VZCZCXRO6213
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #4222/01 2122108
ZNR UUUUU ZZH
P 312108Z JUL 06
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 2429
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 004222 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/MEX, EB/TPP/IPE, INL/C/CP 
DEPT PASS TO DOJ FOR CCIPS AND OPDAT 
USTR FOR JMELLE/VESPINEL 
DOC FOR 4320/ITA/MAC/ONAFTA/ARUDMAN/GWORD 
USPTO FOR BHARDMAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR KPAO WTRO MX
SUBJECT: EMBASSY MEXICO CITY 2006-2007 IPR PROTECTION 
PLANS/RECOMMENDATIONS 
 
REF: A. MEXICO 2951 
 
     ¶B. STATE 67311 
     ¶C. 05 MEXICO 893 
     ¶D. 05 MEXICO 4795 
 
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SUMMARY 
------- 
 
¶1. (U) Despite the increases in raids and seizures carried 
out over the last year by Mexican Customs (Aduanas) and the 
Specialized IPR Unit within the Attorney General's office 
(PGR), markets selling counterfeit goods are ubiquitous and 
abuse of intellectual property rights (IPR) remains rampant. 
Combined losses to Mexican and international companies - 
especially in the film, music, software, textile and 
pharmaceutical industries - are in the hundreds of millions 
of dollars annually.  This cable lays out action 
recommendations and key challenges for the next year. End 
Summary. 
 
 
--------------- 
GENERAL SETTING 
--------------- 
 
¶2. (U) Although IPR laws on the books are largely in 
compliance with NAFTA and WTO TRIPS, they are poorly 
understood and weakly applied by overburdened Mexican judges 
who often reject IPR cases.  As a result, prosecutors rarely 
put forward the effort to build cases to take to trial, 
focusing instead on meeting the extensive legal requirements 
necessary to carry out raids (Ref A).  In the 2006 Special 
301 report, in which Mexico remained on the Watch List, the 
USG recognized Mexico's increased enforcement efforts against 
IPR violators, but pointed out the need for significant 
improvement in follow-on prosecutions and deterrent penalties 
(Ref B). 
 
¶3. (U) Mexico's IPR challenges are deep rooted and defy easy 
solutions.  The United States cannot create the political 
will within the Mexican government to fully carry out its IPR 
laws.  Nor can we change the underlying socio-economic 
situation in which the informal economy and piracy thrive. 
However, we can help build capacity of the main IPR 
protecting bodies within the government, train 
non-governmental organizations in effective public diplomacy 
and lobbying strategies, educate the public and our 
government interlocutors of the high societal costs 
associated with piracy, and continue to raise our concern for 
IPR protection with the GOM. 
 
------------- 
OVERALL PLANS 
------------- 
 
¶4. (SBU) As with our 2005 Action Plan (Ref C), Post plans to 
work closely with the Department of Justice's Office of 
Computer Crime and Intellectual Property Section (CCIPS) and 
the Office of Overseas Prosecutorial Development, Assistance 
and Training (OPDAT).  OPDAT administers an INL-funded budget 
for Mexican IPR initiatives that Post used in 2005 and early 
2006 to carry out last year's IPR Action Plan.  Our plans for 
the remainder of 2006 and the first half of 2007 rely on 
using these existing OPDAT funds, which are approximately 
$70,000. 
 
¶5. (U) On July 2, Mexico held national elections and Post 
expects that many of our most important contacts at Aduanas, 
PGR, and the Intellectual Property Institute (IMPI) will 
resign in the coming months.  The personnel changes are 
likely to temporarily disrupt, if not halt, IPR enforcement 
during the interregnum and for several months after the new 
administration takes over in December.  Consequently, Post 
expects delays to our outreach and training efforts. 
 
¶6. (U) Nevertheless, in the next few months we should be able 
to carry out a few training programs already in progress. 
Once the new administration is in place, our first step will 
be to establish trust and strong working relationships with 
the new personnel.  The extensive private sector contacts we 
developed over the past year and our involvement in the 
Inter-Institutional Committee (Ref D) should help pave the 
way. 
 
MEXICO 00004222  002 OF 003 
 
 
 
---------------------------------------- 
TRAINING AND OUTREACH - SECOND HALF 2006 
---------------------------------------- 
 
¶7. (U) In March 2006, Econoff, a CCIPS attorney and two 
officers from the Department of Homeland Security's Office of 
Immigration and Customs Enforcement (ICE) conducted 
investigation and prosecutorial training for officials from 
PGR, Aduanas, and Public Security in Mexico City and 
Guadalajara.  Felipe Munoz, the current head of PGR's IPR 
Unit, has requested a second round of this training for 
district attorneys from each state.  Munoz said the training 
would need to take place in August or September before he and 
his boss, Assistant Attorney General Carlos Aguilar, leave 
their posts.  Econ FSN is currently working with Munoz and 
CCIPS to set the actual training dates. (Note: although Munoz 
is willing to carry out the training, the final decision 
depends not on his boss Aguilar, but on another Assistant 
Attorney General.) 
 
