VZCZCXYZ0001
OO RUEHWEB

DE RUEHMU #0411/01 0531432
ZNR UUUUU ZZH
O 221432Z FEB 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5346
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE IMMEDIATE
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE

UNCLAS MANAGUA 000411 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR LIBRARY OF CONGRESS COPYRIGHT OFFICE, COMMERCE FOR USPTO
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD NU
SUBJECT: INFORMATION FOR NICARAGUA SPECIAL 301 REVIEW 
 
REF: STATE 14937 
 
¶1. (SBU) Summary.  Nicaragua is not currently placed on any 
Special 301 list, and post recommends maintaining this 
status.  This recommendation is offered in spite of the fact 
that there remains room for improvement on legal structure 
and judicial attitudes, and that the Dole Food Company has 
written to the USTR requesting Nicaragua's placement on the 
Priority Watch List due to the "seizure" of Dole's trademark 
by a Nicaraguan court.  Nevertheless, the Government of 
Nicaragua (GON) has taken several encouraging actions in the 
last year which improve upon the areas of weakness. 
Authorities have conducted several enforcement actions, 
participated in high-level, USG-sponsored enforcement 
training academies, sponsored their own large-scale IP 
workshops, and worked diligently with Embassy personnel on 
changing the culture of piracy.  Furthermore, Nicaragua is a 
party to DR-CAFTA and post remains cautiously optimistic that 
a range of intellectual property rights reforms (necessary 
for DR-CAFTA entry into force) will be passed shortly.  All 
of these factors lead post to believe that the IPR climate 
will continue to improve.  End Summary. 
 
- - - - - - - - 
Legal Framework 
- - - - - - - - 
 
¶2. (U) Since 2000, Nicaragua has modernized its domestic IP 
laws and signed several major international conventions. 
Five international agreements entered into force in Nicaragua 
in 2003: 
 
- The Locarno Agreement on International Classification of 
Designs and Industrial Models; 
- The Strasbourg Agreement on International Classification of 
Patents; 
- The World Intellectual Property Organization (WIPO) 
Copyright Treaty; 
- The WIPO Performances and Phonograms Treaty (WPPT); and 
- The Patent Cooperation Treaty (PCT). 
 
Additionally, Nicaragua ratified the Dominican Republic - 
Central America Free Trade Agreement in 2005.  The 
Intellectual Property Registry (RPI) of the Ministry of 
Industry, Commerce and Development (MIFIC) has worked closely 
with the USTR in recent months to harmonize the new 
CAFTA-related IPR obligations with existing national laws and 
regulations, and agreed on language required for new IPR 
reforms which have been added to the Nicaraguan National 
Assembly's agenda and are expected to be voted on in the near 
future as a condition for DR-CAFTA entry into force. 
(Comment: Post remains cautiously optimistic that these 
reforms will pass and is working cooperatively with the GON 
and legislative and private sector allies to promote their 
passage.  End Comment.) 
 
¶3. (SBU) Although Nicaragua possesses a solid legal framework 
for the protection of intellectual property rights, a lack of 
strong penalties for violations, inadequate implementation of 
existing law, and ineffective enforcement remain areas of 
concern.  Nicaragua suffers from weak institutions due to a 
lack of resources and susceptibility to official corruption. 
Additionally, the legal system suffers from a general lack of 
knowledge of the subject matter, and a judiciary which is 
open to improper outside influence.  Regardless, both the 
National Prosecutor and the Nicaraguan National Police (NNP) 
Economic Crimes Unit have demonstrated an interest in IPR and 
have expressed a desire to work with the affected industry 
representatives to crack down on piracy.  (Note: The bulk of 
reported IPR related violations in Nicaragua involve pirated 
movies and music CDs.  End Note.) 
 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Training and GON Institutional Support for Intellectual Property Rights
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
 
¶4. (SBU) The National Intellectual Property Rights Office and 
Intellectual Property Registry (RPI), which are sub-units of 
the Ministry of Trade (MIFIC), have increased efforts to 
train judges, prosecutors, police and GON officials in 
implementation and enforcement of IPR commitments.  In the 
past year, RPI sponsored nine seminars in various regions of 
the country, which trained over 600 Government, law 
enforcement, prosecution, and judicial officials in various 
aspects of IPR enforcement.  Several high-level RPI and NNP 
Economic Crimes Unit personnel also participated in two IPR 
enforcement academies in the United States sponsored by the 
U.S. Patent and Trademark Office.  Post is nominating 
additional candidates for a USPTO enforcement academy in 
April that includes Spanish-language translation.  The 
National IPR Office also prepared IP guides for childen, 
which it is distributing in schools, and published three 
editions of an electronic IP magazine. 
 
¶5. (SBU) RPI initiated several institutional reforms over the 
last two years.  In the area of industrial property, the 
national patent office has upgraded its capacity to handle 
international requests per the Patent Cooperation Treaty.  In 
2005, RPI also strengthened the protection of new plant 
varieties in Nicaragua under the International Union for the 
Protection of New Varieties of Plants (UPOV) Convention. 
Nicaragua is a leader in the region in the implementation of 
the UPOV Convention.  RPI assisted over 1,800 students, 
attorneys, and business people who used its trademark 
registry for research and due diligence checks.  3,896 new 
trademarks were registered in the last year.  As of February 
2006, 41% of the trademark data base has been digitalized. 
RPI expects the percentage to rise to 59% in 2006-2007.  The 
GON acted to adhere to the conditions of the Budapest Treaty, 
recognizing the International Deposit of Microorganisms, and 
has instituted inter-institutional coordination for the 
protection of test data.  On the international front, 
Nicaragua actively supports U.S. proposals on geographic 
indicators (GI) and is strongly against anti-competitive EU 
GI proposals in the WTO.  Nicaragua favors the U.S. position 
on a revised Trademark Law Treaty in the March 2006 WIPO 
Diplomatic Conference in Singapore and supported U.S. 
proposals at the July 2005 WIPO Diplomatic Conference on the 
Protection of Broadcasting Organizations in Cartegena. 
 
