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Cablegate: Special 301 - Recommendation to Put Turkey On Watch List

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Tim W Hayes 03/02/2007 04:02:03 PM From DB/Inbox: Tim W Hayes

Cable
Text:


UNCLAS ANKARA 00373

SIPDIS
CX:
ACTION: ECON
INFO: FCS CONS PA POL DCM AMB RAO FAS MGT PMA

DISSEMINATION: ECON /1
CHARGE: PROG

APPROVED: AMB:RWILSON
DRAFTED: ECON:RKIMBRELL
CLEARED: ECON:TG; FCS:JF; IST:SO; DCM:NM

VZCZCAYI709
PP RUEHC RUCPDOC RUEHIT RUEHDA RUEHBS
DE RUEHAK #0373/01 0521000
ZNR UUUUU ZZH
P 211000Z FEB 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 1036
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
RUEHIT/AMCONSUL ISTANBUL 2161
RUEHDA/AMCONSUL ADANA 1671

UNCLAS SECTION 01 OF 03 ANKARA 000373

SIPDIS

SENSITVIE

SIPDIS

DEPT FOR EeB A/S DSullivan
Dept for eeb/TPP/MTA/IPe - jurban/jboger aND EUR/SE
DEPT PASS USTR FOR jchoe-grOves
DEPT PASS USPTO FOR JURBAN
USDOC FOR 4200/ITA/MAC/EUR/PDYCK/CRUSNAK
usdoc for 3133/ita/usfcs/oio/ceebic/mcosta

E.O.12958: N/A
TAGS: ETRD KIPR USTR TU
SUBJECT: Special 301 - Recommendation to Put Turkey on Watch List
(SBU)

REFS: (A) Ankara 293, (B) Ankara 128, (C) 06 Ankara 6734, (D) 06
Ankara 6611, (E) 06 Ankara 5335, (F) 06 Ankara 1898, (G) 06 Ankara
1743, (H) 06 Ankara 1742, (I) 06 Istanbul 1449, (J) 06 Istanbul
1445, (K) Kimbrell-Choe-Groves, Boger e-mail

Summary
-------

1. (SBU) Post recommends moving Turkey to the Special 301 Watch List
in 2007 to recognize improved legislative protections for
intellectual property as well as the increase in seizures and
resources dedicated to capturing and sentencing IPR violators.
Turkish officials provided comprehensive and frank information
during the Special 301 review process (ref B). They recognize that
Turkey needs to improve IPR protection and are ready to work more
intensively with us and with industry to improve Turkey's capacity.
U.S. agencies and industry should work together to develop training
and assistance programs that would complement current EU efforts and
strengthen the hand of reform-minded bureaucrats who continue to
push for more improvement. As one example, we are coordinating an
"Innovation Economy" conference with U.S. business representatives
in Istanbul for later this year. Moving Turkey to the Watch List
would also be consistent with the constructive and cooperative
spirit of the revived Economic Partnership Commission and TIFA
dialogues. End summary.

Protection Problems Continue, but Notable Improvements
--------------------------------------------- ---------

2. (SBU) Turkey's protection of IPR remained problematic in 2006,
especially in the areas of pharmaceutical data exclusivity (DE) and
copyright enforcement. The unresolved status of marketing
applications filed prior to January 1, 2005, by generic drug
producers that rely on test data of the original innovative company
(ref E) continues to be a major area of concern for U.S.
pharmaceutical companies. In addition, while Turkish officials
argue that they do not need to change their patent linkage system
because the one in place provides safeguards in line with other EU
countries, the implementation of a system similar to the one used in
the U.S. could provide additional protection against the approval of
generic copies of products for which a valid patent exists. We
note, however, that only one such case has occurred in Turkey that
could arguably have been avoided with such a system in place.

3. (SBU) Progress has been made in the area of copyright and
trademark enforcement, with the number of seizures increasing
substantially since the enactment of copyright and trademark
protection legislation (refs B, I, J). However, the prevalence of
pirated material continues to concern right holders, some of whom
recently created their own grassroots organization in Turkey to
educate the public and the government about the importance of
protecting IPR (ref C).

4. (SBU) The Turkish government recognizes these weaknesses and is
working to improve its IPR protection regime. During the Advance
Special 301 process (ref B), Turkish ministries readily cooperated
with us by providing detailed information and remained open to
suggested areas for improvement. Most recently, they provided
information regarding the sentencing guidelines currently used by
IPR judges when penalizing offenders (ref K). These include fines
of up to 110,000 euros and up to 6 years in prison for the most
serious violations. In its 2007 Special 301 submission to USTR, the
Turkish government provided a comprehensive, detailed, and frank
description of its strengths, and more notably its weaknesses, in
protecting IPR. While many shortcomings remain, the Turkish
government continues its harmonization process to fulfill its
requirements for EU membership. Many within the government who
handle IPR argue that even if EU membership is not realized, the
improvements being made in the judicial system are important for the
Turkish economy because they will attract more investment and
innovation which, in turn, will create better jobs for Turkey's
underemployed workforce.

