VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #0261/01 0701427
ZNR UUUUU ZZH
R 111427Z MAR 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3200
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000261 
 
SIPDIS 
SENSITIVE 
DEPT FOR EB/TPP/IPE JENNIFER BOGER AND ROBERT WATTS 
DEPT PLS PASS TO USTR JENNIFER CHOE GROVES, KATHERINE DUCKWORTH 
DOC/ITA/MAC/OIPR FOR CATHERINE PETERS 
PLEASE PASS TO USPTO JURBAN AND LOC STEPP 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON AR
SUBJECT: MISSION BUENOS AIRES VIEWS ON ARGENTINA'S 2009 SPECIAL 301 
REVIEW 
 
REF: A. STATE 8410 
     ¶B. 08 BUENOS AIRES 231 
     ¶C. 08 BUENOS AIRES 336 
 
------- 
Summary 
------- 
 
¶1.  (SBU) In 2008, Argentine authorities responsible for providing 
"adequate and effective protection to intellectual property rights" 
made few meaningful improvements in IPR legislation, regulation and 
enforcement, and there remain serious weaknesses in each of these 
areas.  Multiple law enforcement actions within Argentina's most 
notorious illegal market and Customs authorities' increasingly 
successful implementation of a trademark fraud prevention program - 
seizures of imported falsified goods are up 1600% in the two years 
since the program began - were notable positive exceptions.  On 
legislation, an amendment to the criminal code to increase fines for 
falsifying medication trademarks was a minor improvement, offset by 
an amendment which codified a de facto lack of patent enforcement 
for imports of pharmaceuticals.  On patents, actual patent 
adjudications in 2008 dropped by 40% from prior year levels.  The 
application backlog remains large, effectively curtailing the period 
of patent protection, and injunctive relief for patent infringement 
continues to be complex, slow and variably enforced.  On the key 
issue of "data confidentiality," there has been no progress, with 
proprietary third-country pharmaceutical data routinely used by 
domestic competitors in violation of TRIPS Article 39.3.  On 
copyrights, CD and DVD piracy remains prevalent and illegal internet 
downloading/distribution has continued to rise, according to 
industry sources.  Trademark falsification remains widespread, with 
illegal markets poorly policed.  Minimalist fines and penalties on 
non-medical products offer little deterrent to falsification.  On 
the positive side, Customs authorities continued to exercise their 
trademark enforcement powers in 2008, seizing a significantly higher 
amount of counterfeit goods.  While Argentine authorities have 
certainly taken some steps in the right direction, the overall lack 
of progress (and the unfortunate backwards movement on patent 
protection at the border) leads Embassy to recommend that Argentina 
remain on the Priority Watch List in 2009.  End Summary. 
 
------- 
Patents 
------- 
 
¶2.  (SBU) After five years of progress in reducing its patent 
application backlog, Argentina's patent and trademark agency, the 
National Institute of Industrial Property (INPI), adjudicated fewer 
patent applications than it received in 2008.  Patent applications 
fell 3% to 5,566 in 2008, while adjudications fell substantially, 
dropping just over 40% to 3,682.  Representatives of U.S. 
pharmaceutical companies with operations in Argentina, based on 
their own experience and on their conversations with other 
multinational research-based pharmaceutical firms operating in 
Argentina, confirm that the decline in adjudications on their 
product applications has been notable.  Despite the decline in 
adjudications, the patent application backlog fell, as over 3,200 
applications were deemed "abandoned" by INPI.  Graciela Adan, INPI's 
Coordinator of Institutional Relations, attributed the high volume 
of abandoned applications to the current economic crisis, claiming 
that applicants were choosing not to pay fees required at the time 
of an application's full investigation.  Industry representatives 
instead attribute the increase in abandoned applications to an INPI 
"fast-track" process in which patent applicants were able in 2008 to 
reprioritize their applications which were pending consideration. 
(Note: While INPI declined to share their estimate of the current 
patent application backlog, local industry sources estimate it to be 
in the 23-24,000 range.  End Note.) 
 
