VZCZCXRO6491
PP RUEHRG
DE RUEHBR #1105/01 1661115
ZNR UUUUU ZZH
P 151115Z JUN 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 9233
INFO RUEHSO/AMCONSUL SAO PAULO 0118
RUEHRI/AMCONSUL RIO DE JANEIRO 4589
RUEHRG/AMCONSUL RECIFE 6808
RUEHAC/AMEMBASSY ASUNCION 6140
RUEHBU/AMEMBASSY BUENOS AIRES 4836
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 05 BRASILIA 001105 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EB/TPP/IPE AND INL/C 
 
E.O. 12958: N/A 
TAGS: KIPR ECON BR
SUBJECT:  BRAZIL: IPR TRAINING REQUEST 
 
REF:  A) 07 SECSTATE 55928 
 B) 05 BRASILIA 1163 
 C) 07 BRASILIA 944 
 D) 07 BRASILIA 249 
 E) 07 RECIFE 37 
 
¶1.  In accordance with requirements presented in reftel A, Embassy 
Brasilia submits the following proposal for 2007 IPR enforcement 
training.  The proposal is for a grant of $43,900 to provide a 
two-day high-level workshop for law enforcement officials (Federal 
Police, Customs, Highway Patrol) and judicial authorities (local and 
state prosecutors and judges) in the state of Pernambuco, a key 
locale in Mission Brazil's efforts to fight IPR piracy.  The 
workshop is modeled on the five training programs, held in the 
States of Minas Gerais, Bahia, Parana, Rio Grande do Sul, and Mato 
Grosso do Sul, funded under the same IPR program.  The workshop will 
focus on expanding law enforcement's knowledge of existing laws 
against piracy and protection of intellectual property rights so 
that civil and criminal cases against intellectual property rights 
abusers hold up in court (see para 19).  By reviewing what laws 
exist, what is enforceable, what has been done to combat piracy and 
protect intellectual property rights, working relationships between 
those in the field and those prosecuting are strengthened.  Mission 
Brazil proposes to use leading Brazilian experts and NGOs such as 
the Motion Picture Association's enforcement affiliate in Brazil - 
the Association for the Defense of Intellectual Property (ADEPI), 
the American Chamber of Commerce, the National Association for 
Guaranteeing Intellectual Rights (ANGARDI), and the Northeast 
Association for Intellectual Property (ANEPI) - to provide key 
expertise in organizing and conducting the workshop.  Use of the 
very qualified Brazilian experts resident in these organizations 
will allow us to better adapt the training program to Brazilian 
sensitivities, while saving money on the international air-fare 
necessary to bring outside experts from the U.S. 
 
¶2.  Identify Priority Countries/Regions that Threaten Intellectual 
Property Rights:  Brazil continues to be a high priority country for 
USG efforts in improving IPR enforcement.  The Northeast of Brazil 
has seen a surge in recent piracy activity that has resulted in high 
profile enforcement actions.  This has been especially pronounced in 
Pernambuco. 
 
¶3. Economic Impact: The enormity of the effects of piracy in Brazil 
is hard to exaggerate.  Brazil's illegal market in just 3 types of 
products (clothes, tennis shoes, and toys) resulted in tax revenue 
losses of at least 18.6 billion reais (roughly USD 8.86 billion). 
This figure is equivalent to 45% of the annual deficit in Brazil's 
bankrupt social security system.  A February 2007 International 
Intellectual Property Alliance (IIPA) report noted that losses due 
to copyright piracy of business software rose almost 30% in 2006; 
entertainment software industry losses increased 24 % over the same 
period. A national survey showed a 45% increase countrywide in the 
monetary amount of illegitimate toys, clothing and sports footwear 
traded in Brazil and that counterfeit CDs are the most produced and 
purchased items in the contraband market. 
 
¶4. In 2006, the American Chamber of Commerce and ANGARDI conducted a 
poll in Recife, Sao Paulo, Rio de Janeiro and Belo Horizonte to 
determine consumers' buying habits and what they thought about the 
economic effects of buying pirated goods.  The results for Recife 
(the capital of Pernambuco) were startling and point out the 
importance of fighting piracy in the Northeast.  While the report 
showed a decline in sale of pirated goods in Sao Paulo, Brazil's 
major metropolitan area, it disturbingly pointed out that  Recife 
consumers buy more pirated goods and are less likely to understand 
the social and economic impacts of piracy than consumers in the 
other cities.  The 2006 commercial value of 13 categories of pirated 
goods in Recife (ranging from toys to pocketbooks/wallets to 
batteries) amounted to USD 83.9 million according to the report.  If 
pirated goods are sold at half the price of legitimate goods, this 
amount reflects a loss of USD 167.7 million in the formal economy, 
and a loss in tax revenue of USD 66.7 million. 
 
