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Cablegate: Cambodia: Comments for Special 301 Review

VZCZCXRO4011
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0286/01 0530115
ZNR UUUUU ZZH
O 220115Z FEB 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8045
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0646
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 PHNOM PENH 000286

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR EB/IPC, EAP/MLS AND EAP/EP
DEPARTMENT PASS TO USTR AND USPTO

E.O. 12958: N/A
TAGS: ETRD ECON KIPR CB
SUBJECT: CAMBODIA: COMMENTS FOR SPECIAL 301 REVIEW

1. (SBU) Summary. Post recommends that Cambodia not be
placed on the Special 301 Watch List for the time being.
Cambodia is not fully TRIPS compliant and its IPR enforcement
is weak. Although pirated optical discs and counterfeit
products are pervasive in the market place, virtually all of
the products are produced elsewhere. The local market is
small, with most sales to tourists and foreigners residing in
Cambodia, and damage to the industry is minimal. Despite its
shortcomings, the Cambodian government recognizes the
importance of IPR protection and has sought assistance in
capacity-building, both bilaterally and through ASEAN
initiatives. After decades of turmoil beginning in the early
1970's and ending only in 1998 with the surrender of the last
Khmer Rouge units, Cambodia has come late to awareness of the
IPR issue. Given its chaotic past and expressed willingness
to cooperate with the U.S., most recently during February 12
TIFA discussions, post believes Cambodia should be given more
time. In the meantime, we intend to work closely with
Cambodia to raise public awareness, engage in
capacity-building and provide technical assistance. End
Summary.

IPR Environment
---------------

2. (SBU) Although not yet a signatory to the Berne
Convention, Cambodia has most of the legislation in place to
protect Intellectual Property Rights (IPR), including laws on
trademarks, copyrights and patents. However, Cambodia's IPR
protection regime is not fully in compliance with its WTO
TRIPS commitments. It has not fully implemented its
commitments under the BTA in the area of IPR protection and
enforcement. The Cambodian government (RGC) has taken few
significant measures to enforce its IPR obligations. One of
the few such actions was a raid in October 2005 on a
cigarette factory that was manufacturing counterfeit Marlboro
cigarettes. The factory manager was later convicted in
absentia. In November 2005, the WTO granted a deadline
extension until 2013 for Cambodia and other least developed
countries to enforce copyright laws and begin accepting
patents.

3. (SBU) Infringements of IPR are pervasive, ranging from
the sale of pirated computer software, music compact discs,
and DVDs to the sale of counterfeit products, including
watches and drugs. The expense and scarcity of books has led
to the sale of photocopied books, including college text
books and comic books.

4. (SBU) Post is not aware of the existence of plants to
manufacture DVDs in Cambodia, although small shops duplicate
copyrighted material on rewritable CDs. The great majority
of discs on the market are counterfeited in Malaysia or
China. Given the small size of the middle class, there is
very little local demand. Sales are mostly to tourists and
foreigners living in Cambodia. Damage to the industry,
therefore, is probably very small. There have been
occasional police raids on counterfeit copies of domestic CDs
or DVDs, always at the request of the copyright holder. In
addition to counterfeit cigarettes noted above, the Pfizer
Pharmaceutical Company has detected counterfeit versions of
its profitable Viagra drug on the local market.

5. (SBU) On several occasions, the Ministry of Commerce has
observed the use of American trademarks, such as Holiday Inn,
Pizza Hut and McDonalds. When these infringements have
become known, the Ministry has obtained agreement from the
violators to change the names of their establishments.
However, Anheuser-Busch, Inc. lost a lengthy legal battle in
2005 with the Czech firm Budejovicky Budvar to gain exclusive
use of the Budweiser mark in Cambodia.

IPR and TIFA Talks
------------------

6. (SBU) The Cambodian government recognizes the importance
of IPR protection, both to protect its nascent film and music
industries and in order for Cambodia to participate fully in
world markets. For example, during the February 12 inaugural
bilateral meeting under the Trade and Investment Framework
Agreement (TIFA), which was signed in July 2006, Commerce
Minister Cham Prasidh raised the difficulties
Cambodia-produced Angkor Beer was having entering the U.S.,
as a Cambodia-American had frivolously registered the
trademark in the U.S. More significantly, Prasidh talked of
creating a link between trade and IPR. He said that Cambodia
planned to require all firms that established businesses in

PHNOM PENH 00000286 002 OF 002


Cambodia to observe IPR. Also in that meeting, the RGC
requested additional technical assistance on a range of IPR
issues, including comments on the draft law establishing a
commercial court. The USG has provided training to RGC
officials responsible for IPR enforcement, including a
workshop in 2006 conducted by the U.S. Patent and Trademark
Office (USPTO) for persons from all sectors involved in the
IPR issue.

Recommendation
--------------

7. (SBU) Like many developing countries, Cambodia has come
late to awareness of the need to protect IPR. Suffering
through decades of turmoil that began in the early 1970's and
which included the genocidal Khmer Rouge regime, Cambodians
only established political and economic stability in 1998
when the last Khmer Rouge units laid down their arms. With
this turbulent past, it is not surprising that IPR initially
was not a high priority for the RGC. Nevertheless, there is
now growing awareness within the RGC and increasing desire to
increase its capabilities and to cooperate with the USG on
this issue. Given Cambodia's chaotic past and expressed
willingness to cooperate with the U.S., both bilaterally and
in the ASEAN framework, post believes that Cambodia should be
given additional time to fully establish its IPR regime.
This clearly was the sense of the WTO when it extended the
deadline for IPR enforcement compliance until 2013. In the
meantime, we intend to work with the Cambodian government to
raise public awareness of IPR, engage in capacity-building
and provide technical assistance where possible.
MUSSOMELI

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