¶3. (SBU) With the Argentine 15-year patent protection clock starting 
at the time of application rather than issuance, U.S. research-based 
pharmaceutical companies operating here complain that INPI's 
extended patent processing backlog effectively curtails their period 
of exclusive patent protection.  For example, the majority of 
patents issued by INPI in the fourth quarter of 2007 had been 
applied for no later than in 2002, and applications for 
pharmaceutical and other chemical products take longer than average 
to process.  INPI officials claim their efforts to accelerate patent 
application adjudication are hampered by budget constraints and the 
continuing challenge of maintaining adequate human resources, with 
trained examiners frequently hired away by the private sector and 
long in-house training periods required to bring newly hired 
examiners up to competence. 
 
¶4.  (SBU) The lack of local patent protection for many 
pharmaceutical products, coupled with Argentina's 300+% devaluation 
in 2002, which resulted in sharp price increases for imported 
products, increased incentives for local pharmaceutical companies to 
produce unlicensed copies of products patented elsewhere or for 
which local patents were pending.  Despite high domestic inflation 
that raised local production costs over the past year, a currently 
depreciating peso and a GoA commitment to maintain local 
manufacturing jobs favor domestic pharmaceutical production. 
According to CAEMe (the Argentine Chamber of Medicinal Specialties, 
an association that represents U.S. and other research-based 
pharmaceutical companies), local pharmaceutical firms hold over 50 
percent of the Argentine prescription and over-the-counter market as 
well as almost 50 percent of the export market.  (Note: 
Research-based multinational pharmaceutical companies operating in 
Argentina do not perceive all local pharmaceutical firms as patent 
infringers.  Some of the producers/exporters, according to CAEMe 
leadership and member company representatives, deal only in products 
which are either licensed or have expired patent protection, and 
therefore are legitimate generics.  End Note.)  Argentina amended 
its patent law (Law 24481) in December 2003 to implement an 
agreement between the USG and the GOA that had been signed in May 
¶2002.  That agreement came after approximately three years of 
consultations under the WTO's dispute settlement mechanism. 
 
¶5.  (SBU) The most important unresolved pharmaceutical patent issue 
remains the lack of effective "data protection" (i.e., the legal 
protection of confidential and proprietary data developed by 
pharmaceutical companies that demonstrates the efficacy and safety 
of new medicines).  U.S. and other research-based pharmaceutical 
companies (as well as plant biotech firm Monsanto) believe this to 
be the most significant IPR challenge they face.  Argentina and the 
U.S. have agreed to leave this issue within the WTO dispute 
settlement mechanism for future action.  GoA policies have led 
research-based pharmaceutical companies to complain that Argentine 
health regulatory authorities (in particular ANMAT, the National 
Administration of Medicines, Food, and Medical Technology, the 
equivalent of the FDA) rely inappropriately on data developed by 
research-based companies and presented by companies which did not 
participate in such research to ANMAT to obtain marketing approval 
of unauthorized copies of innovative medicines.  According to CAEMe, 
ANMAT interprets the public disclosure of partial data as an 
indicator that the data should be regarded as in the public domain. 
Article 39.3 of the TRIPS agreement requires WTO members to protect 
data submitted for pharmaceutical marketing approval "against unfair 
commercial use" and "disclosure."  However, non-research-based 
companies need only present publicly-available information, such as 
an existing FDA approval of a product, rather than confidential 
portions of clinical studies results, to obtain marketing approval 
for their product.  Therefore a non-research-based company can 
legally obtain permission to market potentially patent-infringing 
products.  Ernesto Felicio, Executive Director of CAEMe, told 
Econoff in 2009 that "in practical terms, there is no protection of 
confidential data" in Argentina.  Because of this lack of 
protection, a non-research-based company can obtain marketing 
approval of its products not only without a patent, but without 
proving either their safety or efficacy. 
 
