VZCZCXYZ0008
RR RUEHWEB

DE RUEHGT #0198/01 0631240
ZNR UUUUU ZZH
R 041240Z MAR 09
FM AMEMBASSY GUATEMALA
TO SECSTATE WASHDC 7057

UNCLAS GUATEMALA 000198 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD GT
SUBJECT: 2009 SPECIAL 301 REVIEW: INPUT FROM GUATEMALA 
 
REF: A. SECSTATE 8410 
     ¶B. GUATEMALA 557 
     ¶C. GUATEMALA 1422 
 
¶1. (U) Summary: Post recommends that Guatemala be moved to 
the Special 301 Priority Watch List for 2009 and that 
specific actions be requested to improve the enforcement of 
Intellectual Property Rights (IPR).  In November 2008, the 
Ambassador communicated USG concerns over IPR enforcement 
with Attorney General Velasquez and followed up in February 
2009 with a letter announcing the Special 301 process. 
Unfortunately, Attorney General Velasquez, who took over the 
Public Ministry in July 2008, inherited a weak institution 
and faces demands to improve performance in many 
high-priority areas including organized crime, homicide, and 
narco-trafficking.  However, we will continue to press the 
GOG at the highest levels for concrete actions against IPR 
violations and believe that inclusion on the Priority Watch 
List would demonstrate the importance the USG places on 
protecting IPR.  End Summary. 
 
 
A disappointing year 
-------------------- 
 
¶2. (SBU) In November 2008, the Ambassador met with Attorney 
General Jose Amilcar Velasquez and stressed the need for 
Guatemala to improve its enforcement of Intellectual Property 
Rights (IPR).  As discussed in reftels, local industry groups 
shared their concerns with the Embassy regarding the lack of 
enforcement capacity in patents and trademarks, the lack of 
any significant legal cases against manufacturers of pirated 
or counterfeit goods, and the difficulty companies had in 
pursuing cases with the special IPR prosecutor.  Following up 
on the Ambassador's meeting, Econoff, the IPR Registrar who 
reports to the Minister of Economy, and leadership of the 
American-Guatemalan Chamber of Commerce (AmCham) met with 
Attorney General Velasquez and requested that IPR prosecutor 
Norma Bonilla be replaced.  Velasquez expressed his 
understanding of the importance of protecting IPR as a 
prerequisite for economic growth, protecting consumers and 
attracting investment.  Velasquez promised he would replace 
the ineffective IPR prosecutor Norma Bonilla once she 
returned from extended medical leave and strengthen the IPR 
office, including bringing back a key staff member, Hugh 
Garcia, who was forced out of the IPR office by prosecutor 
Bonilla due to his refusal to stall IPR cases.  Garcia had 
recently returned from a Department of State voluntary 
visitor program focused on IPR protection. 
 
¶3. (SBU) Attorney General Velasquez, who inherited a 
dysfunctional organization upon taking over its leadership in 
July 2008, faces many demands to improve the organization he 
leads including focusing on such high-priority areas as 
organized crime, homicides, and nacro-trafficking. 
Unfortunately, the lack of attention paid to IPR enforcement 
in 2008 resulted in a very disappointing year.  Velasquez's 
Secretary General informed Pol/EconCouns that as of end of 
February 2009, inefficient IPR prosecutor Bonilla remained on 
extended medical leave and no formal action could therefore 
be taken to re-organize the section until she returned.  The 
Public Ministry did not respond to our request for IPR 
enforcement statistics for the year.  However, the GOG 
reported in response to question 126 of the World Trade 
Organization's Trade Policy Review for Guatemala that during 
2008 only ten IPR cases were pursued with nine resulting in a 
sentence.  This number indicates a drop of more than half 
from the 23 cases that were prosecuted in 2007.  While damage 
caused by lack of IPR enforcement is difficult to estimate, 
the Business Software Alliance lists Guatemala as second in 
piracy in Central America and in the world's top twenty 
Qpiracy in Central America and in the world's top twenty 
offenders with a piracy rate of 81%.  The AmCham released a 
CID Gallup Latin America study in December 2007 that 
estimated $324 million is spent annually on pirated goods in 
Guatemala. 
 
Improvements needed 
------------------- 
 
¶4. (SBU) The most important step that should be taken by 
Attorney General Velasquez is to formally remove IPR 
prosecutor Norma Bonilla and re-organize the IPR prosecutor's 
office, including bringing back legal advisor Hugo Garcia who 
received substantial USG IPR training.  The Public Ministry 
should also improve its coordination with the Ministry of 
Government to conduct raids against entities suspected of IPR 
violations and pursue cases against manufactures of pirated 
and counterfeit goods rather than focus on small-scale 
distributors.  In addition, the IPR prosecutor should 
re-establish links with industry and the number of IPR cases 
pursued in 2009 should increase from the 2007 level of 23. 
The USG and industry will continue to encourage the 
nomination of a strong IPR prosecutor and coordinate on 
providing training as needed.  We therefore recommend that 
Guatemala be considered for inclusion in the Special 301 
Priority Watch List for 2009 to emphasize that stronger 
enforcement of intellectual property rights in Guatemala is a 
USG priority. 
McFarland