VZCZCXRO9994
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #3153/01 2610527
ZNR UUUUU ZZH
O 180527Z SEP 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8295
INFO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
RUEAWJB/USDOJ WASHDC IMMEDIATE
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHIN/AIT TAIPEI IMMEDIATE 1557

UNCLAS SECTION 01 OF 02 MANILA 003153 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EAP/MTS, EAP/EP, AND EB/IFD 
DEPT FOR EB/IPC 
STATE PASS USTR FOR DKATZ AND RBAE 
STATE ALSO PASS USAID, OPIC, USDA 
TREASURY FOR OASIA 
USDOC FOR 4430/ITA/MAC 
USDOC PASS USPTO 
BANGKOK FOR FCS JENNIFER NESS 
STATE ALSO PASS LOC 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON EINT RP
SUBJECT:  USTR Focuses on Broadcasting and Medicines 
 
 
¶1. (SBU) Summary.  Director for Southeast Asia and Pacific Affairs 
David Katz and Director of the Office of Innovation Rachel Bae, both 
from the office of the U.S. Trade Representative, discussed 
bilateral trade issues in Manila on September 3-4.  The two major 
issues discussed were cable television piracy and legislation on 
pharmaceuticals.  Moves are underway within the Philippine 
government to reverse a decision by the Department of Justice that 
commercial broadcasts do not have copyright protection.  Legislation 
on pharmaceutical prices is likely to pass congress given the 
political climate in the run-up to the 2010 presidential campaign. 
U.S. pharmaceutical interests have understood that they will need to 
work to minimize damage, as they will not be able to defeat the 
legislation a second time.  End summary. 
 
Defending Copyright for Broadcasters 
-------------- 
 
¶2. (SBU) Katz and Bae met John Medeiros, the executive director of 
the Cable and Satellite Broadcasting Association of Asia.  Medeiros 
updated them on the status of an ongoing cable piracy case in 
Cotabato City in Mindanao.  The Department of Justice approved of 
the filing of criminal copyright infringement cases against several 
rural cable television systems for distributing content from 
broadcasters without obtaining a license or paying royalties.  The 
operators successfully petitioned Secretary of Justice Raul Gonzalez 
to rule that the Philippine Intellectual Property Code does not 
grant copyright protection to broadcasters, opening the door to the 
dismissal of the cases. 
 
¶3. (SBU) Medeiros said the situation is deteriorating, with the 
chair of the Federation of International Cable Television 
Associations of the Philippines publicly urging cable companies not 
to pay royalties to content providers.  Medeiros noted that the 
Association is facing pressure from member organizations to 
publicize the case. 
 
¶4. (SBU) EconCouns, Katz, and Bae raised the cable piracy issue with 
Senior Undersecretary of Justice Ernesto Pineda.  Pineda's staff had 
already drafted a reversal of Gonzalez's statement, but it requires 
the Secretary's signature to be effective.  Pineda agreed to have 
the Justice Department lawyers in Cotabato City object to efforts to 
dismiss the cases on the basis of Gonzalez's decision.  Post learned 
subsequently that a September 4 hearing was postponed when the judge 
in Cotabato City did not appear. 
 
Twenty Cheaper Medicine Bills and Counting 
-------------- 
 
¶5. (SBU) During the last Congress of 2004-2007, Senator Mar Roxas 
proposed a bill to reduce the price of prescription drugs by 
reducing the scope of patent protection for pharmaceuticals and 
allowing parallel importation.  In the newly-elected Congress, 
around twenty such bills have been introduced, including Roxas' 
bill.  Many of these bills are similar to the Roxas bill.  Others, 
however, propose populist measures such as price controls on 
prescription drugs and restrictions on the advertisement of 
pharmaceuticals. 
 
¶6. (SBU) Edwin Feist and Leo Wassmer of the Pharmaceutical and 
Health Care Association of the Philippines argued that the Roxas 
Bill has unacceptable provisions on parallel importation and 
international patent exhaustion.  While the drug industry favors a 
less interventionist bill proposed by Rep. Ronaldo Zamora, Feist and 
Wassmer acknowledged that if those sections were changed, the 
industry could live with the Roxas legislation. 
 
¶7. (SBU) Katz and Bae also met with Representatives Junie Cua, a 
former chair of the Trade and Industry Committee and House sponsor 
of the Roxas bill, and Antonio Alvarez, Cua's successor as chair. 
They both believe that time needs to pass and passions cool before 
Congress can consolidate all the bills into a single piece of 
consensus legislation.  Cua and Alvarez both see strong momentum 
that suggests a pharmaceuticals bill will pass. 
 
WIPO Internet Implementation 
-------------- 
 
¶8. (SBU) Katz and Bae raised the need for legislation to implement 
 
MANILA 00003153  002 OF 002 
 
 
the WIPO Internet Treaties, which the Philippines ratified in 2002. 
Senator Edgardo Angara has introduced such legislation, though it 
still lacks a sponsor in the House.  Congressmen Cua and Alvarez 
observed that once members of Congress understand that implementing 
the Internet treaties sends a signal internationally, the bill will 
pass.  Cua added that Juan Angara, the senator's son, was elected to 
the House in May and could potentially co-sponsor his father's bill. 
 
 
¶9. (SBU) Val Palanca, a Trade and Industry Committee staffer, 
pointed out that one sticking point was that a number of legislators 
who follow internet issues are concerned with WIPO provisions that 
potentially criminalize the temporary downloading of copyrighted 
material into the random access memory of a computer.  He warned 
that a final Philippine bill may deal with this issue differently 
than the WIPO Treaties. 
 
Developments at the Optical Media Board 
--------------- 
 
¶10. (SBU) Katz and Bae met with Eduardo Manzano, chairman of the 
Optical Media Board.  Manzano discussed efforts to make Board 
licensing procedures more sophisticated by examining the supply and 
sales contracts of license applicants and looking for 
inconsistencies.  He noted that the year's target for seizures has 
already been met.  His agents made 29 arrests during July and 
August, and in addition to optical media piracy enforcement, have 
begun to cooperate with the Philippine National Police to charge 
under indecency laws those it has discovered trafficking in child 
pornography. 
 
The Intellectual Property Office 
-------------- 
 
¶11. (SBU) Katz and Bae met with Intellectual Property Office 
Director General Adrian Cristobal to review ongoing initiatives. 
Cristobal said that he faced the challenge of tracking intellectual 
property cases around the country, as his office continues to 
struggle to obtain data.  He believes the commonly cited figures of 
550 active IPR cases in the Philippine court system and one IPR 
conviction to date in 2007 are understated.  In addition, these 
figures exclude cases that are settled out of court, as most cases 
are. 
 
Comment 
------- 
 
¶12. (SBU) A handful of issues will dominate the IPR dialogue for the 
rest of the year.  It is encouraging that the pharmaceutical 
industry is finally giving serious thought to what it can accept in 
pharmaceutical legislation. Both they and we will be fighting a 
difficult battle to clean out bad provisions from the legislation as 
it moves forward. 
 
¶13.  (SBU) The Secretary of Justice's decision that copyright laws 
do not cover broadcasts is a bad precedent that endangers IPR 
protection.  We are encouraged that the Philippine government 
understands it needs to set the matter straight and seems to be 
moving toward reversing the decision. 
 
KENNEY