¶6.  (SBU) U.S. pharmaceutical companies also remain concerned about 
the legal implications of two specific clauses in the 2003 
amendment.  Specifically, the amendment mandates an expert opinion, 
and requires consideration of the economic impact of an injunction 
on both parties to determine whether or not goods alleged to violate 
the patent law should be seized.  When the amendment was passed into 
law, research-based pharmaceutical companies feared that those 
clauses could preclude the granting of preliminary injunctive relief 
and limit the success they have achieved in protecting their 
products through the use of preliminary injunctions. 
 
¶7.  (SBU) Those fears have been realized.  In January 2007, 
Bristol-Myers Squibb (BMS) received a patent for a product already 
being produced without permission by competitors, a clear example of 
the lack of data protection.  By February, BMS obtained a 
preliminary injunction blocking illegal copies of the product.  The 
court cited TRIPS procedures as reasons for granting the injunction. 
 However, in May 2007, the injunction was overturned on appeal.  BMS 
was forced to file the case based not on TRIPS treaty obligations, 
but on Argentina's patent law alone.  This process is much slower - 
while the initial injunction took barely a month, no court decision 
has been reached in over eighteen months since the appeal was 
initiated.  Prior cases illustrate other weaknesses in the 
injunction process of the patent law.  In 2005, Eli Lilly discovered 
several Argentine competitors selling copies of its lead oncological 
drug, and sought injunctions to prevent those sales.  An injunction 
 
against one infringer was issued after an 18-month judicial process, 
but was later revoked when the infringer presented what it claimed 
was an alternate process to produce the medication (the patent is 
based on the process, not the molecule, as in the BMS case), without 
evidence that the process was in use, or that it even worked.  For 
another infringer, the application for an injunction was rejected by 
a judge convinced by a local expert hired by the defense, who 
claimed that the copycat drug did not violate the U.S. 
pharmaceutical company's patent.  Of the three known infringers of 
Eli Lilly's medication, two had already signed agreements in court 
not to produce copies, and proceeded - and still continue, in 2008 - 
to violate those agreements.  In another instance, Merck Sharp and 
Dohme went to court in 2005 to remove five copies of one of its 
joint-venture drugs from the Argentine market.  In a promising 
ruling, the judge issued injunctions ordering the copies off the 
market.  More than 40 months after the decision, however, those 
injunctions have yet to be enforced - despite the fact that the 
judge in the case ruled the legal basis for the copy drug's approval 
unconstitutional, as well as in violation of TRIPS Article 39.3. 
(Note: the injunction ordered ANMAT to rescind marketing approval of 
the copied product, which ANMAT has not yet done.  According to 
CAEMe, the only further legal recourse available to Merck would be 
to demand the arrest of those responsible for the GoA's failure to 
comply with the court order - the Director of ANMAT and/or the 
Minister of Health.  Merck is unwilling to pursue this course of 
action.  End Note.) 
 
¶8.  (SBU) A frequent complaint of U.S. pharmaceutical companies is 
that there remains in Argentina no regulatory linkage between INPI 
and ANMAT.  Its absence in Argentina allows ANMAT to grant local 
pharmaceutical producers authorization to manufacture and sell 
products that have already been patented or for which a patent has 
been requested.  The Embassy and multinational pharmaceutical 
companies have urged the GOA to establish a linkage between ANMAT 
and INPI that would prevent ANMAT from continuing to authorize local 
pharmaceuticals to produce products for which an INPI patent has 
been granted or is pending.  While such linkage is not explicitly 
required by TRIPS, its implementation would provide a potential 
remedy for the lack of data protection.  U.S. and other 
research-based pharmaceutical companies must incur the legal costs 
of obtaining injunctions to stop the production and sale of products 
produced by local pharmaceutical companies for which the 
research-based companies have Argentine patents. 
 
