VZCZCXRO1544
PP RUEHRG
DE RUEHBR #0130/01 0251839
ZNR UUUUU ZZH
P 251839Z JAN 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 0921
INFO RUEHSO/AMCONSUL SAO PAULO 1512
RUEHRI/AMCONSUL RIO DE JANEIRO 5725
RUEHRG/AMCONSUL RECIFE 7637
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 06 BRASILIA 000130 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/TPP/IPE JENNIFER BOGER 
DEPT PASS USPTO 
DEPT PASS USTR FOR KATHERINE DUCKWORTH AND JENNIFER CHOE GROVES 
USDOC FOR ITA/MAC/OIPR CASSIE PETERS 
USDOC FOR ITA/MAC/WH/OLAC/MCAMPOS 
 
E.O. 12958:  N/A 
TAGS: KIPR ETRD ECON BR
SUBJECT: BRAZIL: USTR OCR MEETING WITH GOB OFFICIALS 
 
REF: A) State 107819; B) Brasilia 1620; C) Brasilia 680; D) Brasilia 
2813 E) Brasilia 2038 F) Page e-mail 1/17/08 
 
¶1. (SBU) Summary and Introduction:  On January 15, Deputy Assistant 
United States Trade Representative (DAUSTR) Chris Wilson and 
delegation met privately with Hadil Vianna, Director for Scientific 
and Technical Affairs (DCT) at the Ministry of External Relations 
(MRE) and later with members of the GoB's Inter-Ministerial Group on 
Intellectual Property (GIPI), which Vianna chairs, to discuss USTR's 
ongoing Special 301 Out-Of-Cycle Review (OCR) of Brazil's IPR 
practices.  Vianna emphasized overall "excellent" USG-GOB relations 
and said he hoped the IP dialogue would be equally positive.  He 
noted increased Brazilian public awareness of IPR issues, but said 
many in the GoB do not feel the USG has sufficiently recognized 
Brazilian IPR efforts.  He added that the GoB does not recognize its 
inclusion on any intellectual property (IP) violators list (such as 
the Special 301 or the EU's similar listing). 
 
¶2. (SBU) The meeting was well-attended by representatives of the 
Inter-Ministerial group (GIPI) and a variety of copyright and patent 
issues were addressed. Otavio Brandelli, Chief of the Division of 
Intellectual Property at the MRE, noted a new emphasis by the 
National Council to Combat Piracy (CNCP) on targeting demand for 
pirated goods and said CNCP members had not raised internet piracy 
as an issue.  Vianna added that, despite low internet penetration 
rates, the GoB takes internet piracy seriously, having raised it at 
the last Internet Governance Forum (IGF) meeting.  Brandelli also 
described a new CNCP legislative proposal that would, among other 
initiatives, streamline the destruction process of seized 
contraband.  Deputy CNCP Executive Secretary Ana Lucia Soares 
reported a decrease in demand for pirated goods in the country's 
lower-income northeastern region.  Representatives for the Receita 
Federal (Brazilian IRS/Customs), the Rodoviaria Federal (Brazilian 
Federal Highway Patrol), the Brazilian Federal Police and the 
Ministry of Agriculture reported ongoing modernization and training 
efforts as well as enforcement activities.  All except Rodoviaria 
reported an increase in contraband seizures.  An official from the 
National Health Vigilance Agency (ANVISA - the Brazilian FDA 
equivalent) described Brazil's ongoing battle against counterfeit 
medicine and outlined future ANVISA efforts in this area. 
 
¶3. (SBU) Regarding U.S. concerns about textbook copying, Marcos 
Alves de Souza, General Coordinator for Copyrights at the Ministry 
of Culture, said the GoB is exploring use of a collective management 
system (including internet sales) or taxes on media and reproductive 
machines to ensure remuneration of rights holders.  A National 
Institute of Industrial Property (INPI) spokesperson said INPI had 
increased human resources to address its patent backlog and was 
implementing the e-MARCAS registration system.  Brandelli called the 
compulsory licensing of the Merck anti-retroviral drug Stocrin an 
"unusual event" in Brazilian history that took place after all 
negotiations had failed, and insisted that the action was TRIPS 
compliant.  An ANVISA representative defended his agency's handling 
of data package protection.  End Summary and Introduction. 
 
¶4. (SBU) On January 15, Deputy Assistant United States Trade 
Representative (DAUSTR) Chris Wilson and delegation met privately 
with Hadil Vianna, Director for Scientific and Technical Affairs 
(DCT) at the Ministry of External Relations (MRE) prior to meeting 
with members of the GoB's Inter-Ministerial Group on Intellectual 
Property (GIPI), which Vianna chairs, to discuss USTR's ongoing 
Out-Of-Cycle Review (OCR). GIPI includes representatives from the 
Ministries of Science and Technology; Justice; Health; Culture; 
Environment; Agriculture; External Relations; Development, Industry 
and Trade; and a representative of the President's office, Casa 
Civil, as well as INPI and ANVISA.  All GIPI members were 
represented at the meeting except for the Ministry of the 
Environment and Casa Civil.  (Comment:  The large turnout for the 
meeting appeared to signal a keen GoB interest in dialogue with USTR 
about GoB IPR enforcement efforts. End Comment.) 
 
------------------------- 
Meeting with Hadil Vianna 
------------------------- 
 
¶5.  (SBU) Vianna told Wilson he believed that overall relations 
between the USG and GoB are excellent and that he hoped the IP 
dialogue would be equally positive.  He observed that many in the 
GoB do not feel the USG has sufficiently recognized its anti-piracy 
efforts.  Vianna added that the GoB does not recognize its inclusion 
on any IPR violators' list (such as the Special 301 or the EU 
"Blacklist"), but understands that it is a USG prerogative to 
maintain such a list.  He cautioned that the GoB avoids public 
discussion on the Special 301 process to prevent creation of a 
 
BRASILIA 00000130  002 OF 006 
 
 
detrimental public atmosphere towards IPR. 
 
¶6.  (SBU) Vianna said a large investment of both time and resources 
in the Brazilian IPR effort had led to an unprecedented increase in 
public IPR awareness in Brazil, including increased media coverage. 
In addition, Vianna pointed out that IP issues have appeared in 
Brazilian soap operas, with the villain portrayed as an IPR 
violator.  During the meeting, he also solicited USG support for the 
Brazilian candidate for the World Intellectual Property Organization 
(WIPO) presidency. 
 
¶7.  (SBU) Wilson emphasized to Vianna that the purpose of his visit 
was to learn more about the GoB intellectual property regime and 
stated that the GoB was "not on trial" during the OCR process.  He 
referenced the GoB position on IPR in international fora as often at 
odds with the USG position and signaled USG interest in discussing 
these issues with the GoB in advance of international meetings in 
order to enhance communication.  In reference to Vianna's call for 
USG support for the Brazilian WIPO candidate, Wilson relayed that 
the USG was preparing to consider candidates for the position. 
 
--------------------- 
OCR Meeting with GIPI 
--------------------- 
 
¶8.  (SBU) Wilson acknowledged to GIPI agency representatives that he 
realized the Special 301 process as a point of contention, but said 
his objective was to work on IP issues with the GoB in a spirit of 
cooperation.  He applauded the efforts of the GoB's National Council 
to Combat Piracy (CNCP) and cited it as an example of a successful 
public-private partnership that is frequently referenced as an 
example to other countries. 
 
-- National Council to Combat Piracy (CNCP) 
 
¶9. (U) Otavio Brandelli, Director of the Division of Intellectual 
Property at the MRE (a member of CNCP) said CNCP was preparing to 
move beyond its focus on controlling the supply of pirated goods 
into a second phase addressing demand.  To accomplish this, he said, 
CNCP activities will include an intensified GoB anti-piracy consumer 
educational program, efforts to promote reform of the Brazilian tax 
system, and cooperation with industry to make authentic products 
available to consumers at a more reasonable price. CNCP plans to 
evaluate and revise its National Anti-Piracy Plan beginning in 
February 2008. 
¶10.  (SBU) Deputy CNCP Executive Secretary Ana Lucia Soares said 
that more consumers now understand the link between piracy and 
organized crime as a result of CNCP educational activity (which is 
designed to demonstrate the impact of piracy on the Brazilian 
consumer).  She reported a drop in piracy rates in Brazil's 
lower-income northeastern provinces as a result of stepped-up 
enforcement and consumer education campaigns.  (Note: ConRecife 
notes that enforcement is highly visible in the press and the local 
police have complained to PO about a lack of storage space for 
confiscated media (ref F). End Note.) She also reported that in 2007 
the first municipal-level anti-piracy commission was created in 
Blumenau. 
 
-- Enforcement Activities 
 
¶11.  (SBU) Frederico Vasconcellos, Head of the Division on Combating 
Contraband and Customs Evasion at Receita Federal (Brazilian 
IRS/Customs) said that the GoB was working on improvements in its 
customs control strategies, including expansion of international 
cooperation, increased training for customs officers and additional 
investment in new equipment and facilities.  Receita statistics 
indicated a 2007 increase in seizures of smuggled goods (pirated 
items were not listed separately from other contraband).  Brazilian 
legislation now allows for the seizure of buses and vehicles 
involved in smuggling.  He presented photographic evidence of dozens 
of seized buses and vehicles that were to be donated to Brazilian 
state and local governments.  According to him, smugglers are now 
seeking alternative routes to the Foz De Iguacu crossing from 
Paraguay, mostly through the southeast, and the Brazilian 
authorities have thus far been unable to address this new 
development. 
 
¶12.  (SBU) Jetson da Silva, an official from the Rodoviaria Federal 
(Brazilian Federal Highway Patrol) said his organization, which 
oversees 61,000 km of federal highway, has conducted CNCP-assisted 
anti-piracy interdiction training programs for its officers and held 
 
BRASILIA 00000130  003 OF 006 
 
 
educational campaigns in schools.  Rodoviaria seizure data indicated 
a drop in 2007, which the official attributed to use by smugglers of 
secondary roads not frequented by his organization.  According to a 
Brazilian Federal Police Official, his agency has formulated both a 
national and international strategic cooperative plan.  He said the 
Federal Police have begun efforts to fight internet piracy, 
including modernization of outdated equipment and training of a 
cyber crime unit, and was interested in exchanging technology and 
information with other countries in this area. 
 
¶13.  (SBU) Helinton Rocha, the Ministry of Agriculture's Director of 
the Department of Intellectual Property and Agriculture Technology 
discussed Brazil's biosafety and seed laws and described inspection 
and seizure activities.  In 2007, the Ministry conducted 3,157 
inspections of soybean seed lots and found 373 questionable lots 
which resulted in fines on the culpable parties.  Out of 606 cotton 
and corn inspections, 36 were found to be questionable and resulted 
in penalties assessed on the owners.  Fines of up to R$1.5 million 
were issued, with an average of R$250,000. 
 
-- Legislation 
 
¶14.  (SBU) Brandelli said proposals included in a new CNCP sponsored 
bill would, for example, streamline the destruction process of 
seized contraband. He added that this legislative proposal has been 
undergoing due process for a number of months and, once done, will 
be presented to the Brazilian Congress.  According to Brandelli, 
CNCP is also assisting other states with formulation of anti-piracy 
statutes. (Note:  This legislation will also expand vehicle seizure 
authority and allow law enforcement agencies to retain only samples 
for use in litigation.  It also provides different penalties for 
individual offenders from those involved in larger operations; 
incorporates penalties for software copyright violation into the 
penal code; and stiffens penalties if pirated goods are imported 
(see reftel D).  End Note.) 
 
