VZCZCXYZ0000
PP RUEHWEB

DE RUEHSG #2350/01 3202015
ZNY CCCCC ZZH
P 162015Z NOV 05
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC PRIORITY 7878
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SANTIAGO 002350 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/EPSC 
STATE PLEASE PASS TO USTR FOR MARY SULLIVAN 
COMMERCE FOR SARA MCDOWELL 
 
E.O. 12958: DECL: 11/16/2015 
TAGS: ECON ETRD PGOV KIPR CI
SUBJECT: MISSION PROMOTION OF IPR PROTECTION IN CHILE 
 
REF: A. SANTIAGO 1424 
 
     ¶B. SANTIAGO 2256 
     ¶C. SANTIAGO 2315 
     ¶D. WARD/YANG/SHERIDAN E-MAILS 
     ¶E. SANTIAGO 2331 
     ¶F. SECSTATE 175907 
 
Classified By: Ambassador Craig Kelly for Reasons 1.4 (b) and (d) 
 
¶1. (SBU) Summary.  One of the Mission's top priorities in 
2005 has been to focus attention in Chile on the continuing 
failure to implement full protection of intellectual 
property.  The overall U.S.-Chile relationship, including the 
bilateral trade relationship, is better than ever, and the 
U.S.-Chile Free Trade Agreement has been a major success for 
both sides.  However, there is poor respect in Chile for IPR, 
with spotty understanding in government circles, competing 
political and commercial interests, and courts generally 
unprepared to deal with cases.  To address this and to 
support U.S. firms harmed by IPR violations, the Mission has 
undertaken a number of initiatives highlighted below. 
Progress has been incremental at best.  End Summary. 
 
¶2. (SBU) By most measures, the U.S. bilateral relationship 
with Chile is better than ever.  With the Free Trade 
Agreement that came into force on January 1, 2004, the trade 
relationship is stronger than ever, with bilateral trade up 
by double digits.  In addition to trade, related cooperation 
under the FTA on labor and environmental protection is going 
smoothly.  The one dark cloud hanging over the trade 
relationship is Chile's continuing failure in IPR 
enforcement.  The lack of Chilean protection for IPR, 
especially for pharmaceuticals, is significant.  Below is a 
chronological roundup of the main Mission efforts to raise 
the profile of IPR protection in Chile, and positively shift 
public and government approaches to IPR protection.  In this 
endeavor - several tugboats trying to turn around the Queen 
Mary - we have found like-minded advocates in some unexpected 
places. 
 
Training Judges 
--------------- 
 
¶3. (U) In May, the Embassy, the University of Chile's Law 
School and the Chilean Supreme Court jointly sponsored a 
one-day training workshop for judges who will hear IPR cases. 
 The workshop was financially supported by the Embassy's 
Public Affairs section and the Mission's inter-agency Law 
Enforcement Committee.  A district judge from Maryland, Andre 
Davis, and Jason Gull from the Department of Justice's IPR 
Crime Office traveled to Chile to participate. 
 
Joint Demarches with Swiss 
-------------------------- 
 
¶4. (SBU) In meetings with European counterparts, the 
Ambassador learned that EU countries were encountering the 
same difficulties with the GOC on IPR issues.  While some EU 
members wanted to work formally with the U.S., in the end 
they could not obtain clearance from Brussels on the proposed 
demarche points.  However, the Swiss were eager to move ahead 
separately with the U.S., as their pharmaceuticals have been 
victimized by the same lack of protection as U.S. firms.  The 
Ambassador and Swiss Ambassador Regli paid three joint calls 
in June on the Minister of Health, the Foreign Minister and 
the Under Secretary for Economy (ref A).  While the 
Ambassadors received cordial receptions from all, it was 
clear that there was no overall Chilean coordinator on this 
issue.  Subsequent to these joint demarches, the GOC did 
create an inter-ministerial commission to coordinate 
internally on IPR issues (ref B). 
 
