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Cablegate: Egypt Makes Incremental Progress On Ipr Protection

VZCZCXYZ0008
PP RUEHWEB

DE RUEHEG #0201/01 0361414
ZNR UUUUU ZZH
P 051414Z FEB 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 8081
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS CAIRO 000201

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ELA, EEB/TPP/MTA/IPC/BOGER
USTR FOR GROVES/MOWREY
COMMERCE FOR 4520/ITA/ANESA/WEIGLER AND USPTO

E.O. 12958: N/A
TAGS: KIPR ECON ETRD EG
SUBJECT: EGYPT MAKES INCREMENTAL PROGRESS ON IPR PROTECTION

REF: A. 2007 STATE 107629
B. 2007 STATE 158938
C. 2007 CAIRO 3297

Sensitive but unclassified, not for Internet distribution.

1. (U) SUMMARY: The Government of Egypt continues to make
progress on the concerns identified in the Special 301 action
plan for Egypt (ref A); more remains to be done. This
message responds to request in ref B to update the status of
specific concerns, keyed to each item in the action plan.
END SUMMARY.

------------------
Enforcement issues
------------------

2. (U) The Information Technology Industry Development
Agency (ITIDA), which is part of the Ministry of
Communications and Information Technology (MCIT), has sole
responsibility for enforcement of copyright protection for
business software, while the Ministry of Culture retains
responsibility in the area of entertainment software for
copyright protection of non-functional optical disk content
such as music and movies (ref C).

3. (SBU) In a draft 301 submission, Microsoft Egypt
described its relations with Egyptian enforcement authorities
as "fruitful and long-term," estimating that the GOE conducts
150 raids a month against software pirates. Microsoft
reported that it assisted authorities in nine separate
prosecutions involving thousands of suspected pirated
software packages, including one case in which authorities
confiscated products pirated from Microsoft and the American
game manufacturer EA. In this case, an appeals court fined
the convicted pirate 60,000 LE (USD 10,500), which Microsoft
said was the highest fine levied by an Egyptian court in such
a case. The appeals court overturned a lower court's prison
sentence against the software pirate. Microsoft Egypt's IPR
and Licensing Compliance Manager would like to see more
frequent raids against retailers and distributors.

4. (U) The Ministry of Culture has not resolved to
Electronic Arts' (EA) satisfaction a long-standing court
complaint by EA against an Egyptian company, Game Valley,
which sells pirated EA products in Egypt. The company has
expressed concerns about the attitude toward IPR enforcement
in lower courts. Game Valley's license for the pirated
products, which was issued by the Ministry of Culture, has
expired. The Ministry of Culture has pledged to not renew
it, but we suspect that the local company has recently
petitioned the Ministry of Justice to review the situation.
We are currently seeking more information from the Ministry
of Justice and will renew our engagement with the Ministry of
Culture on the case.

5. (U) Book piracy remains widespread. We are aware of no
actions by the Ministry of Higher Education to discourage use
of illegal copies of publications. Microsoft estimates that
software piracy in Egypt fell slightly from 64 percent of
software in use in 2006 to 62.7 percent in 2007, compared to
an average in the Middle East of 60 percent. Damages from
piracy are increasing because of the growing IT market,
Microsoft estimated.

6. (U) USAID is providing technical assistance to the
Ministry of Justice and other ministries to strengthen IPR
enforcement, and Egyptian judges and other officials have
participated in IPR programs conducted by the USPTO. In late
2006, the Minister of Justice created an economic circuit
that will be responsible for hearing commercial law cases,
and 120 judges for the circuit received training on
commercial-law topics including IPR. In addition, USAID has
financed training for 148 appellate judges on IPR and other
commercial-law issues.

7. (U) Microsoft Egypt's IPR and Licensing Compliance
Manager characterized 2007 as a "good year regarding
litigation before the courts," crediting judicial training
and public-awareness seminars for favorable IPR judgments.
Newspaper accounts and other anecdotal reports also indicate
an increase in judgments against IPR infringers as a result
of judicial training.

8. (U) The GOE is still considering whether to implement the
WIPO Internet Treaties (WCT and WPPT).

--------------------------------
Pharmaceutical Protection Issues
--------------------------------

9. (U) The GOE has not responded to recommendations that
USTR submitted to Minister of Health Hatem el-Gabaly in
November to clarify its data protection policy to be
consistent with its TRIPS obligations. However, GOE
officials have said previously that they believe their policy
is already in accordance with their TRIPS obligations.

10. (U) Gabaly has conceded that a new streamlined 120-day
marketing approval system for pharmaceuticals does not yet
function as intended. Delays in the process continue to
affect the term of data protection for new pharmaceutical
products, which begins on the day of application.

11. (U) Although current procedures appear to leave the door
open for the GOE to issue marketing approvals to unauthorized
copies of pharmaceutical products, Gabaly has pledged
repeatedly that the GOE will not do so, and Egypt has not
issued marketing approvals of such pirated drugs during the
last three years.

12. (U) The Patent Office has reported to us that it has
eliminated the pending backlog of "mailbox" pharmaceutical
patent applications filed since 1995, although the ultimate
disposition of the applications remains unclear.

13. (U) COMMENT: We believe that our engagement with the
GOE on this issue and the continuing efforts of private
industry to promote IPR protection and awareness in Egypt has
resulted in incremental improvement. We will evaluate this
record and the work that lies ahead in our upcoming Special
301 submission. END COMMENT.
RICCIARDONE

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