¶9.  (U) Law 25649 adopted in 2002 requires medical doctors to use a 
drug's generic name in all prescriptions.  Doctors may also include 
a trademarked version of a drug (and no more than one) in their 
prescriptions, but pharmacists may still offer a substitute.  If a 
medical doctor does not want a substitute provided, the reason must 
be indicated on the prescription.  U.S. and other research-based 
pharmaceutical companies operating in Argentina believe this law 
diverts sales from innovative medicines to TRIPS-infringing copy 
products.  Some of these firms argue that true generics do not exist 
in Argentina because copy products are not required to demonstrate 
their bioequivalence or bioavailability with original products, 
meaning local producers can sell drug copies that lack quality and 
safety assurances. 
 
¶10.  (SBU) Concerns have also been expressed by market players over 
criteria for patentability.  U.S. biotech company Monsanto notes 
that INPI resolution 243/2003 precludes the issuance of patents for 
transgenic plants and animals, despite the fact that the patent law 
(Law 24481, a higher legal authority than a resolution) excludes 
from patentability only living material that is "pre-existing in 
nature."  International pharmaceutical firms and CAEMe told Post 
that, late in 2007, INPI refused to grant patents for two new 
pharmaceutical products for "lack of an inventive step."  The 
products were reformulations of previously patented medications 
(i.e., "evergreen" products), but such products had consistently 
received patents before.  While one of those was approved by INPI in 
2008 on appeal (the other remains pending), it appears that pressure 
has been applied on patent examiners to alter their adjudication 
standards.  In early 2008, according to Felicio, then-Health 
Minister Gonzalez visited INPI, taking time to speak to 
pharmaceutical patent examiners individually to remind them of their 
"social responsibility" in helping to ensure access to medicines. 
 
¶11. (SBU) Alfredo Chiaradia, the Secretary of Foreign Trade in the 
Foreign Ministry, sent the Customs Director a letter in April 2008 
(copied to the Minister of Health and the Secretaries of Agriculture 
and Industry) expressing "concern" that discussions in World Customs 
Organization (WCO) meetings could lead to a decision to implement 
"TRIPS-plus" IP protection.  The letter might have been prompted by 
pressure from the local pharmaceutical chamber, which wrote a 
 
similar letter (citing the same WCO working group) to the Customs 
Director two months later. 
 
¶12.  (U) Argentina has yet to become a contracting state to the 
World Intellectual Property Organization's (WIPO) Patent Cooperation 
Treaty.  The WIPO treaty's mutual patent recognition provisions 
among 135 Contracting Parties would eliminate much of INPI's current 
patent application backlog, since the majority of patent 
applications are from foreign individuals and entities. 
 
---------- 
Copyrights 
---------- 
 
¶13.  (SBU) The incidence of Argentine copyright piracy via 
"traditional" CD and DVD copying does not appear to have declined in 
Argentina.  The IIPA estimates that music piracy rate was 60% in 
2008, the same level since 2005, and that business software piracy 
rose one percent to 75% in 2008.  Industry groups estimate an 
increase in the frequency of illegal electronic downloads.  The IIPA 
reports that total seizures of optical media were 3.2 million, down 
30% from 4.6 million discs in 2007, but up 88% from 1.7 million in 
¶2006.  Customs alone seized over 1.5 million blank CDs and over 900 
thousand blank DVDs (the DVDs were all part of a single shipment, 
which also had nearly a quarter million blank CDs) which had been 
imported as contraband. 
 
¶14.  (SBU) Optical Media Piracy: Problems in this area include the 
widespread and open sale of pirated copies of CDs and DVDs, and 
increasing number of businesses offering home delivery (often 
coordinated entirely online) of pirated artistic content. 
Argentina's copyright regime, largely based on the 1933 Copyright 
Act (as amended), provides generally good nominal protection, 
including authority for Customs to seize imported products which 
violate copyrights.  However, the lack of any real enforcement (in 
current practice, pirates will likely - see para 21 for an exception 
- face jail time only if their involvement can also be defined as 
organized crime), coupled with the disincentive to purchase 
legitimate - but more expensive - imported products, has spurred 
piracy.  A survey sponsored by the local American Chamber of 
Commerce in 2006 showed that, while more than half the population 
believes that piracy precludes job creation and facilitates tax 
evasion, two-thirds of Argentines have knowingly bought pirated 
products.  A local attorney specializing in copyright issues told 
Econoff that, while the Argentine legal system does not function at 
a first-world level, it is "not bad for the region."  The legal 
system will generally respond when needed to seize counterfeit 
media, the attorney said, but the existence of a personal 
relationship with relevant authorities is helpful. 
 
