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Viewing cable 08BEIRUT333, LEBANON: 2008 SPECIAL 301 REVIEW

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Reference ID Created Released Classification Origin
08BEIRUT333 2008-03-05 07:24 2011-08-24 16:30 UNCLASSIFIED Embassy Beirut
VZCZCXYZ0000
PP RUEHWEB

DE RUEHLB #0333/01 0650724
ZNR UUUUU ZZH
P 050724Z MAR 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC PRIORITY 1190
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHDM/AMEMBASSY DAMASCUS 3691
RUEHEG/AMEMBASSY CAIRO 1286
RUEHAM/AMEMBASSY AMMAN 4325
RUEHTV/AMEMBASSY TEL AVIV 1321
RUEHJM/AMCONSUL JERUSALEM 4560
RUEHGV/USMISSION GENEVA 0517
UNCLAS BEIRUT 000333 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EB/IPE CLACROSSE 
DEPT PLS PASS TO USTR ESAUMS 
DOC FOR JBOGER 
DOC PLS PASS TO USPTO JURBAN 
LOC FOR STEPP 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON PGOV LE
SUBJECT:  LEBANON:  2008 SPECIAL 301 REVIEW 
 
1.  Summary:  In 2007, the Government of Lebanon (GOL) made some 
important advances in the protection of intellectual property rights 
(IPR).  Progress, however, was hindered by continued political 
instability, the absence of a functioning parliament that could 
approve new IPR legislation and the deterioration of the security 
situation in the country.  Embassy continued to engage steadily with 
the GOL on the need to better protect IPR, but a significant amount 
of GOL attention was focused on political and security issues. 
 
2.  The cabinet of Prime Minister Fouad Siniora approved several 
IPR-related bills and sent them to parliament.  However, the 
pro-Syrian Speaker has refused to open parliament since November 
2006, preventing those bills, along with all other pending 
legislation, from being approved and implemented.  This action also 
prevented the election of a new president following the November 23, 
2007 departure of pro-Syrian president Emile Lahoud and Lebanon's 
presidency has been vacant since then.  The ongoing political 
impasse, conflict over the presidency, and need for law enforcement 
authorities to concentrate on controlling political violence has 
kept the government from giving IPR issues more attention. 
 
3.  Post recommends that Lebanon be maintained on the Special 301 
Priority Watch list.  While progress on improving IPR protection is 
not what we had hoped, the government has taken some important steps 
to reduce piracy.  In 2008, we hope the GOL will better address IPR 
concerns, especially relating to enforcement, as a part of its WTO 
accession process effort.  End Summary. 
 
OVERALL ASSESSMENT 
OF IP CLIMATE 
------------- 
 
4.  In 2007 Lebanon remained on the Priority Watch List of the 
Special 301 Review.  The government made some progress in terms of 
approving new draft laws to present to parliament, including laws on 
geographical indications, industrial designs and trademark, and 
amendments to the copyright law.  These await ratification by the 
parliament that is not currently meeting.  The business community 
has recognized the good efforts of the Lebanese Internal Security 
Force's (ISF) Cyber Crime Unit in protecting IPR. Most arrests 
resulted in immediate release and minor fines.  However, the overall 
political and security situation significantly hampered the GOL's 
ability to update IPR legislation and enhance enforcement.  The 
International Intellectual Property Alliance (IIPA) estimated 
preliminary 2007 piracy-related losses in Lebanon at $26.8 million, 
up from $25.6 million in 2006. 
 
5.  In February 2008, the Ministry of Economy and Trade (MOET) 
launched an IPR media campaign, in collaboration with the American 
Lebanese Chamber of Commerce (Amcham) and partly funded with a USAID 
grant.  The two-month campaign consists of a series of three 
different TV spots (focusing on pharmaceuticals, optical media and 
music software) that have been running on all eight local TV 
stations, as well as billboards to be displayed across the country. 
USAID continues to provide technical assistance for WTO accession 
through its WTO Accession Project, which was recently renewed until 
April 2008, but progress remains slow.  In July 2007, USAID funded a 
two-week Economic Dialogue Forum, with an entire week dedicated to 
increasing IPR awareness and the economic importance of protecting 
IPR. 
 
6.  Post organized a one-day IPR Forum in collaboration with the 
USPTO in November 2007.  Some 200 persons attended, indicating the 
interest of the business community and the public sector in IPR 
issues.  Further, more intensive training is scheduled for May 2008, 
focusing on the public and the judicial sector. 
 