¶5. Crime and Security:  While the Triborder region (Brazil, Paraguay 
and Argentina) continues to be a major route for pirated goods, law 
enforcement officials and NGOs have noted the increasing involvement 
of the Northeast in the movement of pirated goods due to stepped-up 
GOB customs enforcement efforts in the Triborder region.  Citing one 
example, the town of Caruaru (about an hour's drive from Recife) is 
the well-know wholesale market center and source of most pirated 
products in the Northeast.  Experts describe an almost wild west 
atmosphere in Caruaru with perceived threats to anti-piracy 
activists (reftel E). 
 
¶6. Relevance to Other U.S. Objectives:  Intellectual property 
 
BRASILIA 00001105  002 OF 005 
 
 
protection is a key U.S. government objective and is one of the 
primary goals in our Mission Strategic Plan (MSP).  IPR violations 
cost U.S. (and local) industry, reduce the incentives to invest in 
research and development, and contribute to a culture of 
lawlessness.  Piracy, in particular, has connections to illicit 
trade in general, and its illegally-gained revenues are esily 
laundered into other illegal activities.  U.. industry has been 
engaged in a long struggle t enter the highly-protected markets of 
Latin Ameica, and piracy strikes at the gradual gains made over 
time in this regard. 
 
¶7. Political Will: Both the executive branch and the legislative 
branch have indicated a political will to continue the fight against 
piracy.  In 2004, the GOB established the National Anti-Piracy 
Council (CNCP), a public-private endeavor overseen by the Ministry 
of Justice to coordinate national IPR protection efforts.  Since 
then, the GOB has evidenced more effective anti-piracy enforcement 
efforts.   For example, the value of seizures by local and federal 
authorities of counterfeit and contraband goods in the first nine 
months of 2006 increased 54% over the same period in 2005. 
 
¶8. Capacity to Achieve Measurable Progress:  As a result of 
encouragement and actions taken by the CNCP, Brazil's law 
enforcement agencies are creating specialized IP units to better 
focus and coordinate their enforcement activities and to help 
develop essential expertise.  The CNCP plans to develop an 
operational database to help coordinate law enforcement actions.  It 
also is considering methods for measuring/gauing progress in 
enforcement efforts.  Progress onenforcement will also be 
measurable by the annua enforcement statistics released by the GOB 
Natinal Anti-Piracy Council (CNCP) and through statistcs on 
estimated intellectual piracy loses compiled by industry 
organizations such as IIPA. 
 
II. Components of an Effective IPR Regime 
 
¶9. Legal framework: This proposal is being made with consideration 
of instituting a more comprehensive framework for conducting 
bilateral technical cooperation on IPR enforcement, which the USG is 
trying to develop with the GoB. Brazil has many elements of what 
could be an effective IPR regime, but in most cases, the 
capabilities of these elements need to be enhanced and better 
coordinated to provide effective enforcement. 
 
¶10. Enforcement capacity: Brazil's laws covering copyright issues 
are considered adequate; the principal problems are enforcement and 
criminal prosecution.  Brazilian law enforcement agencies operate as 
professional units with substantial capabilities.  Brazil's customs 
service is heavily engaged in combating piracy and is upgrading its 
intelligence gathering and analysis, infrastructure and personnel 
capabilities.  However, in all these units, many individuals have 
not been adequately trained in the specialized area of IP crimes, 
particularly in geographic areas with less concentrated piracy 
activity.  A lack of effective, institutional coordination between 
Brazilian law enforcement agencies has also further complicated and 
undermined attempts to mobilize Brazilian law enforcement to combat 
piracy in a comprehensive manner. 
 
¶11. Border controls:  Brazil's customs service has the ability to 
block and intercept pirated products, and is seeking greater 
latitude in handling seized goods.  Due to the sheer volume, 
however, Brazil's 16,886 km land border has been an area of 
particular weakness in the country's copyright and trademark 
enforcement.  Once the border is penetrated, movement of pirated 
goods throughout Brazil is hard to deter.  There is evidence that as 
the border with Paraguay is better enforced, pirated goods are now 
crossing the remote western and northern areas bordering Colombia, 
Venezuela, and Guyana as well as arriving by sea to the Northwest 
(reftel C). 
 