¶15.  (SBU) Illegal Downloads:  Electronic delivery of copyright 
infringing materials is on the rise.  CAPIF (the Argentine Chamber 
of Phonograph and Videograph Producers) estimates that 99% of all 
songs downloaded from the internet in 2006 and 2007 were downloaded 
illegally; over 600 million illegal songs were downloaded in 
Argentina in 2006, a nearly 50% increase from 2004.  This growth is 
roughly in line with the significant increase in broadband internet 
access in Argentina.  CAPIF has not repeated the study, but their 
Executive Director, Javier Delupi, claimed to Econoff that this 
number has only grown since 2006.  In 2008, legal music downloads 
were 4.3% by value of total legal music sales in Argentina, with 
over 97% of that total coming from cellphone downloads, and the rest 
from internet sales.  In 2008, thanks to CAPIF and the International 
Federation for the Phonographic Industry (IFPI), two major internet 
forum sites removed all known links to illegal, online music files. 
24,000 messages offering such links were removed.  According to 
CAPIF estimates, illegal internet downloads represent the largest 
portion of music piracy in Argentina.  CAPIF is trying to organize a 
roundtable with internet service providers (ISPs) in Argentina in 
2009 to discuss methods to reduce such downloads. 
 
¶16.  (U) Use/Procurement of Government Software: The GOA has yet to 
fully comply with its 1999 agreement with the local software 
industry to legalize unlicensed software used in some national 
government offices.  In conversations with Econoff, GoA contacts in 
the Ministries of Economy and Planning estimate that over 90 percent 
of GoA agencies employing licensed software are using it illegally. 
 
¶17.  (U) Proposed Augmentation of Copyright Penalties: In 2007, 
motion picture and recording industry representatives proposed to 
Congress a modification of the criminal code to increase currently 
nominal criminal penalties and fines for copyright violations.  The 
modification would also facilitate the destruction of pirated goods 
by providing discretion to the rights holder over disposition of 
 
infringing goods as well as make updates to the law to address 
modern technologies.  While a draft bill proposing these changes was 
formally tabled for Senate consideration by sympathetic 
parliamentarians in 2007, no legislative action was taken on the 
bill by the end of 2008.  As a result, the proposal would have to be 
resubmitted by parliamentarians in the current 2009 legislative 
session in order to be considered. 
 
---------- 
Trademarks 
---------- 
 
¶18.  (SBU) Industry sources agree that Argentina's 1982-era 
trademark law (Law 22362) generally meets international standards, 
but note that nominal fines have not proven significant deterrents 
to falsification.  A number of amendments to the Penal Code over the 
past six years have limited penalties to probation periods and 
rendered it less effective.  A former INPI head and other industry 
participants charge that these amendments render trademark 
protection inconsistent with WTO norms.  They argue that existing 
remedies no longer meet TRIPS Article 61 requirements, which 
obligate members to adopt trademark laws which "include imprisonment 
and/or monetary fines sufficient to provide a deterrent" to 
counterfeiting.  On a positive note, INPI has increased its 
efficiency in the process of renewing trademarks.  However, while 
INPI  trademark adjudication, like patent processing, sped up in 
recent years, it fell back in 2008.  According to official INPI 
statistics, trademark applications (including renewals) increased 
25% to 89,629 in 2008, but total adjudications (including over 8,500 
abandoned) fell 12%, to 73,035.  (Graciela Adan, INPI's Coordinator 
of Institutional Relations, argued that the adjudication total was 
similar to other previous years, though adjudications in 2008 were 
also 11% lower than in 2006 and 2.3% lower than in 2005.)  Raids by 
local police on flea markets where counterfeit merchandise is openly 
sold have not been frequent or widespread enough to lessen the 
availability of pirated goods.  Representatives of industries 
frequently targeted by counterfeiters claim that over forty large, 
well-established markets exist in Buenos Aires alone that are almost 
completely dedicated to the sale of counterfeit goods (in addition 
to innumerable smaller points of sale throughout the country).  The 
largest of these markets, which is reputed to be the largest in 
South America, is called "La Salada."  According to reports, 6,000 
people work there, and up to 50,000 customers visit and make USD 9 
million in purchases daily.  (Note: The EU highlighted this market 
in its October 2006 301-equivalent report, which received 
considerable press attention in Argentina.  End Note.)  "La Salada" 
has a dangerous reputation, and post IPR contacts have told us that 
organized crime elements operate within the market. 
 
