VZCZCXRO3742
RR RUEHCHI RUEHDT RUEHHM
DE RUEHML #2160/01 1430819
ZNR UUUUU ZZH
R 230819Z MAY 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC 1109
INFO RUEHZS/ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 04 MANILA 002160 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/EP, EB/TPP/IPE, EB/IFD, EB/TPP/BTA/ANA 
STATE PASS TO USTR FOR BWEISEL AND DKATZ 
STATE PASS USAID FOR CDOWNEY 
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE 
USDOC PASS USPTO FOR PFOWLER, KHAUDA 
BANGKOK FOR DOJ CHRIS SONDERBY 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR BEXP RP
SUBJECT:  EMBASSY IPR ROUNDTABLE HIGHLIGHTS 
OPPORTUNITIES FOR COOPERATION 
 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET 
DISTRIBUTION - PROTECT ACCORDINGLY 
 
REF:      A)  MANILA 05 05447 
          B)  MANILA 05 05839 
 
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SUMMARY 
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¶1.  (SBU) At an Embassy-sponsored roundtable discussion 
on intellectual property rights (IPR) on May 11, 
private sector participants acknowledged a heightened 
level of engagement by the GRP, but expressed concern 
over weak enforcement.  Many industries are 
implementing targeted strategies to improve IPR 
protection including public-private partnerships with 
the GRP and public education campaigns.  Intellectual 
Property Office Director General Adrian Cristobal 
assured participants of the GRP's continued commitment 
to a strong IP system as demonstrated by ongoing work 
under its internal action plan.  The Ambassador 
congratulated the GRP for recent progress but 
underscored the need for further work.  She encouraged 
stronger teamwork among the USG, private sector, and 
GRP agencies to advance IPR enforcement and initiatives 
to strengthen protection and appreciation of benefits 
of IPR for the Philippine economy.  END SUMMARY. 
 
------------------------------------------ 
EMBASSY HOSTS ROUNDTABLE DISCUSSION ON IPR 
------------------------------------------ 
 
¶2.  (U) The Embassy held its third "Roundtable on 
Intellectual Property Rights" (IPR) to promote positive 
initiatives to improve IPR protection in the 
Philippines, which involved about 70 participants from 
the private sector, other diplomatic missions, the GRP, 
and the USG.  The program was divided into two parts. 
During the first part, USG and private sector 
participants discussed the state of IPR protection in 
the Philippines since its movement from the Special 301 
Priority Watch List to the Watch List in February 2006. 
The Ambassador opened the second part of the program, 
for which the GRP joined the Embassy and private sector 
participants in the roundtable.    Intellectual 
Property Office Director General Adrian Cristobal 
delivered a presentation on GRP accomplishments and 
strategies for improving IPR protection, which was 
followed by general discussion. Other GRP participants 
included officials from the Justice Department, 
Customs, the National Police, and the Supreme Court, as 
well as the Chief State Prosecutor, Deputy Prosecutor, 
Optical Media Board Chairman Edu Manzano, and a well- 
known judge, Antonio Eugenio, who has an extensive 
background in IPR cases. 
 
--------------------------------------------- ----- 
GRP ENERGIZED, BUT ENFORCEMENT REMAINS A CHALLENGE 
--------------------------------------------- ----- 
 
¶3.  (SBU)  Industry participants acknowledged progress, 
but pointed out that enforcement remains a major 
problem because of lengthy judicial delays, lack of 
transparency, and corruption.  Levi Strauss Company 
cited a decade-old case that the GRP just now will 
begin prosecuting since the courts over the last ten 
years have had to address interlocutory appeals.  Many 
noted that prosecution of IPR violators lacks 
transparency: judges often quash search warrants 
without explanation and issue rulings inconsistent with 
other cases.  Venue is another issue, as cases are 
often tried in provincial courts, which may be 
susceptible to local influence.  Participants also 
expressed concern that the judicial process and 
sentencing provisions do not serve as effective 
deterrents to IPR violators. 
 
¶4.  (SBU) Participants said that GRP support for IPR 
protection has been lukewarm, particularly with regard 
to copyright protection.  Participants reported mixed 
results in dealing with the Intellectual Property 
Office (IPO), the Optical Media Board (OMB), and other 
agencies.  Participants commented that most senators 
and congressmen appear to recognize the value of IP 
 
MANILA 00002160  002 OF 004 
 
 
rights, but are often subject to political pressure by 
interest groups.  Representatives of the Pharmaceutical 
and Healthcare Association of the Philippines (PHAP) 
said that the GRP has been largely unresponsive to its 
key issues, such as Senate Bill 2139, otherwise known 
as the Roxas Bill (ref A) and the implementing rules 
and regulations to Executive Order 51, or the "Milk 
Code" (ref B).  Microsoft reported tepid local business 
support for IPR enforcement efforts due to fear of 
negative political ramifications.  However, some 
participants, including Microsoft and the Cable and 
Satellite Broadcast Association of America (CASBAA), 
successfully engaged the IPO on programs where they 
collaborate and provide funding and/or technical 
assistance to GRP agencies. 
 