Inter-Agency IPR Commission 
--------------------------- 
 
¶5. (SBU) The GOC's inter-ministerial commission is composed 
of five ministries -- Foreign Affairs, Commerce, Agriculture, 
Education and Health.  The commission has three levels, with 
technical experts meeting at least once a month.  At the 
vice-ministerial level, there are to be meetings every 45 
days, and ministers are to meet under the auspices of the 
Commission three to four times per year.  Carolina Belmar, 
who is the head of the intellectual property unit at the MFA, 
told econoff the explicit goal in creating the Commission was 
to foster dialogue and understanding on IPR issues among 
ministries (ref B).  The Embassy had sent Belmar to the U.S. 
in September as an IV visitor on an IPR-related program. 
 
IPR Speech to AmCham 
-------------------- 
 
¶6. (U) In September, the Ambassador launched a constructive 
public initiative, designed to turn up the heat on the GOC, 
with a speech directly to the business community.  At a 
September 28 meeting of the American Chamber of Commerce, he 
outlined ten reasons why improved IPR protection was in 
Chile's own best interest.  The speech received extensive 
press coverage, including editorials of support of the U.S. 
position.  The speech also led to further press interviews 
over the next month with the Ambassador and other Embassy 
officers on IPR protection and its benefits. 
 
Follow-up with MFA 
------------------ 
 
¶7. (SBU) In response to SecState 175907, the Ambassador paid 
an additional call on FM Walker in September to discuss the 
Eli Lilly case involving its Stratera product.  Walker had 
not been briefed on the issue, but asked for details 
outlining the case.  Working with USTR, language was drafted 
and cleared and the information sent on September 28.  Since 
then, the Ambassador has been reassured by Walker that the 
GOC is working on "addressing U.S. concerns" on IPR 
protection in Chile, but he has not provided specifics. 
 
Call on the President's Office 
------------------------------ 
 
¶8. (SBU) The Ambassador and Swiss Ambassador Regli met with 
Secretary General of the Presidency Dockendorff in September 
 
SIPDIS 
to discuss Chile's inadequate response to our IPR concerns 
and to seek President Lagos' intervention.  After the 
meeting, Minister Dockendorff sent a written response to 
Ambassador Kelly assuring him that new Chilean legislation 
would address the USG,s concerns.  He also mentioned the 
creation of the inter-ministerial commission tasked with 
examining and coordinating the GOC position on IPR. 
Dockendorff's letter also mentioned the passage of Law No. 
19,996, which would adapt Chilean domestic law to meet 
international commitments signed by Chile.  To date the 
implementing regulations for this law have not been passed, 
but the initial assessment we have from pharmaceutical 
sources who have seen the draft regulations is not 
encouraging. 
 
Continuing High Level Dialogue 
------------------------------ 
 
¶9. (C) FM Walker told the Ambassador in a follow-up meeting 
on November 10 that the GOC was continuing to take steps to 
address our IPR concerns (ref C).  Walker said the GOC was 
improving inter-ministerial coordination, and that progress 
was imminent on addressing U.S. data protection concerns. 
Also in November, the Ambassador met with newly-appointed 
Constitutional Court President Jose Luis Cea Egana (ref E). 
Cea agreed with the Ambassador that Chile was doing a poor 
job of protecting IPR. 
 
¶10. (C) Summary: Mission-wide efforts have generated some 
positive responses from the GOC and from the business 
community in Chile.  We believe the Ambassador's 
interventions and joint demarches with the Swiss have 
certainly gotten the attention of major players like FM 
Walker and presidential advisor Dockendorff.  We know that 
President Lagos was fully briefed to discuss the IPR issue 
during his bilateral meeting with President Bush on the 
margins of the Summit of the Americas two weeks ago.  We will 
follow up with MFA on the demarche to FM Walker concerning 
the Eli Lily drug Stratera (ref F).  To date we have not 
received an answer. 
 
¶11. (C) Summary continued: We have seen positive responses 
both publicly and in private to the Ambassador's September 
speech to the AmCham.  We believe the creation of the GOC's 
inter-ministerial commission was a direct outcome of the 
pressure applied by the joint demarches with the Swiss. 
Despite that, it remains unclear if the GOC has begun to 
change its fundamental attitude toward IPR protection (i.e. 
leave it to the companies to take their cases to court).  We 
continue to see violations of patents, most egregiously in 
pharmaceuticals.  Our outreach, training and advocacy efforts 
will continue, but we see a long and potentially bumpy road 
ahead before Chile truly changes the way it handles IPR. 
KELLY