VZCZCXRO6273
PP RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #3179/01 2932026
ZNR UUUUU ZZH
P 202026Z OCT 06
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 4180
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 OTTAWA 003179 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS TO USTR FOR GROVES, COLLEY, BAE, GARDE 
STATE FOR EB/TPP/IPE JENNIFER BOGER 
USDOC FOR CATHERINE PETERS 
 
E.O. 12958: N/A 
TAGS: CA ECON ETRD KIPR
SUBJECT: SPECIAL 301 OUT-OF-CYCLE REVIEW: EMBASSY VIEWS ON 
IPR SITUATION IN CANADA 
 
REF: A. STATE 149667 
 
     ¶B. OTTAWA 3171 
     ¶C. MONTREAL 365 
     ¶D. MONTREAL 436 
 
¶1. (sbu) Summary:  Canada is starting to take important steps 
toward improving protection for intellectual property rights 
since USTR kept Canada on the "Special 301" Watch List in 
April 2006.  The new Conservative government is more 
receptive than its predecessor to U.S. concerns and on 
October 18 published new data protection regulations for 
pharmaceuticals, an action long advocated by the USG.  The 
Canadian government is also preparing to introduce new 
copyright legislation designed to implement the WIPO Internet 
Treaties and address other IPR concerns.  Cabinet secrecy 
rules prohibit GOC officials from discussing details in the 
legislation, but the bill is expected to be introduced in 
Parliament later in the fall.  In addition, a Canadian 
interagency task force continues to examine international 
"best practices" for improving border enforcement against 
pirated / counterfeit goods.  GOC officials stated that 
granting "ex officio" powers to border agents will likely be 
a key request of the task force.  Canadian officials, 
however, are reluctant to make the act of camcording in movie 
theaters a criminal offense, which motion picture 
distributors seek to deal with a rapidly growing problem that 
is causing considerable revenue loss.  End Summary 
 
¶2. (sbu) In April 2006, USTR retained Canada on the "Special 
301" Watch List, and announced an Out-of-Cycle Review in the 
fall to monitor Canada,s progress in providing adequate and 
effective protection of intellectual property rights.  USTR 
noted that the USG would look to the Government of Canada to: 
 
 
-- ratify and implement the World Intellectual Property 
Organization Copyright Treaty and the World Intellectual 
Property Organization Performances and Phonograms Treaty 
(WIPO Treaties); 
 
-- amend Canada,s copyright law to provide adequate and 
effective protection of copyrighted works in the digital 
environment; and 
 
-- enact legislation to protect against unfair commercial use 
of undisclosed testing and other data submitted by 
pharmaceutical companies seeking marketing approval for their 
products. 
 
USTR also called on Canada to improve its weak border 
enforcement measures, in part by granting customs officers 
the authority to seize products suspected of being pirated or 
counterfeit without the need of a court order. 
 
Post Views: Out of Cycle Review of Canada 
----------------------------------------- 
 
¶3. (sbu) Since April, Canada,s new government has started to 
take important steps aimed at improving intellectual rights 
protection on three principal fronts: data protection for 
pharmaceuticals, new copyright legislation, and improving 
border enforcement.  In a significant action, the GOC 
published new data protection measures for pharmaceuticals in 
the Canada Gazette Part II on October 18, a step that the USG 
has long advocated.  Progress in other IPR areas has been 
less public. 
 
Data Protection Measures Published 
---------------------------------- 
 
¶4. (sbu) The GOC published new data protection measures for 
pharmaceuticals in the Canada Gazette Part II on October 18. 
Canadian officials state that the regulations will protect 
new and innovative drugs, ensure that generic pharmaceuticals 
come into the market with a greater certainty, and improve 
Canada,s international competitiveness - while providing 
QCanada,s international competitiveness - while providing 
opportunities for U.S. companies to enter the Canadian 
market.  GOC officials tell us that new chemical entities 
("innovative drugs" containing an ingredient not previously 
introduced in Canada or a variation of a previously 
ingredient) will enjoy eight years of data exclusivity, and 
that filings for generic drugs will be prohibited for six 
years (with an additional six months exclusivity for 
pediatric studies).  New dosage formulations, changes in drug 
use, and changes in dosages are to be protected under the 
proposed regulations 
 
OTTAWA 00003179  002 OF 003 
 
 
 
The data protection regulations can be found at: 
http://canadagazette.gc.ca/index-e.html 
 