¶19.  (SBU) Amendments to Existing Legislation: Argentine trademark 
legislation had a minor, positive modification in 2008, which 
increased penalties for falsifying medications (i.e., violating a 
trademark, not a patent).  Offenders previously faced a potential 
prison sentence, but now can also be fined 10,000 to 200,000 pesos 
(from approximately $3,000 to $57,000).  Since penalties for 
trademark violations are typically probation (absent death or injury 
caused by the falsified medication), CAEMe leadership notes that the 
fines create at least some deterrent penalty in these cases. 
Numerous other proposals to augment trademark protection have not 
prospered, including one drafted by members of the American Chamber 
of Commerce in Argentina.  While several proposals have been 
sponsored by various parliamentarians in the last few years, none 
has been progressed beyond the congressional committee review 
stage. 
 
¶20.  (SBU) A court case on counterfeiting has sent an inopportune 
signal about trademark protection in Argentina.  In 2007, a judge in 
Tucuman province ruled that a vendor of counterfeit athletic shoes 
acted "in good faith" in part because he had legal invoices for his 
purchases.  This decision came despite a reported agreement 
(presented as evidence in the case) between the vendor and the 
manufacturer, which acknowledged that the shoes were made with a 
copied trademark.  The case was appealed by the trademark owner, and 
the appeals court overturned the decision in 2008.  However, 
according to the trademark owner's attorneys, the case was sent back 
to the local court, where it ended without a conviction. 
 
------------------- 
Enforcement actions 
------------------- 
 
¶21. (SBU) The most notable enforcement actions of 2008 were three 
raids conducted within notorious street fair "La Salada" (see para 
18).  These enforcement actions follow two 2007 raids which are 
 
thought to be the first such actions in "La Salada."  Seized in the 
2008 raids were a total of over 10 million copies of cover artwork 
(which would be inserted inside plastic cases of copied discs for 
sale), 25 industrial disc-pressers, 115 disc-burners, and over 
130,000 already-copied CDs and DVDs.  Eight people were arrested in 
one raid.  Many of the copied discs seized were "master" discs, so 
that purchasers could buy those and the copied cover artwork and 
make their own pirated CDs to sell.  Econoff has been informed by 
Province of Buenos Aires tax authorities that a number of 
high-profile tax and IPR enforcement actions in the La Salada market 
are being planned for the 2009 calendar year. 
 
¶22. (SBU) Another positive event was a conviction and 10-month 
prison sentence for a man caught selling pirated DVDs.  The Motion 
Picture Association lawyer who initiated the case told the press 
that this was the first-ever prison sentence handed down in 
Argentina for pirating movies (two convicted music pirates received 
three- and five-month sentences in 2007, but convicted movie pirates 
had routinely received probation or a suspended sentence).  In 
another notable enforcement action, a police official told press in 
November 2008 that a Mexican national arrested on charges of 
smuggling ephedrine in bulk was also "working in the production of 
pirated CDs and DVDs."  The attorney also noted that the pirate had 
other criminal convictions, which may have contributed to the 
sentence he received. 
 