¶6. (U) MIFIC worked closely with the private sector to 
develop the pro-IPR Nicaraguan Copyright Association 
(NICAUTOR) which is actively involved in a public and 
legislative campaign to pass IPR reforms and foster a culture 
of respect for intellectual property.  NICAUTOR has also been 
active in conducting research on behalf of, and providing 
critical support to, the NNP Economic Crimes Unit.  Most 
recently, NICAUTOR (with substantial ECON support and a 
$2,000 USAID grant) has organized a publicity campaign by a 
coalition of Nicaraguan musicians, concert promoters, video 
production companies, and legal importers of videos and 
movies to raise public awareness of the economic and cultural 
cost of piracy, to promote respect for intellectual property 
and to support the pending IP reforms.  Recognizing the 
threat to Nicaragua's international commitments, including 
those involving intellectual property, the GON reacted 
aggressively to prevent passage of anti-GMO "biosecurity" 
legislation in 2005. 
 
- - - - - - 
Enforcement 
- - - - - - 
 
¶7. (U) MIFIC, the National Prosecutor, the NNP Economic 
Crimes Unit, and private industry (including NICAUTOR) have 
worked together on several large enforcement actions over the 
past year.  As a result of raids on outlets selling pirated 
goods, 13 thousand cassettes, 19 thousand CDs, and several 
pieces of equipment for making illegal copies of music and 
movies were seized and destroyed.  These raids against nine 
establishments and vendors in Nicaragua,s largest open air 
market took place between March 2005 and January 2006.  These 
actions were given high profile attention by Nicaraguan 
media.  (Note: Due to the weakness of the current law, 
authorities could only seize the contraband items.  They 
could not prosecute the makers and sellers of pirated goods. 
This weakness is addressed in pending IP reform legislation. 
End Note.)  The National IPR Office also facilitated the 
non-judicial resolution of at least twelve cases involving IP 
infringements on music, software, photographs, videos and 
other works.  (Comment: Despite the successful enforcement 
measures noted above, additional action needs to be taken 
against the sale of pirated goods in "reputable" 
establishments.  End Comment). 
 
- - - - - - - - - - 
THE DOLE COMPLAINT 
- - - - - - - - - - 
 
¶8. (SBU) Dole Food Company comments to the USTR highlight the 
serious issue of an assault on the intellectual property 
rights of a U.S. corporation by the Nicaraguan courts.  The 
basis of Dole's complaint is a judge's order to "embargo" and 
auction Dole's Nicaraguan trademark in order to enforce 
judgments against Dole in cases arising under Nicaragua Law 
¶364.  Law 364, enacted in 2001, established special 
procedures for claimants alleging injury from the use of 
Dibromochloropropane (DBCP)-based pesticides in the 1970,s 
and (allegedly) 1980,s.  Under Law 364, Dole has been 
subjected to judgments in 16 Nicaraguan cases involving 959 
claimants which total $885.9 million.  In the U.S. and 
Nicaragua, Dole is involved in current cases with claimed 
damages of approximately $22 billion.  Dole argues that the 
Nicaraguan court ordered the attachment of Dole's trademarks 
"because the Nicaraguan plaintiffs and their U.S. lawyers 
have been unable to find a court anywhere in the hemisphere 
that would enforce the judgments issued by the Nicaraguan 
courts..."  (Note: Dole no longer has any business operations 
or other attachable assets in Nicaragua, although there are 
vendors who buy Dole products abroad and import them to 
Nicaragua for re-sale.  End note.) 
 
¶9. (SBU) Comment on the Dole Complaint: Dole Food Company 
raises legitimate concerns, but we do not believe that this 
case warrants Nicaragua's placement on the Priority Watch 
List.  The USG has continuously and strenuously objected to 
Law 364 and subsequent actions taken by the Nicaraguan legal 
system which wrongly damage Dole's interests.  We expect 
continuing attention from the highest levels to remedy the 
unjust treatment of Dole and other U.S. companies, which is 
detrimental to Nicaragua's aspirations for increased foreign 
investment and economic stability.  Reform of the Nicaraguan 
legal system also remains a core mission objective.  The GON 
view is that this trademark issue is only tangentially 
related to broader IPR concerns, and it is not fair to punish 
Nicaragua for the actions of the courts in light of progress 
made on a host of other fronts.  (Note: The Nicaraguan courts 
are notoriously hostile to executive branch interests.  End 
Note.)  We understand the Dole comments were the only 
negative comments about Nicaragua's IPR enforcement received 
by the USTR. 
 
- - - - - - - - 
RECOMMENDATION 
- - - - - - - - 
 
¶10. (SBU)   Post remains concerned about the GON's weakness 
in both capacity and will to broadly enforce its IPR 
commitments, as well as the Dole trademark issue; however, we 
believe that the GON has demonstrated a commitment to 
strengthening institutional capacity to deal with this issue 
and has taken a series of concrete actions towards that end. 
We believe that the GON's actions in 2005 and 2006 described 
above, and its negotiation of new commitments under DR-CAFTA, 
are sufficient reasons to maintain Nicaragua's current status 
under Special 301. 
TRIVELLI