VZCZCXYZ0000
RR RUEHWEB

DE RUEHSN #0330/01 0541658
ZNR UUUUU ZZH
R 231658Z FEB 07
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC 5265
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/USDOC WASHDC

UNCLAS SAN SALVADOR 000330 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/IPE - J. Boger 
STATE PASS USTR - J. Choe-Groves 
STATE PASS AID/LAC 
USDOC FOR 4332/ITA/MAC/MSIEGELMAN 
USDOC FOR 3134/ITA/USFCS/OIO/MKESHISHIAN/BARTHUR 
USDOC FOR C. PETERS 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON ES
SUBJECT: OPTIONAL 2007 SPECIAL 301 REPORT 
 
REF: A) STATE 07944; B) 06 SAN SALVADOR 464 
 
¶1.  (SBU) Summary:  One year since CAFTA-DR' entry into force, El 
Salvador has made little headway in IPR protection.  Law enforcement 
agencies are making some use of their new ex-oficio powers, but 
there remains unfamiliarity with those powers in some offices. 
Resource constraints and other law enforcement challenges are also a 
hindrance to improved IPR protection.  Authorities have yet to 
establish regulatory systems to provide data protection to 
pharmaceuticals or agricultural chemicals.  Post continues to 
support training and technical assistance to support El Salvador's 
efforts to implement CAFTA-DR IPR commitments.  End summary. 
 
Notorious Markets 
----------------- 
¶2.  (U) Infringing goods are readily available in cities throughout 
El Salvador, usually in informal markets.  The largest concentration 
of such goods is offered for sale by informal venders of DVDs and 
CDs who have built stalls along 4a. Avenida Sur y Norte in downtown 
San Salvador, a few blocks east of the Central Market. 
 
Optical Media Piracy 
-------------------- 
¶3.  (SBU) The Civilian National Police (PNC) and Attorney General's 
Office have targeted large-scale distributors of optical media over 
the last year in an effort to maximize scarce resources and minimize 
potential public opposition to targeting street vendors.  In 2006, 
authorities seized 194,610 pirated DVDs and CDs, down from 331,046 
units seized in 2005.  Also seized was equipment used to produce 
optical media.  Meanwhile, local industry association Promotion and 
Protection of Intellectual Property (FOMPI) reports that 26 million 
blank optical media were imported in 2006. 
 
¶4.  (U) FOMPI and other industry groups report the police are 
effectively using limited resources to target distributors, but that 
the Attorney General's Office has been unwilling to aggressively use 
new ex-oficio (CAFTA-DR required) enforcement powers.  FOMPI 
representatives report that the Attorney General's Office still 
requires a complaint from the original rights holder (not a licensee 
or distributor) before continuing with an investigation and eventual 
prosecution. 
 
Use/Procurement of Government Software 
-------------------------------------- 
¶5.  (U) Representatives of the Business Software Alliance (BSA) and 
Ministry of Economy are working together on a new campaign to 
eliminate illegal software from government computers.  The legal 
framework for that cooperation is an Executive Order dated February 
20, 2006, requiring government offices to use legitimate software. 
The first step in the campaign is an inventory of government 
software, which is scheduled for completion in March 2007. 
Government offices are to report the results of the survey to the 
Ministry of Finance, which will incorporate procurement of 
legitimate software in the budget process.  The most recent survey 
of government software use, which BSA conducted in 2002, indicated 
that the piracy rate was 25 percent.  It identified the following 
offices for their flagrant use of unlicensed software: Ministry of 
Health, Electoral Council, National Civilian Police, Human Rights 
Office, and the Public Defender's Office. 
 
TRIPS Compliance, FTA Implementation and Other IP Related Issues 
--------------------------------------------- ---- 
¶6.  (U) Ref. B summarizes legislation passed in December 2005 to 
meet CAFTA-DR IPR obligations.  Reforms included the extension of 
copyright protection from 50 to 70 years, extension of 
pharmaceutical patent terms from 15 to 20 years, and establishment 
of data protection pharmaceuticals (five years) and agricultural 
chemicals (ten years).  Also significant were amendments to the 
Penal Code intended to strengthen law enforcement efforts to 
discipline IPR violations, including a provision to allow 
enforcement agencies to seize suspected pirated and counterfeit 
goods, the equipment used to produce them, and documentary evidence. 
 