------------------------------------------ 
DIALOGUE FOCUSES ON STRATEGIES FOR SUCCESS 
------------------------------------------ 
 
¶5.  (U) Industry presenters highlighted strategies for 
improving IPR in the Philippines, which include 
initiatives on enforcement, public education, and 
greater cooperation with the GRP.  CASBAA's anti-piracy 
program is aimed at disrupting illegal programming 
through judicial and police activities.  Beginning in 
September 2005, CASBAA financed surprise raids on four 
cable companies and repeat raids on two.  All companies 
quickly resumed broadcasting, but one company stopped 
airing illegal programming.  CASBAA noted that many in 
the cable industry took notice and CASBAA hopes the 
raids serve as a deterrent to other would-be pirates. 
CASBAA is also filing criminal and administrative 
complaints against cable pirates, acknowledging that 
while the judicial process is arduous, it is also 
disruptive to the pirating company.  CASBAA commenced a 
public relations campaign in October 2005 aimed to 
persuade companies using illegal programming to "go 
legit," to create a sense of public rejection of 
piracy, and to publicize enforcement actions through 
newspaper articles and television commercials.  CASBAA 
has proposed a joint "Cable Piracy Summit" with the 
GRP.  CASBAA said that the Mission's support has been 
essential to their efforts. 
 
¶6.  (U) The heart of Microsoft's IP approach is to 
build a "strong IP ecosystem" by focusing on 
development of the local software industry in order to 
create local demand for IPR protection as well as 
opportunities for economic growth.  One example is the 
"Fly High 2010" campaign, a public-private 
collaborative growth plan for the Philippine software 
industry, which includes IPR protection as a key 
strategy.  Microsoft also targets enforcement efforts 
both independently and through the Business Software 
Alliance (BSA).  In August 2005, BSA collaborated with 
the National Bureau of Investigation (NBI), the OMB, 
and the Philippine National Police (PNP) on a 
"Countdown-Crackdown" campaign, which targeted law 
enforcement raids on software pirates.  BSA also 
spearheaded licensing compliance efforts with less than 
desired results.  Microsoft noted that collaboration 
with the GRP can improve the net result; Countdown- 
Crackdown resulted in a much higher magnitude of 
compliance, which was sustained through the first 
quarter of 2006. 
 
¶7.  (U) Levi Strauss Company's self-described 
aggressive brand protection strategy includes trademark 
registration, enforcement, lobbying, and training and 
education.  Through its "Show No Mercy" program, the 
company pledged to make infringement as economically 
unfeasible as possible through relentless enforcement. 
Levi Strauss actively lobbies the GRP, including IPO, 
NBI, Bureau of Customs (BOC), and the Department of 
Justice (DOJ) and is participating in many anti- 
counterfeiting coalitions.  In training and education, 
Levi Strauss conducted brand protection workshops with 
Customs familiarizing officials with trademarks, 
designs, and methods for identifying counterfeits. 
Levi Strauss will be embarking on a project with IPO in 
October 2006 to increase brand awareness and engage in 
further education through participation in public 
events and advertisements. 
 
 
MANILA 00002160  003 OF 004 
 
 
¶8.  (SBU) With the RP's removal from the Priority Watch 
List, industry participants stressed that measures to 
build and ensure transparency within the RP judicial 
system are imperative since this is where enforcement 
of IP laws tends to break down.  Embassy officials 
encouraged the industries to identify both alleged 
infringers, and judges and prosecutors who allegedly 
enable them.  That information, if deemed credible, may 
now be included in the Embassy's consular lookout 
system.  While such lookouts may not necessarily result 
in a visa denial, the information may be a useful tool 
for consular officers. 
 
¶9.  (U) Cisco Systems described tactics that have been 
successful in Singapore, including raids on infringing 
companies, seizure of assets of these companies and 
their principal officers, and use of funds from these 
assets for children's programs.  Embassy officers 
encouraged private sector participants to share best 
practices from ASEAN countries with the GRP. 
Participants agreed that creating IP courts would help 
eliminate the current practice of trying cases in 
provincial courts. 
 
¶10.  (U) In her remarks, the Ambassador underscored the 
common economic interests of the U.S. and the RP in 
achieving stronger IPR protection.  She congratulated 
the GRP for recent improvements and initiatives that 
led to its removal from the Priority Watch List but 
noted that there is still work to be done.  The 
Ambassador encouraged the private sector to continue 
working with both the U.S. and the Philippine 
governments.  The Ambassador noted that effective 
teamwork would strengthen enforcement critical to new 
investment, entrepreneurship, and economic growth. 
 