-- Counterfeit Medicine 
 
¶15.  (SBU) Maristela Figueiredo, Health Regulation and Surveillance 
Specialist at the National Health Vigilance Agency (ANVISA - the 
Brazilian FDA equivalent), said counterfeit medicines remained a 
problem in the country, although to a much lesser extent than in the 
past.  In 1997-98, there were a reported 172 cases of counterfeit 
medicines; while in 2006-07, there were only 17.  Figueiredo noted 
the sudden increase in counterfeit drugs from 1997-98 led to the 
passage of a 1998 law providing for stiffer penalties for drug 
counterfeiters (10-15 years without parole or amnesty plus a fine) 
and served as the impetus for the creation of ANVISA in 1999.  GoB 
regulations now call for usage of secure drug packaging and a 
distributors' registry.  ANVISA serves as the clearinghouse for 
information on counterfeit drugs provided by a nationwide 
notification network of 160 sentinel hospitals (known as Notivisa), 
and state health vigilance units (VISAs). 
 
¶16.  (SBU) According to Figueiredo, future plans to combat 
counterfeit medicine include closer coordination with Mercosul 
partners, strengthening legislation, and implementing a more 
thorough drug registry database that would facilitate tracking 
counterfeit drugs to the end user.  She also cited the need for more 
training of Federal judges, who often do not take counterfeit drug 
cases as seriously as illegal drug cases, although both have similar 
penalties.  Figueiredo stated that 130 Federal, State, and Municipal 
level inspectors had been trained.  (Note: Figueiredo later told 
EconOff that ANVISA has an internal division that trains state and 
municipal agents to conduct inspections for counterfeit medicines. 
ANVISA, in conjunction with Receita, has participated in seminars on 
counterfeit medicines conducted by the private industry group 
National Forum to Combat Piracy (FNCP) and Public Ministries in 
states throughout Brazil.  ANVISA, which has previously concentrated 
on training enforcement officials, has recently made plans to 
address training of Federal judges.  End Note.) 
 
-- Internet Piracy 
 
¶17.  (SBU) Soares (CNCP) said that, although CNCP did not view 
internet crime in Brazil as a top priority due to low internet 
penetration rates in the country, CNCP has created a cyber-crime 
division.  Brandelli (MRE) stated that CNCP will address internet 
piracy once its members raise the issue, which they have not done 
thus far.  Vianna added that Brazil's low number of computers does 
not mean that the country is not concerned with internet crime.  He 
 
BRASILIA 00000130  004 OF 006 
 
 
noted that the GoB raised the issue at the Internet Governance Forum 
(IGF) Meeting in Rio de Janeiro in November 2007.  Wilson noted the 
importance of considering the emerging threat of Internet piracy and 
the need to "get ahead of the curve" with regard to this problem. 
 
-- Campus Copy-Shops 
 
¶18.  (SBU) Marcos Alves de Souza, General Coordinator for Copyrights 
at the Ministry of Culture, told Wilson that actual book piracy was 
rare in Brazil, but non-authorized copying of copyrighted works was 
common on university and college campuses.  He said this activity 
was not organized-crime related.  GoB believes that individuals have 
a right to access information and knowledge in the country, which is 
often difficult due to the high cost of books as a result of low 
production runs, according to Souza.  He noted that academic books 
are very expensive, despite the fact that there are no federal taxes 
imposed on these items.  Souza asserted that legal action by book 
publishers against professors and schools over illegal copying in 
2006 -2007 led to a public backlash against IP laws. 
 
¶19.  (SBU) Brazilian copyright law allows for small segments of 
copyrighted works to be reproduced, but does not define what 
constitutes a small segment (reftel D).  Souza said individual 
universities use in-house rules to police the amount of a 
publication that can be copied (ranging from 10 - 40 percent) or 
limit copies to numbers of chapters.  He relayed that the Ministry 
of Culture plans to hold a forum this year to allow input from a 
broad segment of society on the issue as it considers copyright law 
reforms.  He felt authors were due remuneration for their work and 
said some ideas being considered were a collective management system 
or a tax on blank media and reproductive machines that could be used 
to recompense authors.  The Ministry is also considering a system to 
allow small segments of books to be sold over the internet. 
 