 
Data Protection 
--------------- 
¶7.  (SBU) Despite CAFTA-DR obligations that El Salvador provide 
test-data protection for new pharmaceuticals and agricultural 
chemicals, such protection is still not available one year after the 
trade agreement's entry into force.  The Superior Council for Public 
Health (CNSP), which is tasked with providing marketing approval for 
new drugs, is working with the Ministry of Economy and National 
Registry Center (CNR) to prepare an implementing regulation for data 
protection and patent linkage.  Meanwhile, the Ministry of 
Agriculture is working with the Ministry of Economy on an 
implementing regulation for agricultural chemicals.  However, 
interagency squabbles and a lack of transparency in the consultative 
process for developing these regulations have led to numerous 
delays.  In October 2006, at Post's insistence, the Ministry of 
Economy shared a draft regulation on data protection for drugs with 
industry representatives PhRMA and FEDEFARMA.  FEDEFARMA provided 
feedback on the regulations, and as of February 2007 Ministry of 
Economy officials report the regulation is near completion.  A draft 
for agricultural chemicals is not yet available. 
 
Production, Import, and Export of Counterfeit Goods and Enforcement 
--------------------------------------------- ------ 
¶8.  (SBU) See paragraph 3 for information on enforcement issues 
related to optical media.  Trademark violations are also widespread, 
most notably for clothing and footwear.  BSA estimates the rate of 
software piracy at 80 percent, despite a 2006 campaign that 
encouraged 213 businesses to purchase licensed software.  In the 
first part of 2006, BSA representatives reported difficulties 
working with the Attorney General's Office on software piracy cases 
similar to those described in paragraph 3.  However, they report 
more aggressive investigation and prosecution in recent months, 
thanks in part to the naming of a new Attorney General who 
previously headed the CNR. 
 
¶9.  (U) The Attorney General's Crimes against Private Property and 
Intellectual Property Unit is responsible for criminal enforcement 
of IPR laws in the metropolitan area of San Salvador.  Three 
prosecutors in that office work part-time on IPR cases.  In the rest 
of the country, IPR cases are handled by different regional and 
sub-regional offices of the Attorney General, but there are no 
specialized units.  The National Police financial crimes unit 
supports the Attorney General's Office, but it also conducts its own 
investigations and raids.  The number of officers in that office was 
recently cut in half from more than 600.  Many of those officers 
were re-assigned to units focusing on the prevention and 
investigation of gang-related violent crime, a severe problem in El 
Salvador. 
 
¶10.  (SBU) There was one conviction on an IPR-related crime in 2006, 
the result of a guilty plea.  There is a widespread view that most 
Salvadoran judges lack adequate legal preparation to adjudicate IPR 
cases.  Currently, IPR violations are seen in mercantile and penal 
Courts, and there are no specialized IPR courts. 
 
¶11.  (SBU) McDonald's is involved in a trademark dispute, and 
related contractual dispute, with a former franchisee.  In June 
2003, the Supreme Court ruled in favor of McDonald's and the company 
was allowed to remove infringing names and arches from the 
restaurants of the former franchisee.  In December 2005, an appeals 
court ruled against McDonald's on a related contractual issue, 
awarding the former franchisee $24 million in compensation and 
damages.  McDonald's is appealing the ruling to the Supreme Court. 
 
 
Treaties 
-------- 
¶12.  (U) The WIPO Performance and Phonograms Treaty entered into 
force in El Salvador on May 20, 2002, while the WIPO Copyright 
Treaty entered into force on March 6, 2002. 
 
Training 
-------- 
¶13.  (U) Post supports a variety of IPR training opportunities for 
Salvadoran officials.  In 2006, Econoffs identified fifteen 
Salvadoran judges, prosecutors, police, and other officials to 
participate in USPTO training sessions on topic such as patent 
examination, law enforcement, and genetic resources.  The Public 
Affairs Section has organized videoconferences on IPR issues and 
encouraged U.S. artists in El Salvador on USG-funded travel 
highlight IPR.  Econoffs have also helped government officials 
access private-sector expertise to help implement CAFTA-DR 
obligations related to IPR.  For example, Post encouraged PhRMA to 
provide technical assistance to draft an implementing regulation for 
data protection and patent linkage. 
 
¶14.  (U) Post also helped Ministry of Economy officials contact IFPI 
representatives to develop a conversion program for vendors of 
pirated optical media.  In early 2006, Post's ICE Attache organized 
training for police, prosecutors, and judges on how to enforce the 
new IPR laws, especially the ex-oficio search and seizure 
provisions.  In March 2007, ICE will sponsor a regional conference 
on IPR enforcement in San Salvador.  In May 2007, OPDAT and INL will 
sponsor a workshop at which the participants will create a standard 
operating procedure manual for conducting criminal investigations of 
IPR violations.  A second workshop is planned for judges who will 
create a bench book to serve as a guide for managing IPR trial 
cases. 
 
Butler