5. (SBU) The tone of the responses we receive from Turkish officials
has changed considerably. In place of the refusal to admit a
problem, Turkey's obligation to protect IPR is now a given for
nearly all officials. We receive many requests for training and
assistance, especially for Turkey's specialized IPR courts and for
law enforcement officials. As an example of how eagerly Turkey
takes advantage of U.S. and EU training opportunities, we have
successfully nominated seven Turkish officials to attend four
separate IPR protection courses offered by USPTO in 2006-2007. We
appreciate the cooperation we have received from USPTO in this
respect.
U.S. Industry of Two Minds
--------------------------
6. (SBU) While 2007 Special 301 submissions from industry
organizations such as PhRMA and IIPA call for continued
improvements, they also recognize Turkey's forward movement, both in
patent protection for pharmaceutical products and copyright
enforcement. PhRMA representatives in Turkey express optimism about
Turkey's progress. Those who have observed this issue since the
"dark days" when there was no protective legislation for patents or
data tell us they are "very satisfied" with the improvements but
continue to pressure the GOT (rightfully) for stronger protections.
AMPEC and MUYAP representatives in Istanbul also express their
support for Turkey's progress in seizures and protection of
copyrighted and trademarked material while working with the
government to improve implementation (refs I, J).

7. (SBU) As part of our Advance Special 301 discussions with Turkish
officials and with private industry, we raised the issue of pirated
software in government agencies and asked about the possibility of
having the current administration "reissue" the 1998 prime
ministerial decree outlawing the use of pirated software in public
offices. The GOT has reiterated that the decree remains binding on
all government agencies, which are instructed to ensure compliance
with its requirements. BSA representatives in Turkey have told us
that they believe the government is acting in good faith to fix this
problem and that, while anecdotally they have been told that
government use of unlicensed software is at most 50%, they have no
way of calculating this. In addition, a prominent BSA member, which
also considers itself the "unofficial technology adviser" to the
GOT, questioned the utility of such a decree and does not believe
that pressuring the government to reissue an official statement with
which agencies are already familiar is worth extensive effort.

8. (SBU) This incongruent message from U.S. industry has left
Turkish officials at times frustrated and more often confused.
There appears to be a disconnect between those working on the ground
in Turkey and who see first-hand the improvements that have been
made, and professional industry lobbyists in Washington, some of
whom fail to even make the trip to Ankara to meet face-to-face with
Turkish officials during their visits to Istanbul. This is
something that we have urged U.S. industry representatives in Turkey
to incorporate into their DC representatives' future agendas in
Turkey.

Good Will is There, But Limited Resources Slow Reforms
--------------------------------------------- ---------

9. (SBU) The Turkish government is not deficient in good intentions
to improve IPR protection but rather in capacity as it struggles to
reform its judicial system, educate judges and prosecutors (while
continuously adding more of each to its specialized IPR courts),
implementing reforms in its healthcare system (ref A), and
modernizing its communications infrastructure. During our last
visit to the MOH, we waited in the department where new
pharmaceutical applications are processed among the shopping carts
full of paper files that were awaiting review. Important steps have
been made in terms of automating and linking relevant agencies in
order to facilitate the share of information (ref B), but the
process is not complete.

10. (SBU) U.S. industry and agencies should take advantage of the
good will of Turkish agencies instead of rebuffing their efforts as
insufficient. Such an approach would be consistent with the
constructive, cooperative spirit of the revived Economic Partnership
Commission (EPC) and Trade and Investment Framework Agreement (TIFA)
dialogues. This message would also strengthen the hand of reformers
within the GOT who see the benefits of good policy, especially as
Turkey enters its election season and unpopular policies will be at
greater risk of cancellation without support from within the
bureaucracy.

Watch List Remains a Significant Warning
----------------------------------------

11. Moving Turkey to the Watch List will not let it off the hook in
terms of pressure for continued reform but will recognize the
considerable efforts made by reform-minded officials. Instead of
continuing to penalize Turkey for its lack of perfection, U.S.
agencies should work with industry to find ways to upgrade capacity,
and train and educate Turkish policy makers in complement with EU
twinning and training projects. We are currently working with U.S.
industry representatives to organize an "Innovation Economy"
conference that will stress the importance of IPR protection for
attracting greenfield FDI and innovation to a developing economy.
Turkey was placed on the Priority Watch List in 2004 at a time when
IPR Protection was dismal and Turkish officials refused to admit
that they had obligations to fulfill. The situation, as those who
have been here from the beginning tell us over and over, is
considerably better than it was three years ago, and the USG should
recognize these efforts by moving Turkey to the Watch List.
Wilson

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