¶12. Government-Industry Cooperation: Cooperation between the 
government enforcement agencies and the private sector has improved 
substantially in the last two years through their collective efforts 
within the CNCP and creation of a national anti-piracy plan. 
 
¶13. Effective International Cooperation:  Brazil is a signatory to 
WIPO and GOB officials have participated in IPR enforcement 
seminars, including a recent seminar in Asuncion.  Representatives 
of various GOB states and other entities are slated to attend an IPR 
enforcement seminar in Lima in July.  Additionally, the executive 
secretary of the CNCP attended a USPTO sponsored IPR enforcement 
 
SIPDIS 
program in Alexander, Virginia this June.  In November, 2006, USPTO 
detailed a patent attorney to Sao Paulo to serve as IPR Attache.  He 
works closely with the Brazilian patent agency, INPI. 
 
 
BRASILIA 00001105  003 OF 005 
 
 
¶14. Public Awareness:  The GOB and various companies have sponsored 
public awareness campaigns.  The CNCP - with support of the Union of 
Customs Employees and the National Confederation of Industry - 
launched a major anti-piracy campaign in 2006 to raise public 
consciousness about piracy and contraband in Brazil and emphasize 
the importance of intellectual property protection.  This program 
was aimed at the 16 - 24 year old age group, found by a 2005 U.S. 
Chamber sponsored survey to be the largest group of consumers of 
pirated goods.  Campaign organizers carry their message to schools 
and universities and sponsor anti-piracy messages in both print and 
broadcast media.  They also distribute fliers, t-shirts, buttons, 
bumper stickers, caps, and textbooks bearing their distinctive 
anti-piracy logo. 
 
¶15.  The "Creativity in Combating Piracy," award is part of this 
campaign and is sponsored by a Brazilian consultancy in connection 
with the U.S. Chamber of Commerce, NIKE, the Motion Picture 
Association and a Brazilian state owned bank.  It targets university 
students and is intended to promote leadership, social 
responsibility and awareness of the causes and impacts of piracy. 
 
¶16. Senior-level Engagement by Public Officials:  GOB IPR 
enforcement typically involves two ministries:  the Finance Ministry 
(Customs and Tax Authority) and the Ministry of Justice (Federal 
Police and Federal Highway Patrol).  Through the CNCP (which is 
overseen by the Vice Minister of Justice), the Ministry of Justice 
coordinates interagency IPR enforcement activities and state level 
authorities, who often have primary jurisdiction.  In turn, the 
Division of Intellectual Property at the Ministry of Foreign Affairs 
(MFA) is involved in these efforts and liaises with international 
actors.  Several Brazilian states - notably Rio de Janeiro, Sao 
Paulo, Rio Grande do Sul and, most recently, Bahia - have formed 
state level anti-piracy groups. 
 
III. Project criteria and metrics 
 
¶17. Targeted U.S. priorities:  Brazil accounts for the largest 
estimated trade losses due to piracy in the hemisphere - over $927 
million according to a recently updated IIPA report, yet arrest and 
incarceration figures remain difficult to obtain and appear dismally 
low in relation to the scope of the piracy problem.  This project 
directly targets the main problem areas in Brazil of law enforcement 
and criminal prosecution. 
 
¶18. Strong support of host government:  The Brazilian government has 
committed to combating piracy in a systematic and sustainable manner 
through establishment of the public-private National Anti-Piracy 
Council (CNCP), adoption of a 99 point national action plan, and 
annual reports on anti-piracy activities.  The GOB has been prompted 
by a need to combat piracy because of the harm it causes Brazil 
through increased criminality, lost tax revenues, increased 
unemployment in the formal economy, economic damage to Brazilian 
artists, and the country's international image.  The creation of a 
working intellectual property rights division at the Ministry of 
External Relations is also indicative of the GOB interest in 
controlling the problem. 
 
¶19. Addresses key gap in, or is a fundamental part of, a strategy to 
improve IPR enforcement in a country/region:  The underlying concept 
of the workshop is to bring together law enforcement and judicial 
officials, along with NGOs engaged in anti-piracy efforts, in order 
to improve the lines of communication between those on the ground 
fighting piracy and those tasked with prosecuting.  Of primary 
importance for any effective anti-piracy effort within the Brazilian 
social and institutional context is the creation of networks that 
allow for permanent, voluntary and routine communication. In 
particular, the increased piracy activity and chronic corruption 
among some officials coupled with a perceived lack of attention to 
piracy activities in the state have made training and the creation 
of an anti-piracy network in Pernambuco a critically high priority 
(reftel C).  This project would help close that gap. 
 