7.  Cable television piracy remains the GOL's most significant IPR 
challenge.  According to the U.S. copyright industry, 80 percent of 
Lebanon's population uses pirated content, one of the highest rates 
in the world.  The Motion Picture Association (MPA) estimated the 
annual losses to the U.S. motion picture industry due to cable 
piracy in Lebanon at $31.8 million in 2006.  In Lebanon, the average 
monthly fee for pirated cable television service is $10.  Legitimate 
cable subscriptions cost $15 per month, and the pirated service 
offers a much more attractive package of channels, as well as 
first-run movies.  In the absence of much-needed legislation 
regulating the cable industry, no government body has been willing 
to bear the political heat of throwing between 600-700 illegal cable 
operators out of business (although the 1999 Copyright Law provides 
sufficient legal basis for such action).  The Telecommunications 
Regulatory Authority (TRA), formed in February 2007, considers this 
to be a part of its mandate, but is currently fully occupied with 
other more pressing issues related to restructuring Lebanon's 
telecom structure for eventual privatization in order to meet Paris 
III Donor's Conference benchmarks. 
 
8.  The GOL in 2006 took concrete actions to address cable piracy at 
the onset of the 2006 World Cup television broadcasts. In that case 
a deal was brokered between legitimate and pirate cable operators, 
allowing pirate operators to legally broadcast the World Cup soccer 
games.    Since then, however, no further negotiations for a 
permanent solution have taken place.  In June 2006, a cabinet decree 
was drafted to allow an interim solution whereby illegal cable 
providers would receive a temporary license to broadcast. 
Possession of a copyright license was one of the conditions for 
receiving a temporary license.  The GOL intended to follow-up on 
this by drafting a law on encrypted and subscription TV that would 
create a full-fledged regulatory framework for cable providers. 
Unfortunately these efforts are still pending.  There was admirable 
progress until July 2006, when Lebanon suffered through a month-long 
war between Isral and Hizballah.  One private sector contact noted 
that a one-year old Lebanese company is currently buying licenses 
from international cable operators to broadcast their 
Arabic-language programs, which are later bought by local illegal 
operators, therefore making part of the illegal cable operators' 
content legal.  It is hoped that this licensing will be extended to 
English-language and all other programs as well. 
 
NOTORIOUS MARKETS 
----------------- 
 
9.  The sale and distribution of pirated, counterfeit, and copycat 
products continued to take place across Lebanon in 2007, in 
commercial establishments or by street vendors.  Although most of 
these products are imported from Asia, it is alleged that there are 
factories producing pirated CDs (mostly for computer software and 
entertainment material) in Beirut's southern suburbs in the Dahya 
area, a Hizballah stronghold.  The GOL has little access to areas 
controlled by Hizballah.   It is believed that production is on a 
small scale, and intended only for the local market.  According to 
some contacts, other problematic geographic areas include the 
surroundings of the city of Tripoli in the north, some Palestinian 
refugee camps in Beirut and the Biq'a border area with Syria, where 
it is difficult for law enforcement agents to reach large where 
pirated material is stored. 
 
OPTICAL MEDIA PIRACY 
(CDs, VCDs, DVDs) 
-------------------- 
 
10.  Optical media piracy products -- including pirated copies of 
business and entertainment software, sound and film recordings and 
published interactive software -- are widely available in the 
Lebanese retail market.  The sale of computer hardware loaded with 
unlicensed software is a common practice.  The Cyber Crime Unit at 
the ISF has had some success in closing shops that sell pirated 
material.  Most pirated material is either smuggled in or imported 
through legitimate points of entry, namely, the Beirut port and the 
land border with Syria.  The Cyber Crime Unit seized 90,000 
counterfeit CDs and DVDs in 2007 compared to 130,000 in 2006. 
However, in light of the current political insecurity in Lebanon, 
the Unit's efforts have been commended by the business community. 
Anecdotally we have been told that the unit is so successful that 
IPR violators have posted a watch at the headquarters of their 
operations to be alert to impending raids by the Cyber Crimes Unit. 
 
USE/PROCUREMENT OF 
GOVERNMENT SOFTWARE 
-------------------- 
 
11.  The GOL, having successfully eliminated the use of pirated 
software in public administration, has been in compliance with 
international IPR standards since spring 2004.  The Office of the 
Minister for Administrative Reform (OMSAR) acts as the central 
authority for the procurement of government software and hardware. 
 
TRIPS COMPLIANCE 
---------------- 
 
12.  Lebanon, an original member of the GATT, is eager to accede to 
the WTO as soon as possible, and support for accession is widespread 
among the business community.  However, there has been only marginal 
progress toward that objective.  In December 2006, the GOL signed a 
Trade and Investment Framework Agreement (TIFA) with the U.S., but 
the agreement has yet to be ratified by the GOL, and there have been 
no TIFA Council meetings.  The TIFA cannot be ratified because the 
parliament currently does not meet, and there are no prospects that 
parliament will meet soon to take up the TIFA or other legislative 
matters. 
 