Copyright Legislation Being Drafted 
----------------------------------- 
 
¶5. (sbu) The GOC is preparing copyright legislation expected 
to be introduced in Parliament later this fall.  Canadian 
Heritage and Industry Canada officials representing the two 
ministries responsible for drafting the copyright bill 
decline to discuss details of the legislation because of 
strict Cabinet secrecy rules - but tell us that USG views are 
well known.  These were recently outlined to the GOC in a 
bilateral meeting in Ottawa on October 5 (ref B).  On October 
11, USTR Schwab sent a letter to Industry Minister Maxime 
Bernier to reiterate the USG's specific interests in the 
pending copyright legislation.  Copies of the letter were 
also delivered to Canadian Heritage Minister Beverley Oda and 
Trade Minister David Emerson. 
 
¶6. (sbu) Canadian Heritage Minister Oda and Industry Minister 
Bernier have stated that WIPO implementation is a priority, 
and GOC officials intimate that the new legislation will be 
stronger than C-60, the previous government,s attempt to 
update Canada,s copyright regime, which failed to pass 
Parliament prior to the January 2006 election.  For their 
part, Canadian Heritage officials admit that C-60 had been 
weak regarding circumvention devices, and note that Oda wants 
the new copyright bill to meet international standards. 
(Comment:  Bill C-60 contained serious flaws including 
overly-broad ISP liability exceptions, a lack of ISP 
notice-and-takedown requirements, and weak or nonexistent 
deterrents against circumvention.  End comment) 
 
¶7. (sbu) GOC officials have been even less forthcoming on 
plans regarding Internet Service Provider (ISP) liability, 
but tell us that they are well aware of the USG,s preference 
for a "notice and takedown" model.  Officials suggest that a 
"notice and notice" system would be acceptable to domestic 
stakeholders. 
 
Border Enforcement Improvements Still Being Studied 
--------------------------------------------- ------ 
 
¶8. (sbu) A Canadian interagency group continues to examine 
"best practices" and regulations to improve border 
enforcement.  GOC officials are vague when formal 
recommendations will be made to Cabinet, but say the work of 
the group is "far advanced."  GOC officials acknowledge that 
Canada is the only G-7 country yet to update its border 
enforcement regime, and appear to recognize that border 
officials should receive "ex officio" powers to seize 
suspected counterfeit / pirated goods.  Officials also 
acknowledge that current arrangements between customs 
officials and the Royal Canadian Mounted Police (RCMP) for 
seizing illegal goods are cumbersome.  However, law 
enforcement officials in some parts of Canada are 
occasionally willing to investigate and shut down illegal DVD 
operations, such as occurred in August in Toronto where local 
police arrested four individuals, seized over 140 DVD 
burners, and confiscated more than 20,000 counterfeit movie 
DVDs. 
Reluctance to Move on Camcording 
-------------------------------- 
 
¶9. (sbu) GOC officials question industry estimates about the 
extent of DVD piracy sourced from camcording in Canadian 
movie theaters, and are reluctant to make the act of 
camcording in theaters a criminal offense.  (Canada,s 
Department of Justice considers camcording with an intent to 
distribute to be a criminal offense under Section 402 of the 
Qdistribute to be a criminal offense under Section 402 of the 
Copyright Act, but proving intent is often prohibitively 
difficult for prosecutors.)  GOC officials also state that 
Canada,s law regarding camcording is modeled on 
international obligations requiring enforcement against 
"willful commercial piracy" (i.e., willful infringement for 
commercial purpose), and that the WTO TRIPs Agreement does 
not require camcording to be a criminal offense.  Canadian 
DOJ officials also state that local police officers are 
generally not interested in taking action against individuals 
using camcorders in movie theaters.  Official also suggest 
the motion picture industry should provide more reliable 
figures on camcording to back allegations that legislation is 
needed to combat the problem. 
 
 
OTTAWA 00003179  003 OF 003 
 
 
¶10. (sbu) The Canadian Motion Picture Distributors 
Association believes that close to 75 percent of all films 
illegally camcorded in Canada are recorded in theaters in and 
around Montreal, which was recently identified as the topcity 
in the world for surreptitious camcording (ref C).  The 
industry believes that this is a rapidly growing problem that 
is causing a considerable loss in revenue.  It has also 
traced pirated DVDs to copies first recorded in theaters in 
Ontario, Nova Scotia, Alberta, and British Columbia. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS