VZCZCXRO5022
RR RUEHLH RUEHPW
DE RUEHIL #0438/01 0581447
ZNR UUUUU ZZH
R 271447Z FEB 09
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC 1663
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHBUL/AMEMBASSY KABUL 9907
RUEHLO/AMEMBASSY LONDON 9777
RUEHNE/AMEMBASSY NEW DELHI 4530
RUEHLH/AMCONSUL LAHORE 6835
RUEHKP/AMCONSUL KARACHI 1152
RUEHPW/AMCONSUL PESHAWAR 5763
RUEAIIA/CIA WASHDC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ISLAMABAD 000438 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR PREL PK
SUBJECT: PAKISTAN 2009 SPECIAL 301 REVIEW 
 
REF:  STATE 8410 
 
 
¶1. (SBU) Summary:  Post recommends that Pakistan remain on the 
Priority Watch List (PWL) at the conclusion of the 2009 Special 301 
Review process.  Pakistan has made no significant progress in IPR 
enforcement or data protection legislation in the past year.  End 
Summary. 
 
Data Protection 
--------------- 
 
¶2. (SBU) Pakistan first committed to adopting TRIPS-consistent data 
protection legislation in 2006.  While there was some progress on 
legislation in the fall of 2007, the amendment to the 1976 Drugs Act 
is now stalled because of disagreements between the Ministry of 
Health (MOH), Ministry of Law (MOL) and various industry 
stakeholders over the definition of "new chemical entity" and has 
yet to be introduced to the National Assembly.  In February 2009, 
the MOH held a meeting with stakeholders to discuss the draft 
legislation again.  At least one stakeholder expressed some optimism 
that the legislation might move forward "in the next few months," 
but others think that the prospect of progress is minimal.  More 
than three years have passed since Pakistan first represented that 
it would pass the data protection legislation and there has been 
little progress. 
 
¶3. (SBU) Pakistan's foreign pharmaceutical companies believe that 
imperfect data protection is better than none at all, and are 
reassured that they will have additional opportunities to strengthen 
data protection if the legislation is passed.  The foreign 
pharmaceutical industry continues to be at odds with Pakistan 
domestic pharmaceuticals who oppose the data protection legislation. 
 Since the new PPP Government took office last year, it appears that 
there is little willingness to pass a data protection law.  We have 
heard from some representatives of foreign pharmaceutical firms that 
they have given up their lobbying efforts with the GOP. 
 
¶4. (SBU) It is possible that foreign pharmaceuticals perhaps have 
not aggressively pushed the data protection legislation lately 
because the government pharmaceutical pricing regime has not 
permitted a price increase in the industry in seven years.  Thus, 
many foreign companies cannot afford to develop and market new 
products in Pakistan.  In the past year, two U.S. pharmaceutical 
companies - Merck, Sharp and Dohme and Bristol-Myers Squibb have 
sold their operations to local producers and left the market. 
 
IPO still ineffective 
--------------------- 
 
¶5. (SBU) Pakistan's Intellectual Property Organization (IPO) was 
created with much fanfare in 2005 with ambitious goals of abolishing 
fragmented IPR management and becoming a proactive vehicle for 
efficient, integrated IPR registration. Pervaiz Kausar, the recently 
appointed Chairman of the IPO, has told us that the new government 
is not providing adequate support for the organization.  Kausar said 
that only about one-third of the positions in his office were funded 
as of January 2009, and that he himself has never been paid since 
taking office 16 months ago.  According to him, the current Director 
General of the IPO, whom he described as an elderly relative of 
President Zardari, is not an effective administrator. 
 
¶6. (SBU) In spite of a lack of staff, Kausar, an experienced private 
sector executive, has pushed ahead and continued to provide 
training.  We attended a trademark training class at the IPO's 
Intellectual Property Academy (IPA) for a group of 50 plus law 
students, customs officials and other government officials, the week 
of February 27.  The training was a well-organized overview of 
copyright law and enforcement in Pakistan.  This course was offered 
without a fee and presented by qualified volunteers.  IPA conducted 
a similar course on a different IPR subject in September 2008. 
 
IPR Enforcement 
--------------- 
 
¶7. (SBU) The Pakistan Federal Investigation Agency (FIA) and the 
Federal Board of Revenue continue to investigate and prosecute IPR 
violations; however, pirated media, books and trademarked goods 
 
ISLAMABAD 00000438  002 OF 002 
 
 
remain prevalent in the markets and stores throughout Pakistan. 
After several successful factory raids in 2005, manufacturing of 
pirated goods in Pakistan is less obvious.  Some of those who were 
arrested in the 2005 raids were prosecuted; however, most cases are 
still pending and the few guilty verdicts that were rendered imposed 
minimal punishments.  The FIA is encouraging the Ministry of 
Interior to work with the Law Ministry to strengthen the punishments 
for IPR violations. 
 
¶8. (SBU) The continued prevalence of pirated goods in the markets, 
most of reportedly Chinese origin, is indicative of lackadaisical 
enforcement.  Some newsworthy FIA raids have taken place in 
Rawalpindi and Lahore, however, and one pharmaceutical company 
commented that the FIA in the Punjab has begun to crack down on 
counterfeit drugs there.  But the total number of IPR cases 
registered with the FIA last year remained low, at approximately 46. 
 (Comment:  Twenty eight of these cases are characterized as 
"spurious drug" cases that include both counterfeit drugs and drugs 
that are manufactured by the patent holder but are substandard; 
thus, these may or may not be IPR violations.  End comment.) 
 
¶9. (SBU) The FIA IPR Director suggested that the agency's resources 
have been diverted elsewhere because of the economic and political 
situation and lack of focus on IPR within the new government. 
 
Comment 
------- 
 
¶10. (SBU) Comment:  Given the lack of progress on data protection 
and an apparent lack of adequate IPR enforcement, we recommend that 
Pakistan remain on the priority watch list.  We continue to actively 
pursue opportunities for training and public awareness, but the 
democratically elected government's attention has been focused on 
the major macroeconomic reforms required by the IMF and its own 
political survival.  We need to continue to work with the GOP to 
highlight the importance of a robust IPR regime, however, and 
recommend negotiating an action plan in the IPR arena over the 
coming year to improve IPR enforcement. 
 
FEIERSTEIN