VZCZCXYZ0012
OO RUEHWEB

DE RUEHC #1988 0081942
ZNR UUUUU ZZH
O 081941Z JAN 08
FM SECSTATE WASHDC
TO AMEMBASSY PRAGUE IMMEDIATE 7244

UNCLAS STATE 001988 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR EZ
SUBJECT: 2007 SPECIAL 301 CZECH REPUBLIC OCR RESULTS 
 
REF: PRAGUE 849, PRAGUE, 1228, STATE 1484761 
 
¶1. This is an ACTION REQUEST.  The USG Special 301 Committee has 
concluded its deliberations regarding the Czech Republic's status on 
the Special 301 list following the Out-of-Cycle Review (OCR).  The 
Office of the U.S. Trade Representative (USTR) will announce that the 
Czech Republic has been placed on the Special 301 Watch List. Post is 
requested to use the information in Paragraph 4 to provide the host 
government with advance notice of the conclusion of the review and of 
the impending announcement. Post may leave behind the points in 
paragraph 4 as a non-paper.  Washington prefers that points be 
delivered orally/in person. END ACTION REQUEST. 
 
BACKGROUND 
¶2. Each Spring USTR issues the Special 301 Report to identify 
countries that deny adequate and effective protection of intellectual 
property rights or deny fair and equitable market access to U.S. 
persons who rely on intellectual property protection.  The USG 
Special 301 Committee conducted an OCR for the Czech Republic before 
the start of the regular 2008 annual review. 
 
¶3. The Spring 2007 decision to conduct an OCR for the Czech Republic 
was intended to provide time for the Czech Government to demonstrate 
concrete improvements to its IPR regime, especially with respect to 
copyright and trademark enforcement, to avoid a Special 301 Watch 
List designation.  In the 2007 Special 301 Report released in April 
2007 and in subsequent interactions with the Czech Government, the 
USG noted its concern with the rapidly growing open-air border 
markets selling large volumes of pirated and counterfeit goods. 
 
ISSUES TO DISCUSS 
¶4. Special 301 results for the Czech Republic:  We request that 
Embassy Prague raise the following in its discussion with host 
government officials. 
 
-- The USG has completed its IPR Out-of-Cycle Review and has decided 
to put the Czech Republic on the Special 301 Watch List for 
inadequate IPR enforcement at the border markets.  USTR is set to 
announce this decision on the USTR website during January 2008.  The 
Czech Republic's status on the Watch List will take effect 
immediately upon the announcement by USTR. 
 
-- The Czech Republic narrowly missed being placed on the Watch List 
in April 2007, despite strong pressures from U.S. industry.  The 
decision was based on USG assessment that the Czech Government must 
be given an opportunity to make significant progress in addressing 
IPR violations at the border markets. 
 
-- Since April 2007, the USG has been monitoring Czech progress in 
reducing the sale of pirated and counterfeit goods at its border 
markets over the past nine months.  Despite taking some steps, 
including the formulation of an IPR Action Plan, the Czech Government 
has not meaningfully implemented the Action Plan nor reduced the sale 
of pirated and counterfeit goods available at these markets.  The IPR 
violations at the border markets originally noted by the recording 
industry continue relatively free from prosecution and deterrent 
sentencing, and therefore, the border markets have grown in size and 
prominence. 
 
-- The Czech Government needs to do more than simply play a 
high-level coordination role.  The U.S. Government believes the Czech 
Government should take more ownership of the issue in order for the 
IPR Action Plan to be implemented quickly and effectively.  The U.S. 
Government presented a suggested action plan to the Czech Government 
that included steps necessary to combat piracy and counterfeiting at 
the markets, and provided comments to the Czech Government on its own 
action plan to strengthen it and address all areas needing 
improvement. 
 
-- As the 2008 annual review begins, we urge the Czech Government to 
submit a statement for the Special 301 review.  The due date for 
government submissions to USTR will be February 29, 2008.  In this 
submission, it would be useful to the U.S. Government if the Czech 
Government can describe progress it has made to implement the 
elements of its October 3, 2007 Action Plan. 
 
-- We also encourage the Czech Government again to consider some 
additional elements from the U.S. Government plan submitted in May 
2007, as discussed in our October meeting.  Specifically, we would 
like to see (1) an increased/sustained enforcement presence at the 
markets, (2) landlord liability legislation and revocation of 
business licenses for IPR violators, and (3) concrete timelines for 
implementation of the items in the action plan. 
 
-- The U.S. Government remains open to convening a videoconference 
with the Czech Government or meeting in person (if possible in 
Washington, D.C.) to discuss the Watch List designation and our 
expectations for the upcoming 2008 Special 301 annual review.  The 
April 2008 Special 301 Report will be an opportunity for the Czech 
Republic to be removed from the Watch List, and the United States is 
ready to work together with the Czech Republic towards that goal. 
RICE