--------------------------------------------- - 
GRP LOOKS TO SUSTAIN IMPROVEMENTS IN IP REGIME 
--------------------------------------------- - 
 
¶11.  (U) IPO Director General Adrian Cristobal's 
presentation focused on defining achievements and 
outlined strategies for sustaining those improvements 
in order to strengthen the RP's intellectual property 
system.  Cristobal emphasized that there is political 
will to improve IPR protection at the highest levels of 
the GRP, specifically citing President Arroyo's recent 
policy statements linking IPR protection to the GRP's 
war against poverty and tying IP to the RP national 
interest.  Cristobal told participants that creative 
strategies to maximize resources are necessary, as 
resources for IPR enforcement are shared with other 
enforcement priorities.  He suggested that IP owners 
look at increased investment in public education and 
brand protection. 
 
¶12.  (U) Cristobal cited a number of recent policy 
directives and initiatives that further clarify 
responsibilities and strengthen government agencies in 
charge of IPR enforcement.  He said that there is an 
increased awareness of IP issues in the general public 
and within certain public sectors.  Cristobal's 
highlighted successes:  28 convictions for IPR 
violators between 2004 and the first quarter of 2006; 
targeted training for judges and prosecutors on IPR; a 
public outreach campaign; and public-private 
partnerships with various companies and industry 
associations.  IPO's ongoing goals include creating an 
IP Academy, expanding cooperation with IPR 
stakeholders, and building public awareness. 
Cristobal said that the GRP's continued work on key IPR 
initiatives will ensure further improvements in the 
Philippines' IP system. 
 
¶13.  (SBU) In a follow-on discussion, Cristobal 
detailed plans for the IPO's unclassified, web-based 
IPR enforcement database, which is expected to be 
operational in June 2006.  Case details, including 
information on prosecutors, judges, and general case 
status, will be included in the database.  (Note:  The 
website is already partially constructed.  However, it 
may take several months before it is fully operational 
due to interagency procedural concerns that need to be 
addressed.  End Note.) 
 
 
MANILA 00002160  004 OF 004 
 
 
¶14.  (U) With respect to pharmaceutical patents, 
Cristobal reassured the group that the Philippines 
protects all patents for the full duration of those 
patents, as provided under the law.  On illegal 
importation of IPR infringing goods, Cristobal said 
that the Bureau of Customs recently signed a Memorandum 
of Understanding with China, pledging mutual 
cooperation and detailing specific procedures for 
handling such goods.  The GRP noted difficulties in 
coordinating with IP rights holders on suspected 
infringement cases.  The IPO is developing a database 
of IP owners, but requires assistance in determining an 
efficient mechanism for contacting them. 
 
--------- 
COMMENTS 
--------- 
 
¶15.  (SBU) The general tone of the discussion was 
positive and forward-looking.  While many private 
sector representatives acknowledged a heightened level 
of GRP attention and progress since the 301 Priority 
Watch List decision in February 2005, they expressed 
concern about ongoing problems, especially enforcement. 
Several participants commented that the Embassy 
roundtable  assured them that the USG is maintaining 
pressure on the GRP.  Cristobal's presentation also 
conveyed that the GRP is looking to build on 
improvements it has already made and not rest on its 
laurels.  Many private sector participants said that 
the event was helpful and constructive, and suggested 
that the Embassy also facilitate smaller roundtables to 
focus on specific issues. 
 
¶16.  (SBU) By having industries focus on successful 
strategies for engaging the GRP, Post hoped to 
encourage a sharing of ideas and further collaboration 
across industry sectors and with GRP agencies.  Those 
industries and companies who have clearly defined 
strategies that includes positive cooperation with the 
GRP, such as CASBAA, Levi Strauss, and Microsoft, 
express more optimism about the prospects for improved 
IPR protection within their industry sector.  A common 
IPO complaint is that some of the most vocal critics of 
the quality of IP protection in the Philippines, such 
as the International Intellectual Property Alliance 
(IIPA) and the Association of American Publishers, have 
not engaged the GRP on any level.  Private sector 
involvement is an important component of Post's 
strategy to improve IPR.  Roundtables are a useful tool 
for defining problems, encouraging cooperation and 
reinforcing GRP commitments to progress. 
 
¶17. (SBU) The GRP remains highly engaged on IPR and has 
a defined strategy for moving forward in 2007.  GRP 
attendance at Post's roundtables have been high, but 
key enforcement agencies have not consistently 
attended.  The unprecedented participation of several 
senior Department of Justice officials, including the 
Chief State Prosecutor, the Assistant State Prosecutor, 
and a senior judge, was particularly encouraging.