¶8. (U) Over the past year, Post has sent several personnel 
from IMPI, Aduanas, PGR, INDAUTOR, and the Mexican judiciary 
for training at the U.S. Patent and Trademark Office's 
(USPTO) Global Intellectual Property Academy (GIPA) and the 
Enforcement Academy.  USPTO training programs have been very 
well received by our contacts and help build professional 
capacity within these important IPR agencies.  GIPA trainings 
have recently been broken out by individual IPR topic (e.g. 
patents, trademarks, etc.) and therefore can be better 
targeted to our contacts' needs.  Post plans to continue 
actively nominating candidates for USPTO training; funding 
those we can while also requesting GOM and USPTO funding as 
appropriate. 
 
¶9. (SBU) As referenced above, the Mexican judiciary is a weak 
link in the Mexican IPR regime.  However, Post's ability to 
engage judges in training has been difficult due to 
professional sensitivities - i.e. it can be perceived as a 
criticism of their knowledge and abilities.  Other private 
sector organizations also recognize this challenge and are 
working to address it.  Alejandro Bustos, Legal Director at 
media conglomerate Televisa, is developing an IPR symposium 
for judges this summer and early fall.  Bustos requested our 
support and has asked us to invite two or three U.S. judges 
to participate in the roundtable.  Post identified a 
Spanish-speaking judge who will be participating in the forum 
scheduled for August 22.  The forum will focus on Mexico's IP 
obligations under international provisions and treaties. 
 
------------------ 
FIRST HALF OF 2007 
------------------ 
 
¶10. (U) In April, several leading anti-piracy organizations, 
including the Motion Picture Association, Alianza Contra 
Pirateria, National Apparel Chamber, and the Business 
Software Alliance, announced they were forming a new 
anti-piracy NGO.  Roberto Castaneda, President of Alianza 
Contra Pirateria and Nike's internal legal counsel, said they 
will focus their efforts on government lobbying and public 
outreach.  The organization has requested Post's assistance 
to develop a training program on effective lobbying and a 
public service announcements campaign.  Target dates for both 
efforts are 2007. 
 
¶11. (U) In September 2005, Post, DOJ and the Customs and 
Border Protection (CBP) conducted operational training at the 
port city of Manzanillo for Aduanas inspectors from 
throughout Mexico.  The weeklong training program included 
basic classroom IPR education - what is IPR, why it is 
important to protect, what are the basic laws, etc. - as well 
as hands-on targeting and inspection work at the port.  An 
important result was the seizure of 28,000 counterfeit Mont 
Blanc pens with a street value of over $1 million.  The 
training was extremely well received by Aduanas. Several 
participants commented that it was the first training they 
had received on any topic.  At the conclusion of the event we 
held a brainstorming session to develop ideas for future 
capacity building events.  The most popular idea was to 
develop an IPR "tool box," to include instructional and 
educational material, which would be sent to every major 
customs location and used as a reference tool for expanding 
IPR knowledge.  Post also recommends sending few new Aduanas 
 
MEXICO 00004222  003 OF 003 
 
 
officials to a U.S. Strategic Trade Center, ideally during an 
IPR Trade Fair, to enable them to see CBP and ICE best 
practices at a U.S. port. 
 
¶12. (U) The U.S. International Trade Commission and the 
Jalisco state government are interested in organizing a Latin 
America-wide Anti-Piracy Congress in Guadalajara to bring 
together industry, government, NGOs and other experts to 
discuss the growing piracy problem in Latin America and to 
identify best practices on protecting IPR.  The idea is in 
its early stages, but it could be an interesting way to 
highlight the impact that piracy has on Latin America's own 
indigenous industries and artists, as opposed to large U.S. 
multinationals.  Post will continue to discuss the idea with 
ITC and the Jalisco state government. 
 
--------------------- 
FURTHER DOWN THE ROAD 
--------------------- 
 
¶13. (SBU) PGR and Aduanas are fundamental to Mexico's 
enforcement of its IPR laws.  Unfortunately, the anti-piracy 
divisions within these agencies lack the capacity and funding 
to fully carry out their missions.  PGR's Specialized IPR 
unit, as discussed in Ref A, lack computers and printers and 
have virtually no investigation devices.  Aduanas, which 
controls the entry of goods to Mexico, has no database of 
registered trademarks nor digital examples of authentic 
products against which they can verify suspicious shipments. 
And, when they believe they have identified and detained 
counterfeit product, they have no listing of rights holders 
to contact in order to take the next legal step necessary 
according to Mexican law to seize the product. 
 
¶14. (SBU) Addressing this lack of capacity within two of 
Mexico's principal IPR protection agencies could 
significantly reduce the quantity of fake products that enter 
the country, as well as improve PGR's ability to build cases 
and carry out raids.  Together it could mean less fake 
products offered for sale in the numerous popular street 
markets.  Post will need to further investigate the viability 
and cost of the idea.  Ultimately it will only be possible 
with strong commitment and support from the new heads of 
these agencies under the new administration.  If this support 
is forthcoming Post could submit a proposal to INL in the 
2007 budget request. 
 
---------- 
CONCLUSION 
---------- 
 
¶15. (SBU) It is true that the GOM has made improvements in 
IPR protection in the last few years.  At the same time, 
limited funding and personnel at the key agencies, laws that 
restrict agencies' ability to carry out enforcement actions, 
the paucity of convictions, lack of fines for IPR violators, 
and the existence of thousands of street vendors and markets 
selling pirated products with near impunity to a willing 
public, all point to the urgent need for further 
improvements.  As in the past, IPR protection in Mexico will 
improve only when the GOM makes enforcement and prosecution a 
higher priority. 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity 
 
GARZA