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DE RUEHRL #2397/01 2301402
ZNR UUUUU ZZH
P 181402Z AUG 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 4776
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUCNFRG/FRG COLLECTIVE PRIORITY
RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1322

UNCLAS SECTION 01 OF 02 BERLIN 002397 
 
SIPDIS 
 
SIPDIS 
 
USTR FOR POSNER (OGC), WINTER (CHINA) AND MCCOY (IPR) AND 
STATE FOR EAP/CM CRANE, EB/TPP/BTA SAEGER AND EB/TPP/IPE 
FELSING, USDOC FOR ISRAEL 
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD AORC WTRO GM
SUBJECT: DEMARCHE ON WTO DISPUTE ON CHINA IPR: GERMANY 
PREFERS DIALOGUE FIRST 
 
REF: SECSTATE 126703 
 
¶1. Embassy delivered reftel talking points to Knut Bruenjes, 
Deputy Director General for Trade Policy, at the Ministry of 
Economics and Technology, August 11, 2006.  Bruenjes said 
German officials are aware of the seriousness of the IPR 
violations involving trademarks and copyrights occurring in 
China, but would prefer to pursue a dialogue with China 
before seeking consultations at the WTO.  He said Germany 
supported EU Trade Commissioner Mandelson's timeline for 
dialogue with China on IPR issues until roughly the end of 
¶2006.  He said Germany would urge the Commission to prepare 
for the likelihood it would have to seek recourse in the WTO 
after Mandelson's timeline expires.  Bruenjes agreed to put 
this issue on the EU's 133 Trade Committee's agenda in the 
next few weeks. 
 
¶2. In response to our inquiry about concrete complaints from 
German firms, Bruenjes said he would poll Germany's large 
companies and industrial associations about specific IPR 
violations.  He noted that companies like Puma and Adidas, as 
well as the Federation of German Industry (BDI) and German 
International Chamber of Commerce (DIHK), could well have a 
record of such incidents.  Bruenjes thought such concrete 
examples would help provide substance for an eventual phone 
conversation on the issue between Commerce Secretary 
Gutierrez and Minister Glos.  He underlined the importance of 
long-term U.S.-German cooperation on IPR in China, pointing 
to our current common approach on automotive parts in the 
WTO. Bruenjes agreed with our suggestion the DIHK-sponsored, 
"2006 Hamburg Summit - China Meets Europe" in Hamburg on 
September 13-15, would provide an occasion for high-ranking 
German government officials to address China's IPR 
enforcement policies with their Chinese counterparts (Note: 
Chinese Prime Minister Wen Jiabao is expected to attend the 
Summit on September 13-14, before traveling by train to 
Berlin on September 14, where he will meet with Chancellor 
Merkel.  End Note). 
 
--------------------------------------------- ------- 
Business Associations: Prefer EU's Go Slow Approach 
--------------------------------------------- ------- 
 
¶3. Representatives from the German International Chamber of 
Commerce DIHK) and the Federation of German Industry (BDI) 
echoed the cautious approach of the German government on 
bringing the IPR complaint before the WTO, citing the fear of 
losing contracts and business opportunities in China. 
According to Doris Moeller, Head of DIHK's Intellectual 
Property Office and Board Member of the German Economic 
Action Committee Against Product and Trademark Piracy (APM), 
DIHK has received numerous complaints from German businesses 
operating in China regarding IP and technology transfer 
violations.  She noted, however, there are few companies 
willing to raise their complaints in a forum like the WTO for 
fear of losing potential business in China.  Moeller said 
DIHK supported the EU's dialogue proposal and would prefer to 
see if it brings any results before taking action at the WTO. 
 
¶4. Although industry and government currently prefer a 
cautious approach, Moeller noted that DIHK is taking 
significant steps to systematize and document IP violations 
occurring in China.  Within the next two months, DIHK plans 
to release a questionnaire to all its members, as well as 
post it on its webpage, asking for information from companies 
on specific IP violations they have experienced.  To date, 
information has apparently been anecdotal. The point of this 
exercise is to provide the German government with concrete 
examples of copyright, trademark, and technology transfer 
violations that have occurred in China.  Moeller promised to 
share the results with us, as companies responded to the 
survey. 
 
¶5. Christina Rentzmann, Country Director for China at BDI, 
underlined the cautious approach of German business when 
addressing IP violations in China.  Due to the many contracts 
German companies have with the Chinese government, German 
businesses are reluctant to speak out publicly on IP 
violations.  According to Rentzmann, German firms and their 
business associations are not ready to embrace a more 
aggressive approach to halting IP violations in China, i.e. 
WTO consultations, and would rather allow the programs in 
place, e.g. exchanges, training of judges and lawyers, to 
continue.  Given business' passive attitude, Rentzmann was 
 
BERLIN 00002397  002 OF 002 
 
 
skeptical about the amount of information companies would be 
willing to provide DIHK on IP violations.  She also noted 
that German businesses and the government tended to 
differentiate between technology/know-how transfer violations 
and IP violations involving copyrights and trademarks in 
general, and focused their efforts more on preventing the 
former.  That said, she agreed these issues are closely tied 
together and strengthening enforcement and regulations to 
prevent IP trademark violations in China would also help stop 
illegal technology transfers. 
KOENIG