VZCZCXRO5822
RR RUEHAO
DE RUEHCV #0486/01 0531910
ZNR UUUUU ZZH
R 221910Z FEB 06
FM AMEMBASSY CARACAS
TO RUCPDOC/DEPT OF COMMERCE
RUEHC/SECSTATE WASHDC 3305
INFO RUEHBO/AMEMBASY BOGOTA 6041
RUEHLP/AMEMBASSY LA PAZ 1689
RUEPE/AMEMBASSY LIMA 9894
RUEHQT/AMEMBASSY QUITO 171
RUEHAO/AMCONSUL CURACAO 0615
RUEHGL/AMCONSUL UAYAQUIL 0306
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 CARACAS 000486 
 
SIPDIS 
 
SIPDIS 
 
 
STATE FR EB/IPE CLACROSSE, DEPT PLS PASS TO USTR 
JCHOE-ROVES, DOC JBOGER, DOC PLS PASS TO USPTO JURBAN AN 
LOC STEPP 
 
E.O. 12958: N/A 
TAGS: KIPR VE
SUBJECT: 2006 SPECIAL 301 RECOMMENDATION - KEEP VENZUELA 
ON PRIORITY WATCH LIST 
 
REF: 05 CARACAS 0596 
 
This message is sensitive but unclassified please treat 
accordingly. 
 
------- 
Summary 
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¶1. (SBU)  The BRV continues to exhibit lackluster performance 
in protection and enforcemnt of intellectual property 
rights.  In the pastyear, little has been done to strengthen 
an alredy weak enforcement regime.  The market for 
legiimate music CDs is minuscule, and CD, DVD, and software 
piracy remains high.  SAPI, the government aency that 
oversees IPR enforcement and issues paents has not issued a 
single patent to an importd drug since 2004, and has 
attempted to raise reistration fees without due process.  In 
addition,the BRV has proposed a new Copyright Law (still 
nder consideration by the National Assembly) that ould 
effectively eviscerate copyright protection.  Both the head 
of SAPI and President Chavez hiself have questioned publicly 
the concept of intelectual property rights.  Only SENIAT, 
the custos and tax agency, has taken positive steps by 
encting a regulation allowing ex officio seizures of 
contraband material and mounting public anti-pircy 
campaigns.  Based on the BRV's antipathy to IP, weak 
enforcement, and given the possibility of legislation that 
would further weaken IPR, Post recommends Venezuela stay on 
the Special 301 Prioity Watch List for 2006.  End Summary. 
 
-------------- 
Pharmaceuticals 
--------------- 
 
¶2. (SU)  The international pharmaceutical industry contnues 
to see a weakening of the intellectual property environment 
in Venezuela.  Despite Venezuela having the highest 
per-capita medicine consumption in Latin America, and being 
the third largest market in the region, SAPI the Autonomous 
Intellectual Property Service (the country's primary IPR 
authority), has not issued a single patent to an imported 
pharmaceutical product in the last two years.  Applications 
languish at SAPI and mandatory government sanitary 
regstration of pharmaceutical products results in increased 
counterfeiting due to BRV refusal to provide confidential 
data protection for product submissions which have not yet 
received patent protection. 
 
¶3. (SBU) The BRV does not protect second use patents for 
products such as the male impotence drug Viagra, which is 
only patented for its originl use as a hypertension 
medication.  Counterfeit medications remain a problem in 
Venezuela.  Accoding to the Chamber of Pharmaceutical 
Companies CAVEME), these medications make up 10 percent of 
the market.  (Note: According to a private pharmacetical 
company contact, Venezuelans consumption has historically had 
strong brand loyalty, which hs favored legitimate providers. 
 End Note).  TheMinistry of Health ended a public awareness 
campign against counterfeit products when relations beteen 
CAVEME and the Ministry soured in late 2005. 
 
¶4. (SBU) In June 2005, the director of SAPI, Edardo Saman, 
unilaterally raised patent registraton fees by 2,000 percent 
without National Assemby approval.  COVAPI, the bar 
association for indutrial property lawyers, filed suit and 
won in Jauary 2006, forcing SAPI to return to original fee 
schedules. 
 
--------------------------- 
Recored Media and Software 
-------------------------- 
 
¶5. (SBU) The market for legitimate CDs and DVDs continues to 
decline, as street vendors operate in a free, unregulated 
environment.  According to SACVEN, the association of 
recording artists and producers, only 70 legitimate record 
stores exist in Venezuela.  The piracy rate for music CDs has 
now climbed to a reported 83 percent, according to local IPR 
contacts (this figure is consistent with International