13.  USAID continues to supply technical assistance in reviewing and 
amending the Copyright law and the draft law on e-commerce for 
conformity with TRIPS and with the WIPO Copyright Treaty (WCP) and 
the WIPO Performances and Phonograms Treaty (WPPT).  Draft laws and 
amendments created as a result of this assistance are awaiting 
parliamentary action which, again, cannot occur because pro-Syrian 
forces in the political opposition prevent the parliament from 
meeting in order to counter any moves by the pro-western Lebanese 
government.  Similarly, amendments to modernize the Copyright Law 
were approved by the cabinet but are waiting for approval by the 
non-functioning parliament. 
 
DATA PROTECTION 
--------------- 
 
14.  No progress in health-related IPR issues was witnessed in 2007. 
 Lebanon's Patent Law does not provide adequate protection for 
pharmaceutical companies.  The law requires the submission and 
issuance of a patent in Lebanon to insure exclusive marketing 
rights.  However, its data exclusivity provisions as they apply to 
drug registrations are ambiguous.  The MOET is currently working on 
introducing amendments to the draft law on unfair competition to 
provide adequate data protection to pharmaceutical companies during 
the registration process at the Ministry of Health (MOH).  The 
resigned Minister of Health, who joined five other ministers in 
boycotting cabinet meetings since November 2006 in an attempt to 
pressure the legitimate government to fall, has been uncooperative 
in working on these amendments.  Pharmaceutical companies continue 
to suffer from the MOH's registration of unauthorized copycat 
medicines.  The Pharmaceutical Research and Manufacturers of America 
(PhRMA) estimate that 19 copycats were registered by the MOH in 
2007, up from nine in 2006. 
 
15. The GOL has never established a joint task force to study and 
offer recommendations to improve the regulatory environment for 
pharmaceutical drugs.  The MOH claims that this falls under TRIPS 
Plus, and the Minister of Health, allied with the pro-Syrian 
political opposition, is not interested in setting up a task force. 
Pharmaceutical companies have, however, continued to offer to help 
the MOH in a number of areas:  providing information on regulatory 
environments in neighboring and reference countries; support in 
setting up a pharmaco vigilance department; upgrading the website of 
the MOH; various health care awareness campaigns; support in 
filing/archiving systems; help in combating counterfeiting; and 
identifying qualified labs for independent testing. 
 
ENFORCEMENT 
----------- 
 
16. The Internal Security Force's Cyber Crime Unit was established 
in 2006 to combat both cyber and IP-related crimes.  The Unit has 
around 25 full-time staff, but must return to regular police work 
during times of civil disturbances.  The Unit lacks the necessary 
equipment, software, and training.  Training has been provided by 
the Business Software Alliance (BSA), International Intellectual 
Property Alliance (IIPA) and Motion Picture Association (MPA), 
although in 2007 the MPA stopped funding such projects in Lebanon 
due to lack of IPR enforcement.  The Lebanese Intellectual Property 
Association (LIPA) has applied for a U.S. grant, which will be used 
to provide equipment and technical assistance to the Unit. 
 
17. The motivated official who is the leader of the Cyber Crime Unit 
has developed a map of around 20 major pirate distributors.  He 
conducts raids on large-scale distributors at locations that he 
alone (for fear of leakage) has identified.  According to the Unit, 
over 630,000 counterfeit products were seized in 2007, including CDs 
 
and DVDs and their covers, equipment to produce counterfeit CDs and 
DVDs, product labels, car parts, cosmetics, computer accessories, 
and other miscellaneous products.  This is an increase of 87 percent 
over the 337,000 counterfeit products seized in 2006, including CDs 
and DVDs and their covers, equipment to produce counterfeit CDs and 
DVDs, books, product labels, detergents, and aluminum parts.  Most 
IP-infringing material is either smuggled in or imported through 
legitimate points of entry under Customs' jurisdiction.  Customs 
seized over $480,000 worth of counterfeit CDs and DVDs, watches, 
cosmetics, bags, shoes, clothes, car parts, and other miscellaneous 
products in 2007, a slight increase in value compared 2006, although 
a smaller number of goods were actually seized.  However, there is 
still a problem with the lack of effort to crack down on the 
ubiquitous street vendors who sell pirated CDs and DVDs. 
 
18.  There are no specialized IPR courses at the Judiciary Institute 
where judges are trained at the beginning of their career, but a 
number of seminars on IPR are included in the curriculum.  New 
judges are increasingly aware of IPR issues.  There were no 
statistics on the number of IP-related court rulings in 2007, 
although LIPA believes they have slightly increased in the past 
year.  However, business representatives have complained of the 
slowness with which the judiciary has acted on IPR-related cases. 
Although prosecutors can impose fines of up to $33,000 for IPR 
infringements, fines are actually very low and violators appear to 
find those an acceptable cost of doing business.  There has been no 
progress in establishing specialized IPR courts since the issue was 
first raised in May 2006.  Post will encourage greater progress on 
IPR from the judiciary, given the number of judges and prosecutors 
trained in the U.S. so far, and will push further for the 
establishment of specialized IPR courts. 
 
