Search

 

Cablegate: Chile: Post Recommends Chile Remain On Priority

VZCZCXYZ0002
PP RUEHWEB

DE RUEHSG #0304/01 0521934
ZNR UUUUU ZZH
P 211934Z FEB 07
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC PRIORITY 1048
INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 2838
RUEHBR/AMEMBASSY BRASILIA PRIORITY 3504
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 0122
RUEHCV/AMEMBASSY CARACAS PRIORITY 1284
RUEHLP/AMEMBASSY LA PAZ FEB 5043
RUEHPE/AMEMBASSY LIMA PRIORITY 4937
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 3541
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY

UNCLAS SANTIAGO 000304

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/TPP/IPE - JENNIFER BOGER
STATE PLEASE PASS TO USTR
COMMERCE FOR SARA MCDOWELL

E.O. 12958: N/A
TAGS: ETRD KIPR PREL CI
SUBJECT: CHILE: POST RECOMMENDS CHILE REMAIN ON PRIORITY
WATCH LIST

REF: A. STATE 7944
B. 06 SANTIAGO 1761
C. SANTIAGO 174
D. SANTIAGO 141

1. (SBU) Summary: Post recommends Chile remain on the Special
301 Priority Watch List in 2007. During 2006, Chile was the
subject of an Out-of-Cycle Review (OCR). The result of the
OCR was USTR's announcement on January 8, 2007 placing Chile
on the Priority Watch List. In the intervening month, Post
has not seen enough positive movement on intellectual
property rights (IPR) issues -- despite some hasty
enforcement actions and a host of IPR-related bills put
before the Chilean Congress -- to warrant changing Chile's
status. The root of the problem remains the lack of a clear
national policy on IPR protection. End Summary.

New Member of Priority Watch List
---------------------------------

2. (SBU) In 2006, the third year of the U.S.-Chile Free Trade
Agreement (FTA), Chile was the subject of an Out-of-Cycle
Review (OCR) due in large part to its failure to fulfill many
of its FTA commitments on intellectual property rights (IPR).
The OCR, announced in April 2006, resulted in an intensified
dialogue between U.S. and Chilean officials on IPR issues.
The exchanges included digital video conferences, additional
Embassy reporting and a visit to Santiago in August 2006 by
Assistant USTR Everett Eissenstat. Despite repeated USG
efforts to understand the progress Chile claimed it had made
(ref B) to improve IPR protection, the GOC was unable to lay
out in a comprehensible manner its framework to protect IPR.
The GOC's handling of key technical issues such as protection
for clinical data and patents remain unclear. There was also
evidence that film, music and software piracy is growing
worse in Chile. On January 8, 2007, USTR announced the
results of the OCR and placed Chile on the Priority Watch
List.

Data Protection and Patent Linkage
----------------------------------

3. (SBU) In 2006, there was no progress on core issues such
as data protection and patents related to pharmaceutical
products. Despite new legislation and implementing
regulations from 2005, Chile continued to grant approval for
generic copies, violating patents for innovative
pharmaceuticals. Additionally, the GOC allowed local
companies seeking market access to use exclusive company data
from European and North American companies as the scientific
basis for approving these generic copies. Local
representatives of international pharmaceutical companies
continued to detail violations of exclusive company test data
in the Chilean drug approval process. On the issue of
patents, there was no linkage between granting market access
and the existence of valid patents. The GOC played a
semantic game by arguing that its FDA-equivalent, the
Instituto de Salud Publica (ISP), only granted "sanitary
approval" and thus did not violate the FTA's provision
barring the granting of marketing approval in violation of a
patent holder's rights. Internal documentation publicly
submitted by the GOC as part of a judicial case demonstrated
that even it could not distinguish between sanitary approval
and marketing approval, making its semantic shell game appear
even more disingenuous.

Step Forward Becomes A Step Backward
------------------------------------

4. (SBU) In July 2006, the ISP issued an internal regulation,
which required any company seeking approval for a biotech
product to submit its own proprietary clinical test data.
This decision was never trumpeted by the GOC as an advance in
IPR protection and the Embassy noticed it only through the
GOC's online public gazette. When the Embassy contacted
local representatives of the international pharmaceuticals,
all engaged in biotech development worldwide, they saw the
ISP's decision as an important step toward better IPR

protection in Chile.

