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UNCLAS SECTION 01 OF 04 GUANGZHOU 000619 
 
SENSITIVE 
SIPDIS 
 
State for EAP/CM; EAP/EP; EEB/IPE; EEB/TPP; EEB/CIP 
State for INL - JVigil 
USTR for China Office; IPR Office; and OCG 
Commerce for National Coordinator for IPR Enforcement 
Commerce for MAS - RLAYTON, SMATHEWS 
Commerce for MAC - ESzymanski, SWilson 
Commerce for MAC - NMelcher, JWu 
USPTO for Int'l Affairs - LBoland, EWu 
LOC/Copyright Office - STepp 
Treasury for OASIA - Dohner, Winship 
DOJ for CCIPS - MDuBose, SChembtob, TNewby 
FTC for Blumenthal 
FBI for LBryant 
DHS/ICE for IPR Center - THipelius, TRandazzo, DFaulconer 
DHS/CBP for IPR Rights Branch - GMcCray, PPizzeck 
ITC for LLevine, LSchlitt, KLinton 
State Pass White House OTP Ambassador Richard Russell 
NSC for JBader, JLoi, JShrier 
 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR PREL KPAO KIND ECON PGOV CH
SUBJECT: Secretary Locke's Participation in IP Forum Advances IPR 
Agenda in South China 
 
REF: A) GUANGZHOU 611, B) GUANGZHOU 320, C) BEIJING 1463, D) BEIJING 
1014, E) BEIJING 570 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. Not for release outside U.S. government channels. Not 
for internet publication. 
 
¶1. (SBU) Summary and comment:  The participation of Commerce 
Secretary Gary Locke and Ambassador Jon Huntsman in the Pearl River 
Delta (PRD) Forum on Innovation and Intellectual Property (IP) on 
October 27 focused local attention on a top-priority concern for the 
U.S. government and business in south China.  The high-level impact 
of the Secretary's message was unprecedented for a region that is 
said by many U.S. businesses to produce more than 80% of the world's 
counterfeit and IP-infringing goods.  The Secretary's frank 
discussion of this difficult issue with Guangdong Province's top 
leader, Party Secretary Wang Yang (ref A), and speech to Jinan 
University students enrolled in the area's first 
intellectual-property degree program, helped convince local 
officials at all levels of the need to improve cooperation and make 
concrete progress on this difficult issue.  In addition, a diverse 
group of senior and working-level U.S. officials from Washington and 
Embassy Beijing also attended the forum and met with U.S. business 
representatives and local officials, helping reinforce the strong 
IPR message at every level. 
 
¶2. (SBU) Comment continued:  Maintaining the positive momentum 
created by the Secretary's high-profile visit will be critical to 
prevent local officials and manufacturers from reverting to 
"business as usual" and ignoring obvious IPR violations in the name 
of economic stability and growth.  Planning for the IP Forum, 
including acrimonious disputes over press coverage of the 
Secretary's IP-related public events, the U.S. Chamber of Commerce's 
inability to reach an MOU with the Guangdong Intellectual Property 
Office, and determining participation from the central government's 
State Intellectual Property Office, starkly demonstrated the 
challenges of working with local and provincial authorities on these 
issues.  Nevertheless, a follow-up meeting between leaders of the 
U.S. Patent and Trademark Office (USPTO) and the Guangdong 
Intellectual Property Office (IPO) was positive and productive, 
largely focusing on messages delivered at Party Secretary Wang 
Yang's meeting with Secretary Locke and Ambassador Huntsman.  It 
will take time to determine the extent of new cooperation and IPR 
progress resulting from the visits and the IP Forum.  However, 
sustained attention and follow-up visits from both senior and 
working-level U.S. officials will play a critical role in convincing 
south China IPR officials of the need to take difficult steps and 
improve local conditions.  End summary and comment. 
 
PRD Forum on Innovation and Intellectual Property 
 
GUANGZHOU 00000619  002 OF 004 
 
 
--------------------------------------------- - 
 
¶3. (SBU) The Pearl River Delta Forum on Innovation and Intellectual 
Property (IP) was an unprecedented showcase of U.S. government and 
business commitment to promoting increased IP awareness and 
protection in the critical south China market.  Secretary Locke 
delivered the keynote address to a packed ballroom of 400 conference 
participants and media, none of whom had previously witnessed such a 
high-level lineup of speakers focused on a problem that is seldom 
mentioned in local press or open fora.  The day-long conference was 
jointly organized by the U.S. Chamber of Commerce and Guangdong 
Province Intellectual Property Office, and attended by 
representatives from the U.S. Department of Commerce, U.S. Embassy 
Beijing, U.S. Consulate Hong Kong, U.S. Patent and Trademark Office, 
U.S. Trade Representative's Office, U.S. Department of Justice, the 
Department of Homeland Security's Immigration and Customs 
Enforcement and the U.S. International Trade Commission.  Executives 
from key U.S. companies affected by difficult south China IPR 
conditions also participated in the forum and a series of other 
events with the Secretary and Ambassador (septel). 
 