¶23.  (SBU) On the other hand, the Argentine Congress weakened 
potential patent enforcement on imported products by amending an 
existing law in December 2008.  Law 25986, which was passed in 
December 2004, prohibited the import or export of merchandise which 
violates any intellectual property rights.  The amendment codified a 
de facto lack of patent enforcement (as the law was never fully 
implemented) by explicitly limiting border enforcement to trademarks 
and copyrights.  While the amendment appears consistent with TRIPS 
Article 51, which requires border measures to prevent "the 
importation of counterfeit trademark or pirated copyright goods," it 
appears non-compliant with TRIPS Article 28.1, which specifies that 
a patent shall allow its owner to "prevent third parties not having 
the owner's consent" from importing, as well as selling, that 
product. 
 
¶24.  (SBU) In October 2006, AFIP (the Federal Administration of 
Public Revenue, an IRS-equivalent and with authority over 
Argentina's Customs agency) issued a decree which allows Customs to 
detain potential trademark violating merchandise until the holder of 
the locally registered trademark authenticates the shipment, and 
seize it if the holder does not.  While regulation of law 25986 
would have also allowed detention and seizure of merchandise which 
violates patent norms (such as copied pharmaceutical products), the 
AFIP decree only applies to trademarks.  This new trademark 
interdiction program, which became operational in April 2007, has 
proven highly successful.  According to data provided by Customs, 
the total retail value of trademark violations seized in 2008 was 
US$ 58.2 million - a 77% increase over such seizures in 2007, and an 
increase of over 1600% compared to 2006, the year before the program 
was implemented. 
 
¶25.  (SBU) Regarding training in 2008, Post nominated two federal 
criminal judges who attended a USPTO course specifically for judges 
and prosecutors on criminal enforcement of copyright and trademarks, 
and two officials from the GoA National Seed Institute who attended 
a USPTO course on the International Union for the Protection of New 
Varieties of Plants (UPOV).  Post also made arrangements for a total 
of four GoA officials - two Buenos Aires City prosecutors and two 
from the federal Prefectura Naval (Coast Guard equivalent) - to 
attend a week-long IPR training course in Lima, Peru, at the 
International Law Enforcement Academy (ILEA) there. 
 
--------------------- 
GMO Rights Protection 
--------------------- 
 
¶26.  (SBU) Argentine farmers have the legal right to replant - 
although not to sell - seed generated from a harvest originating 
from registered seeds without paying additional royalties.  However, 
despite laws on the books to the contrary, Argentine farmers have 
long sold registered seeds without payment of required royalties, a 
practice which continued in 2008.  This is a widespread problem with 
soybean seed.  According to the president of an Argetine seed 
producer association (in which Monsanto participates), 65-70% of all 
soy grown in Argentina is produced from Roundup Ready seeds for 
which no royalties have been paid.  Farm associations and industry 
representatives generally agree that Argentina must elaborate and 
enact a new seed law that better protects intellectual property. 
 
 
The government of Argentina recognizes the need for a new law, but 
pressures from competing interests have delayed its development, and 
no complete draft was produced in 2008.  The sale of registered seed 
from Argentina to neighboring countries, also without payment of 
royalties, has led to significant planting of unregistered biotech 
soybeans in Brazil and Paraguay.  Argentina is a party to the 1978 
Act of the International Union for the Protection of New Varieties 
of Plants (UPOV), but has not signed the 1991 UPOV convention 
revision.  Monsanto reps have told post that they do not intend to 
introduce the next generation of Roundup Ready until Monsanto is 
assured that it will receive proper royalty payments.  Ambassador 
and Embassy officers have raised the Monsanto problem frequently in 
2008, but there has been no progress on a new law.  Monsanto has 
been in discussions with the Government and farm groups, and reports 
some progress in convincing all parties of the need to address this 
issue.  The Argentine Government approved in February 2009 a new 
biotech cotton seed variety after local officials and the cotton 
industry reached an agreement with the seed provider to ensure 
payment of royalties for the new technology. 
 
