VZCZCXYZ0005
PP RUEHWEB

DE RUEHEG #0348/01 0521529
ZNR UUUUU ZZH
P 211529Z FEB 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 8247
RUCPDOC/USDOC WASHDC PRIORITY 0383

UNCLAS CAIRO 000348 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA, EBB/BOGER 
USTR FOR GROVES AND MOWREY 
COMMERCE FOR 4520/ITA/ANESA AND USPTO 
 
E.O. 12958:  N/A 
TAGS: ECON ETRD KIPR EG
SUBJECT: 2008 Special 301 Review: Egypt 
 
REF: A. CAIRO 201 
 
     ¶B. STATE 9475 
 
Sensitive but Unclassified, not for Internet distribution. 
 
¶1.  (SBU) SUMMARY: Egypt has made incremental progress in 
the protection of Intellectual Property Rights during the 
last three years.  The GOE has worked with the private 
sector and USG to improve its system for granting 
pharmaceutical patents and increase enforcement against 
copyright pirates, winning praise from some private-sector 
stakeholders while leaving others discouraged at the pace 
of progress.  Some shortcomings in data protection and 
copyright enforcement remain.   We recommend that USTR move 
Egypt from the Special 301 Priority Watch List to the Watch 
List as the best way to press Egypt for further reform. 
END SUMMARY. 
 
¶2.  (U) Ref A provides our latest assessment of Egypt's 
progress on action items identified by USTR under the 
Special 301 Initiative and other issues cited in ref B. 
Following are additional updates as well as our views of 
the political and economic context influencing GOE IPR 
policy and the positions of private-sector stakeholders. 
 
---------- 
Background 
---------- 
 
¶3.  (SBU) USTR elevated Egypt to the Priority Watch List in 
2004 primarily as a result of the Egyptian government?s 
issuance of marketing approval for local manufacturers to 
produce patent-infringing copies of four U.S. 
pharmaceutical products.  At the time, the Pharmaceutical 
Research and Manufacturers of America (PhRMA) recommended 
that Egypt be named a Priority Foreign Country.  In 2005, 
the outgoing Minister of Health and Population authorized 
another local generic copy of an innovator drug based upon 
unauthorized reliance on confidential test data. 
 
¶4.  (SBU) Although GOE interpretation of the legal 
framework leaves open the possibility of more approvals 
based on unauthorized reliance on confidential test data, 
the current Minister of Health and Population, Hatem El 
Gabaly, has pledged not to permit this, and in fact we 
understand that the GOE has not granted marketing approval 
for unauthorized generic pharmaceuticals since 2005. 
Meanwhile, in the last three years the GOE has restructured 
its patent office, worked to clear a backlog of pending 
patent applications, improved the capacity of judicial and 
regulatory officials working on IPR issues, and otherwise 
strengthened its IPR regulatory regime and enforcement. 
 
¶5.  (SBU) The GOE has not changed its interpretation of its 
obligations to protect pharmaceutical test data under the 
Trade-Related Aspects of Intellectual Property Rights 
(TRIPS) agreement.  It continues to hold the position that 
data exclusivity and the principle of non-reliance are 
above and beyond GOE TRIPS obligations. USG officials have 
raised concerns about the GOE interpretation repeatedly in 
high-level meetings during the last three years, including 
discussions over the Trade and Investment Framework 
Agreement (TIFA) and, most recently, the November 2007 
meeting between Gabaly and USTR Schwab in Washington.  Data 
protection was expected to be one of the significant points 
of contention in negotiations over a free trade agreement, 
which the USG opted not to launch in the spring of 2006. 
 
¶6.  (SBU) After the USG retained Egypt on the Priority 
Watch List in 2007, Gabaly and Minister of Trade and 
Industry Rachid Rachid wrote the Embassy to protest that we 
had failed to recognize Egypt's improvements.  The GOE and 
USG increased engagement on IPR this year, including visits 
by GOE delegations in Washington and visits by USTR and 
U.S. Patent and Trademark Office (USPTO) officials to 
Egypt. 
 
--------------------------------------- 
Technical Assistance, Capacity Building 
--------------------------------------- 
 
¶7.  (U) Thanks in part to technical assistance provided by 
USPTO and USAID, the Egyptian Trademark Office is 
completing examination of applications in seven months, 
compared with 12 months previously, even though annual 
trademark applications have now more than doubled from 
7,553 in 2004 to 16,076 in 2007.  The GOE has taken 
advantage of training on topics such as patent and 
trademark examination, specialized pharmaceutical patent 
examination, Patent Cooperation Treaty application 
processing, industrial design examination, trademark 
examination, and digital age copyright issues, as well as 
judicial training in IPR law and enforcement. 
 
¶8.  (U) The Information Technology Industry Development 
Agency (ITIDA) reported in the GOE's Special 301 submission 
that it organized IPR legal training for 463 judges, 618 
public prosecutors, and 152 enforcement officers in 2007. 
 
¶9.  (SBU) Revisions of Book 4 of the IPR Law covering the 
protection of new plant varieties are now before the 
Cabinet for their review.  The revisions, drafted by the 
Ministry of Agriculture, are part of Egypt's efforts to 
join the International Union for the Protection of New 
Varieties of Plants (UPOV). The changes originated in an 
IPR committee led by the Prime Minister that is now 
considering further improvements to IPR laws. 
 