¶4. (SBU) Guangdong government participation in the forum was 
distributed across a range of IP-related bureaus and agencies.  It 
was apparent that local officials had not anticipated such strong 
interest from not only the U.S. community but also from 13 other 
Guangzhou-based Consuls Generals and a mix of international business 
and media representatives from throughout Asia and Europe.  The 
message from each speaker was similar: IPR problems in Guangdong are 
no longer local, making half-hearted, stop-gap enforcement measures 
unsustainable.  Working together, however, can yield progress that 
will help all parties and advance local economic development in ways 
that cannot be achieved without stronger IP protection.  Local media 
coverage of the forum did not shy away from the often-taboo IPR 
topic.  Using quotes and footage from Secretary Locke's remarks on 
IPR, many reports highlighted how strong IPR protection would 
bolster long-standing provincial economic policies that aim to 
upgrade from low-cost manufacturing to more high-tech development. 
 
Party Secretary Creates Political Space for IPR Cooperation 
--------------------------------------------- -- 
 
¶5. (SBU) In a separate meeting with Secretary Locke and Ambassador 
Huntsman, Guangdong Party Secretary Wang Yang, the province's 
highest-ranking official and a member of China's Politburo, 
acknowledged the challenge of improving IPR conditions in his 
province (ref A).  The positive effect of his comments were 
immediately obvious as media coverage was more open than at past 
IP-related events.  A meeting between Guangdong IPO Director General 
Tao Kaiyuan and USPTO Deputy Director Sharon Barner, the day after 
the conference, also appeared to benefit from the willingness of the 
 
GUANGZHOU 00000619  003 OF 004 
 
 
Party Secretary to clearly engage U.S. visitors on the IP issue. 
Tao reiterated many of Party Secretary Wang's comments and 
emphasized the positive outlook for increased IPR cooperation 
between Guangdong and the United States.  This is a welcome contrast 
to the Guangdong IPO's effort, three days before the event, to 
restrict media coverage of the forum to a limited number of 
government-controlled outlets. 
 
We're Here to Help 
------------------ 
 
¶6. (SBU) When more than a dozen U.S. government visitors came to 
Guangzhou at the same time, attended the Forum, met with IP rights 
holders and toured a major U.S. toy manufacturer -- local government 
and business leaders took note.  The opportunity to see local 
conditions first-hand,  share high-level USG perspectives from 
Beijing and Washington, and to personally hear about south China IPR 
concerns directly from rights holders were valuable benefits for 
participants on all sides.  For their part, rights holders 
emphasized the need for increased education and public-awareness to 
change local acceptance of IP infringement to a culture of respect 
for IP and its protection.  They also voiced continued concerns 
about weak local enforcement and non-deterrent penalties for south 
China-based infringers. 
 
Jinan University School of Intellectual Property 
--------------------------------------------- - 
 
¶7. (SBU) Even as rights holders at the IP Forum were calling for 
improved IPR education and awareness in south China, Secretary Locke 
was meeting with students and speaking on the topic at Jinan 
University, home of south China's first College of Intellectual 
Property.  The Secretary's activities attracted broad attention to 
IPR concerns from students and the public alike, resulting in 
positive local media coverage and energizing students who are 
well-positioned to amplify the message of IPR protection. 
 
South China IP Challenges Remain 
-------------------------------- 
 
¶8. (SBU) The visits of Secretary Locke, Ambassador Huntsman and a 
cross-cutting group of U.S. IPR officials did much to advance the IP 
agenda in south China, but much work still remains.  Guangdong IPO 
continues to tout their success at registering more patents and 
trademarks than any other Chinese province rather than focusing on 
the quality of patents and the creation of an environment that 
fosters innovation in ways that meet commercial and public demand. 
Proliferation of local technical standards also threatens to 
balkanize high-tech industries and undercut recognized international 
standards as China attempts to flood technology markets with 
 
GUANGZHOU 00000619  004 OF 004 
 
 
proprietary equipment and obtain a larger share of global licensing 
income.  Rights holders report that enforcement remains spotty, with 
rampant local protectionism and non-deterrent penalties for 
infringers. 
 
¶9. (SBU) Consulate Guangzhou will continue engaging with provincial 
and local officials responsible for IPR issues and assisting rights 
holders who face infringement problems in south China.  The 
Consulate encourages more visitors from Beijing and Washington to 
help increase local awareness of U.S. policies and capacity building 
efforts.  Continued funding for all forms of training, both in south 
China and elsewhere in Asia and the United States, will continue as 
important tools for combating the export of 80% of the world's 
infringing goods. 
 
GOLDBECK