VZCZCXRO4011
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0286/01 0530115
ZNR UUUUU ZZH
O 220115Z FEB 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8045
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0646
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 PHNOM PENH 000286 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EB/IPC, EAP/MLS AND EAP/EP 
DEPARTMENT PASS TO USTR AND USPTO 
 
E.O. 12958: N/A 
TAGS: ETRD ECON KIPR CB
SUBJECT: CAMBODIA:  COMMENTS FOR SPECIAL 301 REVIEW 
 
¶1.  (SBU) Summary.  Post recommends that Cambodia not be 
placed on the Special 301 Watch List for the time being. 
Cambodia is not fully TRIPS compliant and its IPR enforcement 
is weak.  Although pirated optical discs and counterfeit 
products are pervasive in the market place, virtually all of 
the products are produced elsewhere.  The local market is 
small, with most sales to tourists and foreigners residing in 
Cambodia, and damage to the industry is minimal.  Despite its 
shortcomings, the Cambodian government recognizes the 
importance of IPR protection and has sought assistance in 
capacity-building, both bilaterally and through ASEAN 
initiatives.  After decades of turmoil beginning in the early 
1970's and ending only in 1998 with the surrender of the last 
Khmer Rouge units, Cambodia has come late to awareness of the 
IPR issue.  Given its chaotic past and expressed willingness 
to cooperate with the U.S., most recently during February 12 
TIFA discussions, post believes Cambodia should be given more 
time.  In the meantime, we intend to work closely with 
Cambodia to raise public awareness, engage in 
capacity-building and provide technical assistance.  End 
Summary. 
 
IPR Environment 
--------------- 
 
¶2. (SBU) Although not yet a signatory to the Berne 
Convention, Cambodia has most of the legislation in place to 
protect Intellectual Property Rights (IPR), including laws on 
trademarks, copyrights and patents.  However, Cambodia's IPR 
protection regime is not fully in compliance with its WTO 
TRIPS commitments.  It has not fully implemented its 
commitments under the BTA in the area of IPR protection and 
enforcement.  The Cambodian government (RGC) has taken few 
significant measures to enforce its IPR obligations.  One of 
the few such actions was a raid in October 2005 on a 
cigarette factory that was manufacturing counterfeit Marlboro 
cigarettes.  The factory manager was later convicted in 
absentia.  In November 2005, the WTO granted a deadline 
extension until 2013 for Cambodia and other least developed 
countries to enforce copyright laws and begin accepting 
patents. 
 
¶3.  (SBU) Infringements of IPR are pervasive, ranging from 
the sale of pirated computer software, music compact discs, 
and DVDs to the sale of counterfeit products, including 
watches and drugs.  The expense and scarcity of books has led 
to the sale of photocopied books, including college text 
books and comic books. 
 
¶4.  (SBU) Post is not aware of the existence of plants to 
manufacture DVDs in Cambodia, although small shops duplicate 
copyrighted material on rewritable CDs.  The great majority 
of discs on the market are counterfeited in Malaysia or 
China.  Given the small size of the middle class, there is 
very little local demand.  Sales are mostly to tourists and 
foreigners living in Cambodia.  Damage to the industry, 
therefore, is probably very small.  There have been 
occasional police raids on counterfeit copies of domestic CDs 
or DVDs, always at the request of the copyright holder.  In 
addition to counterfeit cigarettes noted above, the Pfizer 
Pharmaceutical Company has detected counterfeit versions of 
its profitable Viagra drug on the local market. 
 
¶5.  (SBU) On several occasions, the Ministry of Commerce has 
observed the use of American trademarks, such as Holiday Inn, 
Pizza Hut and McDonalds.  When these infringements have 
become known, the Ministry has obtained agreement from the 
violators to change the names of their establishments. 
However, Anheuser-Busch, Inc. lost a lengthy legal battle in 
2005 with the Czech firm Budejovicky Budvar to gain exclusive 
use of the Budweiser mark in Cambodia. 
 
IPR and TIFA Talks 
------------------ 
 
¶6.  (SBU) The Cambodian government recognizes the importance 
of IPR protection, both to protect its nascent film and music 
industries and in order for Cambodia to participate fully in 
world markets.  For example, during the February 12 inaugural 
bilateral meeting under the Trade and Investment Framework 
Agreement (TIFA), which was signed in July 2006, Commerce 
Minister Cham Prasidh raised the difficulties 
Cambodia-produced Angkor Beer was having entering the U.S., 
as a Cambodia-American had frivolously registered the 
trademark in the U.S.  More significantly, Prasidh talked of 
creating a link between trade and IPR.  He said that Cambodia 
planned to require all firms that established businesses in 
 
PHNOM PENH 00000286  002 OF 002 
 
 
Cambodia to observe IPR.  Also in that meeting, the RGC 
requested additional technical assistance on a range of IPR 
issues, including comments on the draft law establishing a 
commercial court.  The USG has provided training to RGC 
officials responsible for IPR enforcement, including a 
workshop in 2006 conducted by the U.S. Patent and Trademark 
Office (USPTO) for persons from all sectors involved in the 
IPR issue. 
 
Recommendation 
-------------- 
 
¶7.  (SBU) Like many developing countries, Cambodia has come 
late to awareness of the need to protect IPR.  Suffering 
through decades of turmoil that began in the early 1970's and 
which included the genocidal Khmer Rouge regime, Cambodians 
only established political and economic stability in 1998 
when the last Khmer Rouge units laid down their arms.  With 
this turbulent past, it is not surprising that IPR initially 
was not a high priority for the RGC.  Nevertheless, there is 
now growing awareness within the RGC and increasing desire to 
increase its capabilities and to cooperate with the USG on 
this issue.  Given Cambodia's chaotic past and expressed 
willingness to cooperate with the U.S., both bilaterally and 
in the ASEAN framework, post believes that Cambodia should be 
given additional time to fully establish its IPR regime. 
This clearly was the sense of the WTO when it extended the 
deadline for IPR enforcement compliance until 2013.  In the 
meantime, we intend to work with the Cambodian government to 
raise public awareness of IPR, engage in capacity-building 
and provide technical assistance where possible. 
MUSSOMELI