their Executive Director, Javier Delupi, claimed to Econoff that this number has only grown since 2006. In 2008, legal music downloads were 4.3% by value of total legal music sales in Argentina, with over 97% of that total coming from cellphone downloads, and the rest from internet sales. In 2008, thanks to CAPIF and the International Federation for the Phonographic Industry (IFPI),two major internet forum sites removed all known links to illegal, online music files. 24,000 messages offering such links were removed. According to CAPIF estimates, illegal internet downloads represent the largest portion of music piracy in Argentina. CAPIF is trying to organize a roundtable with internet service providers (ISPs) in Argentina in 2009 to discuss methods to reduce such downloads. ¶16. (U) Use/Procurement of Government Software: The GOA has yet to fully comply with its 1999 agreement with the local software industry to legalize unlicensed software used in some national government offices. In conversations with Econoff, GoA contacts in the Ministries of Economy and Planning estimate that over 90 percent of GoA agencies employing licensed software are using it illegally. ¶17. (U) Proposed Augmentation of Copyright Penalties: In 2007, motion picture and recording industry representatives proposed to Congress a modification of the criminal code to increase currently nominal criminal penalties and fines for copyright violations. The modification would also facilitate the destruction of pirated goods by providing discretion to the rights holder over disposition of infringing goods as well as make updates to the law to address modern technologies. While a draft bill proposing these changes was formally tabled for Senate consideration by sympathetic parliamentarians in 2007, no legislative action was taken on the bill by the end of 2008. As a result, the proposal would have to be resubmitted by parliamentarians in the current 2009 legislative session in order to be considered. -------------- Trademarks -------------- ¶18. (SBU) Industry sources agree that Argentina's 1982-era trademark law (Law 22362) generally meets international standards, but note that nominal fines have not proven significant deterrents to falsification. A number of amendments to the Penal Code over the past six years have limited penalties to probation periods and rendered it less effective. A former INPI head and other industry participants charge that these amendments render trademark protection inconsistent with WTO norms. They argue that existing remedies no longer meet TRIPS Article 61 requirements, which obligate members to adopt trademark laws which "include imprisonment and/or monetary fines sufficient to provide a deterrent" to counterfeiting. On a positive note, INPI has increased its efficiency in the process of renewing trademarks. However, while INPI trademark adjudication, like patent processing, sped up in recent years, it fell back in 2008. According to official INPI statistics, trademark applications (including renewals) increased 25% to 89,629 in 2008, but total adjudications (including over 8,500 abandoned) fell 12%, to 73,035. (Graciela Adan, INPI's Coordinator of Institutional Relations, argued that the adjudication total was similar to other previous years, though adjudications in 2008 were also 11% lower than in 2006 and 2.3% lower than in 2005.) Raids by local police on flea markets where counterfeit merchandise is openly sold have not been frequent or widespread enough to lessen the availability of pirated goods. Representatives of industries frequently targeted by counterfeiters claim that over forty large, well-established markets exist in Buenos Aires alone that are almost completely dedicated to the sale of counterfeit goods (in addition to innumerable smaller points of sale throughout the country). The largest of these markets, which is reputed to be the largest in South America, is called "La Salada." According to reports, 6,000 people work there, and up to 50,000 customers visit and make USD 9 million in purchases daily. (Note: The EU highlighted this market in its October 2006 301-equivalent report, which received considerable press attention in Argentina. End Note.) "La Salada" has a dangerous reputation, and post IPR contacts have told us that organized crime elements operate within the market. ¶19. (SBU) Amendments to Existing Legislation: Argentine trademark legislation had a minor, positive modification in 2008, which increased penalties for falsifying medications (i.e., violating a trademark, not a patent). Offenders previously faced a potential prison sentence, but now can also be fined 10,000 to 200,000 pesos (from approximately $3,000 to $57,000). Since penalties for trademark violations are typically probation (absent death or injury caused by the falsified medication),CAEMe leadership notes that the fines create at least some deterrent penalty in these cases. Numerous other proposals to augment trademark protection have not prospered, including one drafted by members of the American Chamber of Commerce in Argentina. While several proposals have been sponsored by various parliamentarians in the last few years, none has been progressed beyond the congressional committee review stage. ¶20. (SBU) A court case on counterfeiting has sent an inopportune signal about trademark protection in Argentina. In 2007, a judge in Tucuman province ruled that a vendor of counterfeit athletic shoes acted "in good faith" in part because he had legal invoices for his purchases. This decision came despite a reported agreement (presented as evidence in the case) between the vendor and the manufacturer, which acknowledged that the shoes were made with a copied trademark. The case was appealed by the trademark owner, and the appeals court overturned the decision in 2008. However, according to the trademark owner's attorneys, the case was sent back to the local court, where it ended without a conviction. -------------- Enforcement actions -------------- ¶21. (SBU) The most notable enforcement actions of 2008 were three raids conducted within notorious street fair "La Salada" (see para 18). These enforcement actions follow two 2007 raids which are thought to be the first such actions in "La Salada." Seized in the 2008 raids were a total of over 10 million copies of cover artwork (which would be inserted inside plastic cases of copied discs for sale),25 industrial disc-pressers, 115 disc-burners, and over 130,000 already-copied CDs and DVDs. Eight people were arrested in one raid. Many of the copied discs seized were "master" discs, so that purchasers could buy those and the copied cover artwork and make their own pirated CDs to sell. Econoff has been informed by Province of Buenos Aires tax authorities that a number of high-profile tax and IPR enforcement actions in the La Salada market are being planned for the 2009 calendar year. ¶22. (SBU) Another positive event was a conviction and 10-month prison sentence for a man caught selling pirated DVDs. The Motion Picture Association lawyer who initiated the case told the press that this was the first-ever prison sentence handed down in Argentina for pirating movies (two convicted music pirates received three- and five-month sentences in 2007, but convicted movie pirates had routinely received probation or a suspended sentence). In another notable enforcement action, a police official told press in November 2008 that a Mexican national arrested on charges of smuggling ephedrine in bulk was also "working in the production of pirated CDs and DVDs." The attorney also noted that the pirate had other criminal convictions, which may have contributed to the sentence he received. ¶23. (SBU) On the other hand, the Argentine Congress weakened potential patent enforcement on imported products by amending an existing law in December 2008. Law 25986, which was passed in December 2004, prohibited the import or export of merchandise which violates any intellectual property rights. The amendment codified a de facto lack of patent enforcement (as the law was never fully implemented) by explicitly limiting border enforcement to trademarks and copyrights. While the amendment appears consistent with TRIPS Article 51, which requires border measures to prevent "the importation of counterfeit trademark or pirated copyright goods," it appears non-compliant with TRIPS Article 28.1, which specifies that a patent shall allow its owner to "prevent third parties not having the owner's consent" from importing, as well as selling, that product. ¶24. (SBU) In October 2006, AFIP (the Federal Administration of Public Revenue, an IRS-equivalent and with authority over Argentina's Customs agency) issued a decree which allows Customs to detain potential trademark violating merchandise until the holder of the locally registered trademark authenticates the shipment, and seize it if the holder does not. While regulation of law 25986 would have also allowed detention and seizure of merchandise which violates patent norms (such as copied pharmaceutical products),the AFIP decree only applies to trademarks. This new trademark interdiction program, which became operational in April 2007, has proven highly successful. According to data provided by Customs, the total retail value of trademark violations seized in 2008 was US$ 58.2 million - a 77% increase over such seizures in 2007, and an increase of over 1600% compared to 2006, the year before the program was implemented. ¶25. (SBU) Regarding training in 2008, Post nominated two federal criminal judges who attended a USPTO course specifically for judges and prosecutors on criminal enforcement of copyright and trademarks, and two officials from the GoA National Seed Institute who attended a USPTO course on the International Union for the Protection of New Varieties of Plants (UPOV). Post also made arrangements for a total of four GoA officials - two Buenos Aires City prosecutors and two from the federal Prefectura Naval (Coast Guard equivalent) - to attend a week-long IPR training course in Lima, Peru, at the International Law Enforcement Academy (ILEA) there. -------------- GMO Rights Protection -------------- ¶26. (SBU) Argentine farmers have the legal right to replant - although not to sell - seed generated from a harvest originating from registered seeds without paying additional royalties. However, despite laws on the books to the contrary, Argentine farmers have long sold registered seeds without payment of required royalties, a practice which continued in 2008. This is a widespread problem with soybean seed. According to the president of an Argetine seed producer association (in which Monsanto participates),65-70% of all soy grown in Argentina is produced from Roundup Ready seeds for which no royalties have been paid. Farm associations and industry representatives generally agree that Argentina must elaborate and enact a new seed law that better protects intellectual property. The government of Argentina recognizes the need for a new law, but pressures from competing interests have delayed its development, and no complete draft was produced in 2008. The sale of registered seed from Argentina to neighboring countries, also without payment of royalties, has led to significant planting of unregistered biotech soybeans in Brazil and Paraguay. Argentina is a party to the 1978 Act of the International Union for the Protection of New Varieties of Plants (UPOV),but has not signed the 1991 UPOV convention revision. Monsanto reps have told post that they do not intend to introduce the next generation of Roundup Ready until Monsanto is assured that it will receive proper royalty payments. Ambassador and Embassy officers have raised the Monsanto problem frequently in 2008, but there has been no progress on a new law. Monsanto has been in discussions with the Government and farm groups, and reports some progress in convincing all parties of the need to address this issue. The Argentine Government approved in February 2009 a new biotech cotton seed variety after local officials and the cotton industry reached an agreement with the seed provider to ensure payment of royalties for the new technology. -------------- Embassy IPR Initiatives -------------- ¶27. (SBU) Beyond significant regulatory and enforcement deficiencies detailed above, reluctance by the various GoA enforcement entities to cooperate with each other is a problem that has long contributed to ineffective anti-piracy action in Argentina. The Embassy therefore encourages IPR training that brings together representatives from the full range of GOA institutions involved in anti-piracy efforts. The trust and familiarity resulting from such cooperation would help foster GoA inter-agency teamwork of the sort necessary to effectively combat piracy. One such opportunity began in 2007. With the assistance of the U.S. Department of Justice, Post brought GoA and Argentine private sector officials together for a workshop to explore and develop innovative IPR enforcement methodologies consistent with Argentina's legal and regulatory framework. GoA officials from nine different government entities attended, including a federal judge, a federal prosecutor, the Gendarmeria, the Prefectura, the Federal Police, Customs, AFIP (parent agency of Customs and IRS-equivalent),and prosecutors from both the Province and City of Buenos Aires. The working group was the first public/private IPR working group to meet in Argentina in several years, if not ever. The successful end-product was a manual on enforcement techniques specific to Argentina, which was published in October 2008 with DOJ, Post and INL assistance. Dozens of manuals have since been distributed, including many to the Federal Police training school at the request of the school's leader. The printing and distribution of the manual was a key deliverable in Post's 2008 strategic IPR plan (Ref C). ¶28. (SBU) Another key aspect of Post's IPR plan is public outreach. Along with editorial pieces under Ambassador's byline on the benefits for Argentina of increased protection of innovation and creativity, Post has partnered with the local American Chamber of Commerce (AmCham) in some of its IP initiatives. The AmCham has an annual IP conference and an annual IP essay contest for college students and young professionals, and the Ambassador's participation in both has helped attract press attention to disseminate a pro-IP more widely message in Argentina. -------------- Comment and Recommendation -------------- ¶29. (SBU) Argentina has been on the Special 301 Priority Watch List since 1996. The growing success of the GoA's Customs trademark fraud interdiction program, in effect since 2007, is laudable, and the increased law enforcement activity in the La Salada market is significant. However, there has been no positive movement on the key issues of data protection, patent backlog, injunctive relief, and trademark and copyright fraud rates. The lack of pharmaceutical patent data protection is the issue most often called to Post's attention by U.S. industry participants, and appears to violate TRIPS Article 39.3. The significant decline in INPI patent adjudications in 2008, which INPI attributes to budget constraints, is disappointing and calls into question the organization's ability to make further inroads into a patent application backlog that significantly curtails the effective periods of patent protection. Patents that do get issued carry a questionable legal weight, as evinced by ongoing problems with copied products, the lack of legal resolution of some infringement cases, and variable enforcement of those infringement cases where injunctions have been obtained. Estimated rates of copyright and trademark violations have not diminished; Argentina's legislature and enforcement arms have not undertaken measures necessary to discourage new violations; and the Argentine judiciary remains ambivalent in the fight to protect intellectual property. Arguably, positive GoA actions to improve IPR protection in 2008 were offset by the GoA's action to weaken legislative protection for imports of patented goods. Given the persistence of several significant IPR problems here, the Embassy recommends that Argentina remain on the Special 301 Priority Watch List for 2009. End Comment. ¶29. (SBU) To see more Buenos Aires reporting, visit our classified wbsite at: http://www.state.sgov.gov/p/wh/buenosaires. WAYNE