----------------------- 
Embassy IPR Initiatives 
----------------------- 
 
¶27.  (SBU) Beyond significant regulatory and enforcement 
deficiencies detailed above, reluctance by the various GoA 
enforcement entities to cooperate with each other is a problem that 
has long contributed to ineffective anti-piracy action in Argentina. 
 The Embassy therefore encourages IPR training that brings together 
representatives from the full range of GOA institutions involved in 
anti-piracy efforts.  The trust and familiarity resulting from such 
cooperation would help foster GoA inter-agency teamwork of the sort 
necessary to effectively combat piracy.  One such opportunity began 
in 2007.  With the assistance of the U.S. Department of Justice, 
Post brought GoA and Argentine private sector officials together for 
a workshop to explore and develop innovative IPR enforcement 
methodologies consistent with Argentina's legal and regulatory 
framework.  GoA officials from nine different government entities 
attended, including a federal judge, a federal prosecutor, the 
Gendarmeria, the Prefectura, the Federal Police, Customs, AFIP 
(parent agency of Customs and IRS-equivalent), and prosecutors from 
both the Province and City of Buenos Aires.  The working group was 
the first public/private IPR working group to meet in Argentina in 
several years, if not ever.  The successful end-product was a manual 
on enforcement techniques specific to Argentina, which was published 
in October 2008 with DOJ, Post and INL assistance.  Dozens of 
manuals have since been distributed, including many to the Federal 
Police training school at the request of the school's leader.  The 
printing and distribution of the manual was a key deliverable in 
Post's 2008 strategic IPR plan (Ref C). 
 
¶28.  (SBU) Another key aspect of Post's IPR plan is public outreach. 
 Along with editorial pieces under Ambassador's byline on the 
benefits for Argentina of increased protection of innovation and 
creativity, Post has partnered with the local American Chamber of 
Commerce (AmCham) in some of its IP initiatives.  The AmCham has an 
annual IP conference and an annual IP essay contest for college 
students and young professionals, and the Ambassador's participation 
in both has helped attract press attention to disseminate a pro-IP 
more widely message in Argentina. 
 
-------------------------- 
Comment and Recommendation 
-------------------------- 
 
¶29.  (SBU) Argentina has been on the Special 301 Priority Watch List 
since 1996.  The growing success of the GoA's Customs trademark 
fraud interdiction program, in effect since 2007, is laudable, and 
the increased law enforcement activity in the La Salada market is 
significant.  However, there has been no positive movement on the 
key issues of data protection, patent backlog, injunctive relief, 
and trademark and copyright fraud rates.  The lack of pharmaceutical 
patent data protection is the issue most often called to Post's 
attention by U.S. industry participants, and appears to violate 
TRIPS Article 39.3.  The significant decline in INPI patent 
adjudications in 2008, which INPI attributes to budget constraints, 
is disappointing and calls into question the organization's ability 
to make further inroads into a patent application backlog that 
significantly curtails the effective periods of patent protection. 
Patents that do get issued carry a questionable legal weight, as 
evinced by ongoing problems with copied products, the lack of legal 
resolution of some infringement cases, and variable enforcement of 
those infringement cases where injunctions have been obtained. 
Estimated rates of copyright and trademark violations have not 
 
diminished; Argentina's legislature and enforcement arms have not 
undertaken measures necessary to discourage new violations; and the 
Argentine judiciary remains ambivalent in the fight to protect 
intellectual property.  Arguably, positive GoA actions to improve 
IPR protection in 2008 were offset by the GoA's action to weaken 
legislative protection for imports of patented goods. Given the 
persistence of several significant IPR problems here, the Embassy 
recommends that Argentina remain on the Special 301 Priority Watch 
List for 2009.  End Comment. 
 
¶29.  (SBU) To see more Buenos Aires reporting, visit our classified 
wbsite at: http://www.state.sgov.gov/p/wh/buenosaires. 
 
WAYNE