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Cablegate: Update On Mexico Ipr Issues - Some Encouraging

VZCZCXRO6295
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2219/01 1242134
ZNR UUUUU ZZH
P 042134Z MAY 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 6745
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0407
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEAHLA/DEPT OF HOMELAND SECURITY PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 MEXICO 002219

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/MEX/ROTH AND EB/TPP/MTA/IPC/WALLACE
STATE PASS USTR FOR
EISSENSTAT/ESPINEL/MCCOY/BAE/MELLE/SHIGETOMI
STATE PASS COPYRIGHT OFFICE
USDOC FOR 4320/ITA/MAC/ONAFTA/WORD AND
OIPR/STEPHENS/WILSON/WRIGHT
USDOJ FOR CCIPS/MERRIAM/KOUAME

E.O. 12958: N/A
TAGS: KIPR ETRD PINS MX CH
SUBJECT: UPDATE ON MEXICO IPR ISSUES - SOME ENCOURAGING
SIGNS

REF: A. SECSTATE 56579 B. MEXICO 1678

Summary
-------

1. (SBU) Mexican officials responded positively to Post's 301
demarche, reflecting a growing sense of commitment to taking
IPR infringement more seriously. In recent weeks, President
Calderon reiterated his government's determination to combat
piracy, the Mexican Senate passed a bill that would give
authorities ex officio authority to pursue pirates and
counterfeiters, Mexico joined the U.S. as a third party in
our WTO consultations with China regarding its failure to
honor its IPR obligations, and the Prosecutor General of the
Republic (PGR - equivalent of U.S. Department of Justice)
finished staffing its IPR team and is set to launch an IPR
website. Separately, the American Chamber of Commerce will
inaugurate its IPR Committee later this month. Next week's
visit of Commerce Under Secretary Lavin and the upcoming
meeting of the SPP working group on IPR provide opportunities
for recognizing the advances made to date and pushing for
further progress. End summary.

Mexico's response to 301 ranking
--------------------------------

2. (SBU) Post delivered the 301 demarche contained in reftel
A to Jorge Amigo, the Director General of the Mexican
Institute of Industrial Property (IMPI - equivalent of the
U.S. Patent and Trademark Office), Felipe Munoz, the Deputy
Prosecutor General of the Republic for Federal Crimes,
Beatriz Leycegui, the Under Secretary of Economy for
International Trade Relations, and Genaro Gutierrez, the
Deputy Administrator for Investigations of Mexican Customs.
All of our interlocutors readily admitted that Mexico has
serious IPR problems, but insisted they plan to deal with
them head-on. While not necessarily enamored of the 301
exercise, they expressed satisfaction that Mexico had not
been downgraded to the Priority Watch List this year, and
reiterated the Mexican government's commitment to cooperating
with the U.S., both bilaterally and via the trilateral
Security and Prosperity Partnership of North America (SPP).
We should note that some Mexican IPR officials told us during
the previous Fox Administration that, though they would
prefer to stay off of the Priority Watch List, Mexico's
inclusion on the Watch List helped keep top leaders focused
on IPR.

Strong support from the top
---------------------------

3. (U) We cannot say if President Calderon pays attention to
Mexico's 301 ranking, but he has continued his tough talk on
IPR enforcement in public (see reftel B for a speech he gave
in March). At a meeting of the Mexican shoe industry on
April 26, he once again voiced his government's commitment to
cracking down on the illegal economy and "decisively
combating counterfeiting and piracy to protect investment and
jobs in our country." We believe that the President's strong
rhetoric on this theme is helping energize the relevant parts
of the federal bureaucracy.