5. (SBU) What was a step forward became a step backward
before the end of the year, however, because in December
2006, Minister of Health Barria overruled the ISP's internal
regulation with her own decree carrying the force of law.
Barria decided that even for biotech products it was not/not
necessary for a company to present its own proprietary
clinical data when seeking sanitary/marketing approval. A
company could present data from any source, including
proprietary data from another company, as it sought
sanitary/marketing approval for its product in Chile.

No Policy on IPR
----------------

6. (SBU) The core issue at the heart of IPR-related issues in
Chile is the lack of a clear, enforceable government policy.
With a strong presidential system in place, individual
ministries cannot on their own make policy on IPR. If it is
to emerge at all, that unambiguous direction must come from
President Bachelet. Though the judiciary is independent, it
also understands there is no clear policy direction on the
issue. So, it manages either to drag out court cases so long
that a decision is OBE for the IPR stakeholders, or to find
unrelated technical reasons for dismissal. The efforts of
the judiciary to avoid setting precedence in IPR cases have
been noticed in a number of different areas. In addition to
familiar cases in Santiago largely involving pharmaceutical
products, we have also learned of cases involving pirated
products being dismissed by judges in Chile's free trade zone
in Iquique. Judges have dismissed cases either on technical
grounds or with spurious arguments that the goods were only
"transiting" Chile, and thus were not its responsibility.

Some Flash in Anti-Piracy Efforts
---------------------------------

7. (SBU) In the immediate aftermath of annual talks under the
FTA (ref C), there was a burst of activity on the anti-piracy
front. Illegal copies of music, movies and books were
seized, which made some headlines. As opposed to the GOC's
public stance defending its position on data protection and
patents, Foreign Minister Foxley promised the Ambassador more
action to fight piracy, saying Chile's position was
indefensible and it needed to do more (ref D). However,
evidence from industry and anecdotal evidence in Santiago and
elsewhere suggest that nothing has sustainably changed. The
market for legal copies of products contracted, as piracy
gained ground throughout 2006. Efforts by Chilean police and
prosecutors have had little real impact as fines are minimal,
with most IPR violators not even paying them and criminal
penalties suspended. With little to nothing to show for the
effort, police rarely investigate the manufacturing and
distribution of pirated materials.

8. (SBU) There are also several bills before Congress, which
attempt to address Chile's remaining legal FTA-related
obligations on trademarks and patents. It is impossible to
predict when the legislation will pass and more importantly,
when and how seriously it will be implemented. There is also
a bill before Congress to join the Patent Cooperation Treaty,
another FTA obligation and one Chile was to have fulfilled by
January 2007. The Minister of Economy has introduced plans
to reform the Department of Industrial Property (Chile's
equivalent of the U.S. Patent and Trademark Office), but it
remains unclear what the final outcome will be and how patent
office reform could improve IPR protection.

Recommendation: Maintain Chile on the Priority Watch List
--------------------------------------------- -------------

9. (SBU) Chile's policy decisions and actions continue to
fall far short of its rhetoric and trade agreement
commitments on IPR. Worse still, the few legislative and
regulatory moves that the GOC has initiated may not be
improvements at all; they may just be a legalistic effort to
check the required boxes. While the GOC continues to provide

assurances that it understands USG concerns on patents and
copyrights and is moving to address them, the reality on the
ground is quite different. Post believed it had no choice at
the conclusion of the OCR but to recommend Chile be placed on
the Priority Watch List. Reality in Chile has differed from
rhetoric long enough. It was high time to say the emperor
had no clothes. This has not changed.
KELLY

© Scoop Media

 
 
 
World Headlines

 

Ramzy Baroud: Year in Review Will 2018 Usher in a New Palestinian Strategy

2017 will be remembered as the year that the so-called ‘peace process’, at least in its American formulation, has ended. And with its demise, a political framework that has served as the foundation for US foreign policy in the Middle East has also collapsed. More>>

ALSO:


North Korea: NZ Denounces Missile Test

Foreign Affairs Minister Winston Peters has denounced North Korea’s latest ballistic missile test. The test, which took place this morning, is North Korea’s third test flight of an inter-continental ballistic missile. More>>

ALSO:

Campbell On: the US demonising of Iran

Satan may not exist, but the Evil One has always been a handy tool for priests and politicians alike.

Currently, Iran is the latest bogey conjured up by Washington to (a) justify its foreign policy interventions and (b) distract attention from its foreign policy failures.

Once upon a time, the Soviet Union was the nightmare threat for the entire Cold War era – and since then the US has cast the Taliban, al Qaeda, and Islamic State in the same demonic role. Iran is now the latest example…More


Catalan Independence:
Pro-independence parties appear to have a narrow majority. More>>