VZCZCXRO9057
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #1533/01 1412057
ZNR UUUUU ZZH
P 202057Z MAY 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 1934
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEAHLA/DEPT OF HOMELAND SECURITY PRIORITY
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1029

UNCLAS SECTION 01 OF 04 MEXICO 001533 
 
SENSITIVE 
SIPDIS 
SIPRNET 
 
STATE FOR WHA/MEX/WOLFSON, EEB/TPP/IPC, INL/CCP/VIGIL 
STATE PASS USTR FOR SHIGETOMI/MCCOY 
STATE PASS COPYRIGHT OFFICE FOR STEVE TEPP 
USDOC FOR 4320/ITA/MAC/ONAFTA/GERI WORD AND 
ITA/MAC/IPR/WILSON AND WRIGHT 
USDOJ FOR CCIPS/MARIE-FLORE KOUAME 
DHS FOR 
 
E.O. 12958: N/A 
TAGS: KIPR ECON MX
SUBJECT: MEXICO IPR UPDATE - APRIL 2008 
 
REF: SECSTATE 43132 
 
Summary and Comment 
------------------- 
 
¶1. (U) This cable reports on Mexican reaction to the Special 
301 2008 report on Mexico and the following recent 
IPR-related developments in Mexico: the "International Forum 
on IPR and the Judiciary" event held in Cancun in February 
and the establishment of a specialized IPR tribunal to review 
administrative rulings; lobbying efforts for a bill to 
provide ex oficio authority to go after pirates; recent 
criminal IPR verdicts of interest; government initiatives on 
IPR education and cooperation with various industries; 
enhanced coordination with Mexican customs; and ongoing 
efforts by the State of Mexico and Mexico City to combat 
illicit commerce.  Piracy and counterfeiting continue to 
occur on epic scales here in Mexico, but the federal 
government, some of its local counterparts, and the private 
sector are clearly devoting more time and attention to 
creative and coordinated efforts to strengthen IPR 
protection, generating hope that better days lie ahead for 
right-holders and their industries.  End summary and comment. 
 
Reaction to Special 301 
----------------------- 
 
¶2. (U) Econoff spoke with three key Mexican officials 
regarding the 2008 Special 301 report on Mexico (REF A). 
They were 1) Jorge Amigo, Director General of the Mexican 
Institute of Industrial Property (IMPI - rough equivalent of 
the U.S. PTO), 2) Alfredo Tourne, Director for Rights 
Protection of the Mexican Copyright Institute (INDAUTOR - 
rough equivalent of the U.S. Copyright Office), Jose Luis 
Cervantes, chief of the specialized IPR unit of the Office of 
the Attorney General of the Republic (PGR - rough equivalent 
of the U.S. Justice Department).  All three acknowledged the 
problem areas identified in the report and committed to 
taking concrete action to address them before the 2009 
Special 301 drafting process begins.  In particular, INDAUTOR 
plans to review whether Mexican law is in full compliance 
with Mexican obligations under the WIPO Internet treaties, 
IMPI plans to work in closer coordination with health 
authorities on IP issues related to the pharmaceutical 
industry, and PGR intends to continue its focus on higher 
quality prosecutions that result in deterrent convictions. 
 
Judicial IPR Forum and Specialized Tribunal 
------------------------------------------- 
 
¶3. (U) The Mexican Federal Judiciary, IMPI, INDAUTOR, a group 
of private sector representatives, and the U.S. Embassy 
organized the International Forum on the Judiciary and IPR 
that was held in Cancun February 26-29.  Around two hundred 
judges, IPR officials, and attorneys from Mexico, the rest of 
Latin America, Europe, and the World Intellectual Property 
Organization participated in the forum, as did U.S. federal 
judges Ronald Lew and Bernice Donald, Wayne Paugh from DoC, 
Oliver Metzger of the U.S. Copyright Office, Marie-Flore 
Kouame from DoJ, U.S. PTO's John Rodriguez and Jeff Siew, and 
Embassy Econoffs.  The Forum was kicked off by Mexican Deputy 
Attorney General Felipe Munoz, Governor Felix Gonzalez of the 
State of Quintana Roo (of which Cancun is the largest city), 
and Jorge Camero, the President of Mexico's College of 
Federal Judges.  U.S. participants were speakers on the 
following five of the twelve panel discussions on the 
program: 1) pharmaceutical issues; 2) geographical 
indicators; 3) IPR on the Internet; 4) enforcement and 
precautionary measures; and 5) penalties/damages for IPR 
infringement.  There were several non-Mexicans included on 
each panel, and the audience (which included a large number 
of Mexican corporate lawyers) used the Q&A sessions to draw 
attention to areas where Mexico's IPR regime fell short of 
international standards.  Several Mexican judges who spoke on 
various panels were also quick to highlight shortcomings of 
their domestic administrative and criminal IPR regimes.  The 
 
MEXICO 00001533  002 OF 004 
 
 
Forum was an excellent mechanism for raising the IPR 
awareness of the Mexican judges in attendance, and the 
importance of IPR was further highlighted by the fact that 
Guillermo Ortiz, President of Mexico's Supreme Court, 
attended and spoke at the closing ceremony.  Embassy is 
working with the other Forum organizers to make electronic 
copies of all the presentations and distribute them to the 
entire federal judiciary of Mexico. 
 