TREATIES 
-------- 
 
19. Lebanon has not yet ratified the 1996 WIPO Internet Treaties 
(the WIPO Copyright Treaty and the WIPO Performances and Phonograms 
Treaty).  Nevertheless, the MOET claims that the Copyright Law, with 
its focus on Internet and new technologies, was drafted to encompass 
the Internet treaties.  The law covers the core of these treaties, 
including full reproduction rights, distribution rights, and "full 
communication to the public" rights.  The draft law on e-commerce is 
still being revised by the MOET, which would then be sent for 
cabinet approval and later for Parliamentary ratification.  It 
contains provisions of those treaties.  In December 2006, Lebanon 
signed the Singapore Treaty on Trademarks, which is still awaiting 
parliamentary ratification.  Within the framework of the Lebanon-EU 
Association Agreement, the Council of Ministers approved the 
following, which were sent to Parliament in 2007:  Paris Convention 
on the protection of industrial property, Nice Agreement on 
international classification of goods and services, Patent 
Cooperation Treaty, Madrid Agreement on deceptive indications of 
source on goods, Berne Convention for the protection of literary and 
artistic works, and the Madrid Protocol relating to the Madrid 
Agreement on international registration of marks. 
Again, action on these in the near term is unlikely since the 
pro-Syrian Speaker refuses to open parliament. 
 
INTERNET PIRACY 
--------------- 
 
20. The cost of telecommunications in Lebanon is among the highest 
in the world.  In May 2007 the Ministry of Telecommunications (MOT) 
implemented ADSL internet services, as a way to decrease internet 
piracy, and reduce high dialup fees for internet users.  Yet ADSL 
and wireless internet connection service costs are still high 
compared to the region.  At the time of the launching of ADSL, local 
media estimated that around 30 percent of all internet connections 
went through illegal satellite providers.  According to the IIPA, 
internet piracy was on the rise in 2007.  The GOL has not taken any 
concrete action against internet pirates to date.  Corruption is 
reportedly rampant in this sector. 
 
TRAINING 
-------- 
 
21.  Continued training for judges, prosecutors, enforcement 
officers, and members of the MOET's IPR Unit will help improve IPR 
protection in Lebanon.  Over the past year, the USPTO has funded 12 
judges and prosecutors, five enforcement officers and ten members of 
the MOET's IPR Unit for IPR training in U.S. and the region.  In 
2008, Post would like to focus on judges and police enforcement 
officers through organizing training in-country and continuing to 
send Lebanese participants to regional or U.S.-based programs. 
 
 
POLITICAL CLIMATE 
----------------- 
 
22.  The political climate in Lebanon deteriorated in 2007.  Two 
members of parliament, a high ranking army general, and an important 
ISF official were assassinated in separate car bomb attacks, with 
others killed or injured in each attack.  Another car bomb attack 
seemed to target an American Embassy vehicle and resulted in the 
deaths of three bystanders and injured to two Embassy Lebanese 
staff.  There were attacks in civilian areas and against UNIFIL 
contingents in south Lebanon.  From May - September 2007, the 
Lebanese Armed Forces was involved in a fierce battle against 
militant Islamic fundamentalist group Fatah al-Islam in the 
Palestinian refugee camp of Nahr el-Barid, in the north of the 
country.  Supporters of the opposition continued with their sit-in 
in downtown Beirut -- ongoing since December 2006 -- aimed at 
toppling the government of PM Siniora.  Meanwhile, the political 
deadlock that began with the resignation of six opposition members 
of the Council of Ministers in November 2006 continued to prevent 
the GOL from conducting regular business.  The Speaker of the 
parliament continued to declare the current government 
unconstitutional and refused to open parliament.  Former President 
Lahoud left office on November 23, 2007.  Lebanon has been without a 
president since then due to the opposition's obstructionism.  All of 
this has contributed to a lack of new legislation and to a certain 
extent the inability of the GOL to enforce existing legislation. 
However, the government has remained firm, and is resolute in 
targeting IPR issues and WTO accession as 2008 priorities. 
 
2008 SPECIAL 301 RECOMMENDATION 
------------------------------- 
 
23.  Post recommends that Lebanon be maintained on the Special 301 
Priority Watch list.  Although the business community is heartened 
by progress in some areas, and continues to commend the performance 
of the Cyber Crime Unit, the GOL has been unable to put in place 
policies and procedures that would lead to a systematic reduction in 
piracy rates.  Post remains hopeful that the reform program 
developed by the GOL, which contains an IPR component, will gain 
traction in 2008. 
 
SISON