-- Patents and Trademarks 
 
¶20. (SBU) Wilson noted that, while the USG has recognized Brazilian 
progress in the area of IPR enforcement, the U.S. remains concerned 
that progress has been less noticeable in areas related to patents, 
trademarks, and protection of pharmaceutical and agrichemical test 
data.  Wilson acknowledged that INPI has taken steps to address a 
considerable backlog in patent and trademark applications, and 
requested information on progress achieved to date.  He mentioned 
specifically the USG's ongoing questions about the unusual role of 
the Brazilian health regulator (ANVISA) in the process of 
considering pharmaceutical patents.  With regard to compulsory 
licensing of pharmaceuticals, Wilson noted that the USG has sought 
to approach this delicate issue in a measured way, but continues to 
stress the importance of full and transparent engagement between the 
GoB and patent holders.  Wilson also mentioned that the USG has 
questions and concerns with regard to Brazil's system of protecting 
data submitted in connection with the regulatory approval of 
pharmaceutical and agricultural chemical products. 
 
¶21.  (SBU) Gustavo Travassos Pereira, International Cooperation 
Advisor at the National Institute of Industrial Property (INPI) said 
his organization had formed a "dynamic partnership" with the U.S. 
Patent and Trademark Office (USPTO), which is providing training for 
INPI employees.  According to him, INPI has doubled its trademark 
processing staff over the last year and tripled its patent 
processing staff.  He also noted that INPI was in the final stage of 
implementation of the e-MARCAS system, which would allow for quicker 
trademark registration.  The ANVISA official stated that ANVISA 
reviews (required for patent applications on certain products, 
including medicines) take no more than 120 days with only a 3 
percent rejection rate per 2005 statistics. 
 
-- Compulsory Licensing 
 
¶22.  (SBU)  Leandro Teixeira, Health Regulation and Surveillance 
Specialist at ANVISA, said that after GoB ratification of TRIPS, the 
increased price of medicine impeded access to drugs for many 
Brazilians.  He said that the GoB feels TRIPS "can and should" be 
interpreted so as not to harm public health projects and provide 
access to medicines for all.  Brandelli called the compulsory 
licensing of the Merck anti-retroviral Stocrin an "unusual event" in 
Brazilian history and noted that the GoB has been obliged to provide 
HIV/AIDS victims free access to medications since 1986, and has 
76,000 such patients (while Thailand has 17,000).  He said that 
Brazil is one of the largest customers for these drugs, yet paid 
four times more for the drug than Thailand. 
 
BRASILIA 00000130  005 OF 006 
 
 
 
¶23.  (SBU) Without identifying Merck by name, Brandelli said 
negotiations between the GoB and the company had been transparent 
and failed to reach an agreement after six to seven months.  At that 
point, after the company decided not to negotiate further, the GoB 
issued the compulsory license.  He added that the drug's patent was 
one of over 400 that are considered pipeline patents, and, thus, it 
was already in the public domain when the patent was issued. 
Brandelli added that if the GoB had adhered to the letter of the 
TRIPS agreement, no patent would have been issued.  He said the 
company (Merck) has been in Brazil for many years and the compulsory 
license has not affected the company's relationship with the GoB. 
 
-- Data Package Protection 
 
¶24.  (SBU) In response to Wilson's question about industry 
allegations of lax data package protection, Teixeira  (ANVISA) 
replied that this data had not been used to violate any patent 
rights.  He added that TRIPS was ambiguous on this point and he felt 
the GoB was acting within the TRIPS agreement in its handling of 
data packages. 
 