¶10.  (SBU) In addition, the Ministry of Trade and Industry 
is proposing the revision of 14 laws governing internal 
trade with the objective of keeping dangerous, counterfeit, 
and other illegal products out of the market. 
 
¶11.  (SBU) In another recent development, a committee to 
hear appeals of Patent Office decisions has been 
constituted and was scheduled to meet and hear appeals 
February 21. 
 
¶12.  (SBU) The GOE still appears unable to implement the 
120-day streamlined drug registration system in force in 
January 2007 for drugs carrying a US Food and Drug 
Administration (FDA) or European Medicines Agency (EMEA) 
approval.  Gabaly's senior adviser indicates that they are 
fully cognizant of this issue and would soon amend the 
process to speed up the registration period.  USAID is 
financing the training of three or four employees of the 
Ministry of Health at a USFDA program on drug registration 
in April in order to help maximize the data protection 
period.  In practice, the period begins at the filing date 
of drug registration application, and is therefore 
minimized by unnecessary delays in the approval process. 
 
----------------------------- 
Pharmaceutical Industry Views 
----------------------------- 
 
¶13.  (SBU) In its 2008 Special 301 submission, PhRMA 
recommended that Egypt be removed from the Special 301 
report altogether, stating that "Egypt has made significant 
efforts to improve its protection and enforcement of 
intellectual property in 2007."  PhRMA cited training of 
judges and patent examiners, modernizing the infrastructure 
of the Egyptian patent office, and appointment of new 
personnel in key functions.  PhRMA says it expects the GOE 
to conclude the processing of "mailbox" pharmaceutical 
patent applications by the beginning of this year. 
 
¶14.  (SBU) In a briefing at the Embassy, a PhRMA 
representative visiting from Washington praised the efforts 
of Gabaly to improve Egypt's IPR regime.  The PhRMA 
representative cautioned that Gabaly, who faces significant 
domestic pressure from Egyptian pharmaceutical producers 
and consumers, would disengage on IPR and relax IPR 
protection in Egypt if the USG and private-sector 
stakeholders failed to acknowledge Egyptian improvements in 
IPR protection.  He asked that the USG "not get ahead of 
industry" on the issue. 
 
---------------------------------- 
Copyright Industry and Enforcement 
---------------------------------- 
 
¶15.  (U) The International Intellectual Property Alliance 
(IIPA) recommended in its 2008 Special 301 submission that 
Egypt remain on the Priority Watch List, citing a lack of 
enthusiasm for "taking the steps necessary to eliminate 
piracy and foster legitimate growth of the copyright 
industries."  The IIPA noted climbing levels of music 
piracy and called for more vigorous enforcement against 
pirated entertainment software led by ITIDA.  However, the 
IIPA report also notes steadily decreasing business 
software piracy rates in the Egyptian market from 69% in 
2003 to 60% in 2007. 
 
¶16.  (SBU) The IIPA submission alluded to the case of the 
US game manufacturer EA, noting that the Egyptian company 
that pirated EA software continues to sell its products and 
that the Ministry of Culture has been reluctant to state 
that there is no legitimate basis for the Ministry's 
license to the pirate company.  Ministry officials have 
told us the license expired in summer 2007 and have given 
us their assurances that it will not be renewed, although 
the issue remains under review by the GOE. 
 
¶17.  (U) IIPA also noted that the Business Software 
Alliance (BSA) is satisfied with ITIDA activities.  ITIDA 
stated in its 301 submission that its IPR office assisted 
in the adjudication of 372 IPR cases through submission of 
expert reports to the courts and prosecutors in 2007. 
However, BSA noted concern over lingering uncertainty about 
enforcement authority.  The association argues that ITIDA 
should have enforcement authority, to the exclusion of the 
Ministry of Culture. 
 
¶18.  (SBU) Microsoft Egypt described its relations with 
Egyptian enforcement authorities as "fruitful and long- 
term" in a draft 301 submission (ref B).  Microsoft 
estimated that the GOE conducts 150 raids a month against 
software pirates. 
 
¶19.  (SBU) Egypt has not acceded to the WIPO internet 
treaties; however we understand that Egyptian IPR law and 
copyright provisions are largely consistent with the 
protections provided by the treaties.  The GOE made this 
argument as well in its Special 301 submission. 
 
¶20. (SBU) SUMMARY: We face significant challenges in 
improving IPR protection in Egypt.  At the same time, we 
agree with the judgments of PhRMA and Microsoft - the 
private-sector stakeholders who are working most actively 
to improve IPR in Egypt - that the IPR regime here has 
improved steadily, if slowly, during the last three years. 
The Priority Watch List has served to focus our engagement 
with the GOE during that time.  From our perspective, the 
issue before us is how to use Section 301, as Congress 
intended, to influence the GOE to accomplish more on IPR 
reforms.  We judge that the GOE would interpret as punitive 
a decision to keep Egypt on the Priority Watch List another 
year, and IPR protection in Egypt would suffer as a result. 
 
JONES