¶4. (U) Supreme Court President Ortiz made news at the closing 
ceremony by announcing that the Federal Tribunal of Fiscal 
and Administrative Justice would be forming a specialized IPR 
court to handle appeals of administrative rulings made by 
IMPI.  Accordingly, several weeks after the Cancun Forum, 
Mexico's Diario Oficial (functional equivalent of the Federal 
Register) published a judicial resolution declaring that such 
a court will indeed be established, and that it will have 
jurisdiction over all administrative IPR appeals in Mexico. 
The court will consist of three federal administrative/fiscal 
judges with expertise in IPR who have yet to be named -- 
private sector representatives are understandably anxious 
that the judges chosen favor strong IPR protection.  Its 
operating procedures also remain to be determined -- 
right-holder reps are hoping they will be designed in such a 
way as to help reduce the excessive amounts of time it takes 
to reach final resolution of contested administrative cases, 
most of which are currently appealed to the circuit court 
level of the administrative/fiscal system and spend years in 
litigation.  One lawyer who represents U.S. firms told 
econoff that the ideal solution would be to add another 
specialized court at the appeals level, though that proposal 
is not currently on the table. 
 
¶5. (SBU) There is a bill that was passed by the Chamber of 
Deputies last year that remains pending with the Senate that, 
if passed into law, would nullify the formation of the 
specialized IPR court by removing all administrative cases 
originating with IMPI from the jurisdiction of the Federal 
Administrative Procedure Law and thus the Federal Tribunal of 
Fiscal and Administrative Justice, under which the 
specialized IPR court would operate.  If this bill were to be 
passed, appeals of IMPI rulings could only be made before 
constitutional courts, which differ from Mexico's 
administrative/fiscal courts in two key ways: 1) 
constitutional courts can deny requests to hear such appeals, 
and 2) constitutional courts cannot over-rule the substance 
of IMPI decisions.  They can only rule on whether a defendant 
was treated fairly and in accordance with proper procedures. 
Such a system would clearly strengthen IMPI and thus the 
executive branch vis-a-vis the judiciary with regard to 
administrative enforcement, though a specialized 
administrative/fiscal court made up of judges who understand 
the value of IPR protection would also be a clear improvement 
over the status quo.  Industry is close to unanimous that 
either of these two options would be an improvement over the 
status quo but is not taking sides publicly over which one is 
preferable.  The make-up of the new court and its operating 
procedures will clearly be the decisive factors in either 
winning over right-holders or driving them to lobby for 
passage of the bill to remove IMPI from the jurisdiction of 
the Federal Tribunal of Fiscal and Administrative Justice. 
 
 
Lower Chamber Passes Ex Oficio - Internet Piracy Conviction 
--------------------------------------------- -------------- 
 
¶6. (U) Under Mexican law, criminal law enforcement 
authorities can only pursue pirates and counterfeiters if 
they received a formal right-holder complaint.  Previous 
efforts to amend the law to provide ex oficio authority have 
stalled due to conflicting views in the Senate and the 
Chamber of Deputies regarding the bill's scope, with the 
Senate opposed to criminalizing consumer purchases of 
infringing goods and the Chamber of Deputies wishing to 
eliminate specific penalties on complicit public officials. 
The Embassy, the music and movie industries (which recently 
 
MEXICO 00001533  003 OF 004 
 
 
combined their enforcement efforts under the aegis of the 
newly formed APCM, or Protective Association for Movies and 
Music of Mexico), and the American Chamber of Commerce 
proposed a clean version of the ex oficio bill and persuaded 
the Chamber of Deputies' Justice Committee to push the bill 
through to a vote before the end of the April legislative 
session.  Two deputies, including Antonio Diaz-Athie, who 
participated in the legislators' IPR Voluntary Visitor 
program to Washington that Post organized in February, agreed 
to sponsor the bill, and it was passed by the Chamber of 
Deputies on April 29, sending it back to the Senate for what 
will hopefully be final approval before the end of the year. 
The bill is not perfect, but its passage would undoubtedly 
strengthen the PGR's hand in taking on organized criminal 
infringers. 
 
¶7. (U) Through May 16 of this year, PGR had recorded 70 
indictments and five convictions for IPR crimes (versus 166 
indictments and five convictions for all 2007).  Two cases 
worth special attention were the conviction and sentencing to 
six years in prison of a man who had been selling movies 
on-line and the acquittal of multiple defendants who had been 
charged with selling counterfeit medicines that had resulted 
in the deaths of two children. 
 