PGR IPR team complete, looking for results in 2007
--------------------------------------------- -----

4. (SBU) In a May 2 meeting with Econoffs and visiting DOJ
IPR prosecutor Marie-Flore Kouame, PGR Deputy Prosecutor
General Munoz and the newly appointed head of PGR's
Specialized Unit for the Investigation of IP Crimes -- Jose
Luis Cervantes -- laid out their strategy for cracking down
on IPR infringement. Cervantes, who most recently served as
Mexico's legal attache in Guatemala City and has lived in
both Washington DC and San Antonio, Texas, said he wants to
work more closely with PGR's intelligence unit to focus less
on street vendors and more on the higher echelons of the
criminal organizations that run Mexico's piracy and
counterfeiting operations. Cervantes was also very

MEXICO 00002219 002 OF 003


enthusiastic about U.S.-sponsored training opportunities.
Munoz, who previously held Cervantes' position and is now his
boss, said that the interagency collaboration among PGR,
Mexican Customs, IMPI, and local police has resulted in a
much better coordinated and effective Mexican IPR enforcement
regime, which is operating in an increasingly aggressive
manner. Munoz said that his boss, Prosecutor General of the
Republic (equivalent of our Attorney General) Eduardo Medina
Mora, has made clear that he wants decisive results in IPR
enforcement by the end of 2007. Munoz said he plans to
deliver, but noted that industry will have to do its part as
well, including by making available legitimate products that
are affordable to the average Mexican. One tool that he
believes will improve coordination with the private sector is
the launch later this month of PGR's IP website, which will
contain resources and links, news of enforcement successes, a
suggestions board, and an anonymous e-mail box for
informants. Munoz also predicted that legislative amendments
granting ex officio power to pursue pirates and
counterfeiters would make it much easier for PGR to obtain
convictions and jail time for these sorts of criminals.

Senate passes ex officio amendment
----------------------------------

5. (U) On the same day as President Calderon's speech, the
full Senate passed amendments to Mexico's penal code and IPR
laws that would make the production, storage, transport,
import, and sale of pirated goods a serious crime (delito
grave) and provide the precise ex officio authority to pursue
such crime that PGR seeks. Those convicted could be
imprisoned for up to six years and fined up to US 150,000
dollars, though penalties could be reduced if a defendant
shares information about where and from whom he obtained the
infringing goods in question. Alejandro Gonzalez Alcocer,
chair of the Senate Justice Committee that shepherded the
bill through to passage, remarked that it passed with an
overwhelming majority. He said this reflected the national
sense of urgency related to protecting and fostering the
country's legitimate economy, and pointed out that reducing
prison terms for small-fry street vendors and exempting
consumers from criminal prosecution altogether helped bring
onboard the left-leaning parties, who did not want poor
people to bear the brunt of stronger enforcement. The
Chamber of Deputies had passed a similar bill several years
ago. The Senate version contains slight changes that must
still be approved by the Chamber when Congress re-convenes in
September. According to Gonzalez, who has discussed this
bill with Cesar Camacho, chairman of the Chamber's Justice
Committee, it should be passed into law easily.

U/S Lavin, SPP, WTO, AmCham
---------------------------

6. (SBU) Commerce Under Secretary Lavin will visit Mexico
City next week and has a meeting scheduled with Jorge Amigo,
Director General of IMPI. This meeting will present an
excellent opportunity to reiterate the concerns outlined in
our 301 demarche, recognize the early advances achieved by
the Calderon Administration, and press for further progress.
We predict U/S Lavin will find his intelocutors receptive on
all fronts. In fact, Mexico is hosting the upcoming meeting
of the SPP working group on intellectual property in Cancun,
where we hope to nail down deliverables for the presidential
SPP summit to be held in Canada in August. One already
accomplished actio item pertains to trilateral cooperation in
addressing IPR infringement from countries outside of North
America. Both Mexico and Canada formally requested to
participate as interested third parties in the WTO dispute
the U.S. recently filed against China for failing to honor
its IPR commitments under the WTO's Agreement on
Trade-Related Aspects of Intellectual Property Rights
(TRIPS). As we continue to strengthen our cooperation with
the GOM on protecting IPR, we expect to have an important new
ally when the American Chamber of Commerce in Mexico launches
its IPR Committee this month. The Mission intends to
coordinate closely with AmCham on IPR training, lobbying, and

MEXICO 00002219 003 OF 003


public awareness campaigns.

Comment
-------

7. (SBU) While the above developments are positive, we remain
at an early stage in the implementation and sustained
execution of an effective GOM IPR strategy. The current
signs are certainly welcome, but concrete results (e.g.,
convictions and jail time for pirates and counterfeiters,
increased market share for legitimate products) and follow
through over the coming months and years will be key to real
progress in this very troublesome area. End comment.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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