¶20. Has the capacity to achieve near term, measurable success, with 
clear metrics:  We would expect to see the establishment of formal 
or informal working groups or teams, comprised of the all the 
relevant law enforcement and perhaps judicial officials in 
Pernambuco, shortly after completion of the training program.  As a 
next phase, we would monitor the success of these teams, looking for 
increases in actions taken, such as number of raids, seizures, 
arrests, and convictions; in instances where data may not have 
historically been gathered, a baseline would have to be determined. 
 
¶21. Has strong project oversight, accountability measures, and 
interagency support:  The Department of Homeland Security within 
Embassy Brasilia will participate in the program and assess its 
 
BRASILIA 00001105  004 OF 005 
 
 
strengths and weaknesses on an on-going basis.  DHS works 
extensively with the GOB on piracy related issues and has the 
capability to assess both the program elements and the quality of 
GOB participation.  In addition to DHS backing, Mission has worked 
closely with the regional USPTO IPR Attache who also supports this 
proposal. 
 
¶22.  Course Outline 
 
Purpose:  To train professionals from a variety of public law 
enforcement and judicial organs in Pernambuco to detect, prevent, 
and punish intellectual property violations. 
 
General Goals: 
(1) to create the critical mass necessary to strengthen the capacity 
of the Brazilian government to enforce intellectual property laws; 
(2) to train and motivate public officials to identify which 
intellectual property laws can be applied within their jurisdiction 
and capacity; and 
(3) to facilitate informational exchange among various enforcement 
organs so that they can coordinate anti-piracy efforts at the 
national level, mirroring the highly-effective organizational 
structure of those groups practicing piracy. 
 
Specific Goals: 
Participants of the workshop will: 
(1) understand the organization and modus operandi of the criminal 
groups practicing piracy; 
(2) be familiar with the pertinent legislation; 
(3) know how to identify illegal reproductions; and 
(4) understand the importance of constantly updating their operating 
methods to keep up with the advances in technology applied by 
pirates. 
 
Teaching Tools and Methods: theoretical training; workshops; case 
studies; and site visits. 
 
Syllabus:  16 hours 
 
Module 1: Piracy: An overview 
Students will be trained to understand the basic principles of the 
penal and procedural code, as well as specific IP laws, they apply 
to piracy. 
 
Module 2: Analysis of Existing IP Legislation 
Students will learn which elements of existing legislation can be 
applied to which modes of piracy. 
 
Module 3:  Technology 
Students will become familiar with the technology used in 
disseminating legally-protected works and how they can be 
protected. 
 
Participants: 
Class size: 35 
Location:  Courses will be held in the State of Pernambuco. 
Participants will be selected from throughout Pernambuco, from 
Offices of the Public Prosecutor, the Federal Highway Police, the 
Military Police, the Civil Police, Scientific Police; Federal Tax 
Authority.  Consideration is given to their potential as training 
multipliers within their organizations. 
 
Co-Participating Institutions:  To provide the broadest possible 
perspective, ADEPI conducts the course in cooperation with other 
entities dedicated to protecting intellectual property, including 
ABC (Brazilian Cinematographic Association), UBV (Brazilian Video 
Union),APDIF (Association for the Protection of Phonographic 
Intellectual Property), and BSA (Business Software Alliance).  These 
organizations recommend and/or provide instructors in their specific 
areas; provide the latest information on technology and 
best-practice enforcement methods, and arrange site visits. The 
conference site is to be provided by government authorities, as has 
been customary with ADEPI programs.  Each training session will 
incorporate USG participation by including instructors from DHS and 
other relevant law enforcement offices from within the U.S. Mission 
in Brazil and/or from Washington. 
 
Expenses (for a class of 35, in U.S. dollars): 
Airfare for students to central location: $12,500 
Airfare for USG instructors (max.3):      $ 3,600 
Per diem for instructors:                 $ 3,000 
Simultaneous interpretation:              $ 3,600 
Hotel and Meals for students:             $15,000 
Class materials:                          $ 2,700 
Incidentals/coffee and water:             $ 1,000 
 
BRASILIA 00001105  005 OF 005 
 
 
Ground transportation:                    $ 1,250 
Data show:                                $ 1,250 
TOTAL:                                   $43,900 
 
Sobel