------------------ 
Delegation Members 
------------------ 
 
¶24.  (SBU) Members of the delegations were: 
 
U.S. 
---- 
 
Chris Wilson, DAUSTR for Intellectual Property and Innovation 
 
Katherine Duckworth, USTR Director for the Southern Cone 
 
Dorian Mazurkevich, USPTO Attache, Consulate Sao Paulo 
 
Tim Hall, Economic Officer, Embassy Brasilia (notetaker) 
 
Brazil 
------ 
 
- Ministry of External Relations (MRE): 
 
Hadil da Rocha Vianna, Director of Department of Scientific and 
Technical Issues (DCT) 
 
Otavio Brandelli, Director of Intellectual Property Division (DIPI) 
 
Joao Carlos Beato Storti, Deputy Director, Intellectual Property 
Division (DIPI) 
 
Fabio Alves Schmidt da Silva, Intellectual Property Division (DIPI) 
 
- Ministry of Development, Industry and Trade: 
 
Sancia Regina Magalhaes Ferrari, Trade Analyst and Acting 
Coordinator-General of the Inter-Ministerial Group on Intellectual 
Property (GIPI) 
 
Carlos Alberto Alves de Oliveira, Trade Analyst 
 
Jos Carlos Cavalcanti de Araujo Filho, Trade Analyst 
 
- National Institute of Industrial Property (INPI) 
 
Gustavo Travassos Pereira, International Cooperation Advisor 
 
- Ministry of Culture: 
 
Marcos Alves de Souza, General Coordinator for Copyrights (CGDA) 
 
Samuel Barichello Conceicao, Assistant to General Coordinator for 
Copyrights (CGDA) 
 
- Ministry of Agriculture: 
 
Helinton Jose Rocha, Director of Department for Intellectual 
Technology and Agricultural Technology (MAPA) 
 
Leontino Rezede Taveira, Department for Intellectual Technology and 
 
BRASILIA 00000130  006 OF 006 
 
 
Agricultural Technology (MAPA) 
 
Marcos Vinicius Leandro, Jr., Coordinator, Department for 
Intellectual Technology and Agricultural Technology (MAPA) 
 
Luis Eduardo Rangel, Coordinator, Department for Intellectual 
Technology and Agricultural Technology (MAPA) 
 
- Ministry of Health: 
 
Joao Carlos Azuma, Managing Director of Department of Regulatory 
Affairs 
 
Ana Maria Tapajos, Head of Technical Analysis Division, 
International Affairs Office 
 
Daniela Lucia Loiola, Advisor 
 
- Ministry of Justice: 
 
Ana Lucia Moraes Gomes, Acting Executive Secretary of the National 
Council to Combat Piracy (CNCP) 
 
- Ministry of Culture: 
 
Marcos Alves de Souza, General Coordinator for Copyrights 
 
Samuel Braichello Conceicao, Assistant General Coordinator for 
Copyrights 
 
- Receita Federal (Brazilian IRS/Customs): 
 
Frederico Emmanuel Vasconcellos, Head of the Division on Combating 
Contraband and Customs Evasion 
 
Jorge Luiz Alves Caetano, Coordinator of Research and Investigation 
 
- Federal Police: 
 
William Marcel Murad, Head of the Division on Combating Revenue 
Crime 
 
- Rodoviaria Federal (Brazilian Federal Highway Patrol): 
 
Jose Altair Gomes Benites, Officer 
 
Wellker Cesar Faria, Officer 
 
Jetson Jose da Silva, Officer 
 
- National Health Vigilance Agency (ANVISA): 
 
Erika Mattos da Veiga, Specialist on Health Regulation and 
Surveillance 
 
Leandro Teixeira de Morais, Specialist on Health Regulation and 
Surveillance 
 
Maristela Figueiredo de Almeida, Specialist on Health Regulation and 
Surveillance 
 
¶25.  (U) THE DELEGATION HAS CLEARED THIS MESSAGE. 
 
Sobel