Reaching Out to Kids 
-------------------- 
 
¶8. (U) INDAUTOR reports that its proposal to include IPR 
awareness materials in primary school civics textbooks has 
been approved by the Secretariat of Public Education (SEP), 
but predicts that such materials will not be ready until the 
2009-2010 school year at earliest, due in part to INDAUTOR's 
skimpy budget and fairly complicated clearance process within 
the SEP bureaucracy for any changes to textbooks.  In the 
meantime, INDAUTOR is considering adapting certain WIPO 
materials for use in comic books or brochures that can be 
distributed in public schools.  The State of Mexico, the 
country's largest by population and the only state to have 
formally signed an anti-piracy agreement with the private 
sector and federal government, plans to disseminate a comic 
book called "Pirate Town" that was developed by a state 
university.  IMPI plans to coordinate with the State of 
Mexico on this project and perhaps expand it to other states. 
 
Agreement on Clean Schools 
-------------------------- 
 
¶9. (U) On March 28, the Mexican Book Publishers Association 
(CEMPRO) signed an agreement with IMPI and the American 
Chamber of Commerce called "Clean Schools" under which IMPI 
has committed to conduct inspection visits on copy centers 
located close to schools and universities in an effort to 
dissuade the illegal copying of textbooks.  This program is 
similar to the agreement IMPI has with the Mexican music and 
movie industries under which it conducts inspection visits to 
cyber cafes in Mexico City.  IMPI inspection visits do not 
result in fines or other sorts of administrative sanctions 
versus infringers, though IMPI can begin punitive proceedings 
once an inspection visit has uncovered unlawful activity. 
Both the copy-shop and cyber cafe initiatives are currently 
targeted more at raising awareness and promoting compliance 
rather than actually punishing violators, an approach that 
the book, movie and music industries seem content with, at 
least for now. 
 
 
Enhanced Customs Cooperation 
---------------------------- 
 
¶10. (U) Over the past year and a half we have witnessed 
significant improvement in interagency cooperation on IPR 
enforcement that has led to numerous success stories, such as 
seizures of infringing goods at the Port of Lazaro Cardenas 
resulting in both criminal and administrative investigations. 
 We have heard from numerous official contacts that the 
 
MEXICO 00001533  004 OF 004 
 
 
participation of multiple agencies in raids and seizures also 
reduces the opportunity for corruption by making it harder 
for a single official or office to make "deals" with pirates 
without arousing the suspicion of other agencies involved in 
the case.  IMPI and Mexican Customs have recently begun 
acting on an initiative to share expeditiously information on 
suspicious in-bound shipments of goods bearing the 20 most 
commonly counterfeited brand-names (e.g., Nike, Louis Vutton, 
Tommy Hilfiger).  IMPI claims it already has one success 
story under this new cooperative initiative. 
 
 
Status of State and Municipal Efforts 
------------------------------------- 
 
¶11. (U) Through the beginning of 2008 the State of Mexico and 
the Municipality of Toluca registered significant progress 
under their respective anti-piracy agreements with the 
federal government and the private sector.  On public 
education, an anti-piracy comic book has been developed for 
distribution to school children, and seminars have been held 
at state universities explaining the importance of IPR to the 
creation of quality jobs.  The State of Mexico is also 
working on a study of the informal economy in the state, 
which will include a directory of vendors and prices.  State 
and municipal police have worked with federal authorities to 
close down Toluca's largest black market, Juarez, in part 
guided by an organized crime map put together by the state 
law enforcement agency.  Authorities and participating 
private sector groups are working to license the Juarez 
vendors, move them to legal venues, and supply them with 
legitimate products that will appeal to their clientele. 
Momentum was slowed in the first months of this year due to 
changes in key leadership positions in the state law 
enforcement and interior departments, but econoffs and IMPI 
officials met with the state-wide coordinating official in 
April to discuss several concrete areas for renewed 
collaborative efforts, including a campaign to ensure that 
all state government offices are using legitimate business 
software.  Draft anti-piracy agreements with the states of 
Morelos, Tlaxcala, Puebla, and Hidalgo are in one phase or 
another of negotiation.  Up until now, a coalition of 
industries has taken the lead in these state-level 
negotiations, but PGR, which has the interagency lead in 
federal anti-piracy efforts, has now decided to spearhead 
these efforts in close collaboration with the private sector. 
 
¶12. (U) In Mexico City, the administration of Mayor Marcelo 
Ebrard continues to expend substantial efforts in 
re-converting the informal vendors who used to rule the 
streets of the city's historic center.  In April, city law 
enforcement forces had several confrontations with black 
marketeers who resisted attempts to move them.  There have 
been newspaper reports that pressure on illegal commerce in 
downtown Mexico City has forced some pirates and 
counterfeiters to re-locate either to other parts of the 
capital or nearby cities such as Puebla.  However, Ebrard's 
police forces have begun to conduct raids in other parts of 
Mexico City in close coordination with federal enforcement 
agencies, inlcuding the PGR.  In addition to the raids, the 
government continues to expropriate real estate and others 
assets used by those engaged in all forms of illegal 
commerce.  The Mexico City police's intelligence efforts are 
improving and have led to investigations of five of the most 
important bands of contraband/piracy/drug distributors in the 
capital.  The long-term goal of the Ebrard administration is 
to "re-convert" informal vendors into licensed, legal 
merchants operating out of authorized locations where the 
government can supervise their activities. 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
GARZA