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Cablegate: 2008 Special 301 Review: Embassy Bangladesh Input

VZCZCXYZ0000
RR RUEHWEB

DE RUEHKA #0266/01 0590950
ZNR UUUUU ZZH
R 280950Z FEB 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 6327
INFO RUEHNE/AMEMBASSY NEW DELHI 0519
RHEHAAA/WHITE HOUSE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS DHAKA 000266

SIPDIS

SIPDIS

WH FOR USTR/JENNIFER CHOE GROVES; DEPARTMENT FOR
EB/JENNIFER BOGER, ROBERT WATTS AND JOSHUA HALLOCK;
DEPARTMENT OF COMMERCE FOR CASSIE PETERS; NEW DELHI FOR
FCS/DOMINIC KEATING

E.O. 12958: N/A
TAGS: KIPR ECON ETRD BG
SUBJECT: 2008 SPECIAL 301 REVIEW: EMBASSY BANGLADESH INPUT

REF: SECSTATE 9475

1. (SBU) SUMMARY: The Government of Bangladesh (GOB) does
not effectively enforce intellectual property rights (IPR)
protections. Piracy of optical disks, software and books is
rampant in Bangladesh. The GOB is currently focused on higher
prioritized projects, including ensuring a transition to a
democratic government and responding to natural disasters
that threaten the livelihoods of millions. In the past year,
no high-level leadership support for enforcement of IPR laws
and regulations has been demonstrated. To create an external
incentive for substantive action on IPR protection, Post
concurs with the recommendation from industry groups and the
Regional IPR Attach to place Bangladesh on the Special 301
Watch list. END SUMMARY


GENERAL IP CLIMATE
-------------------

2. (SBU) The overall Intellectual Property (IP) climate in
Bangladesh is characterized by a lack of effective
enforcement of copyrights, and a limited protection of
trademarks. The existing domestic legislation includes the
Trademarks Act, 1940; Patents and Designs Act, 1911; and the
Copyright Act, 2000. The Copyright Law enacted in July 2000
updated Bangladesh,s copyright system with the goal of
brining domestic copyright legislation into compliance with
World Trade Organization,s Trade-Related Aspects of
Intellectual Property (TRIPS) requirements that will be
applicable to Bangladesh in 2013 (following a 2006 extension
granted to least developed countries). Further patent and
trademark laws were drafted in 2005, but have not been
formally enacted.

A vibrant economy in cheap, pirated optical disks (OD)
inhibits the supply of legitimately licensed OD entertainment
products from the US. No legitimate international content
(European or US) DVDs are commercially available in
Bangladesh. For international music content, the local
office of the International Federation of Phonographic
Industries (IFPI) estimates 95% of international music
content is pirated. Piracy in Bangladesh is helped by high
tariffs on imported CDs and DVDs.

Sales of pirated English-language books are unchecked.
Certain UK text-book manufacturers have developed
market-specific pricing schemes (offering books at a cost
less than in India, and just above production costs) to
establish legitimate distribution networks and to demonstrate
the quality advantages of legitimate products. The GOB,s
Ministry of Education is also a victim of piracy: even
government produced textbooks are pirated. However, on
February 24 Bangladesh,s Rapid Action Battalion (RAB) raided
several book sellers in Bangla Bazaar, seizing over 5,000
pirated books. The RAB stated it was acting on instructions
from the Ministry of Education. Beyond this, no consistent
enforcement steps have been taken in the past year to curb
the pirating of books in Bangladesh.

The deficient IP climate in Bangladesh hurts domestic
Bangladeshi producers as well as international IP rights
owners. One Bangladeshi software producer seeking
international IP protection has developed the practice of
registering the copyright for his software in Singapore.
Bangladeshi filmmakers seeking to maintain control over
distribution and product quality price their DVDs at the
level of pirated copies, to dissuade pirates from targeting
their productions. Bangladeshi musicians fare somewhat better
) lower cost structures and effective sales and distribution
networks apparently leads to a relatively stronger market
preference for legitimate Bangla music products. IFPI
estimates that the market rate of piracy for domestically
produced Bangladeshi music is about 60%.

Bangladesh,s airwaves also host IPR violations. ECONOFF has
learned from commercial FM radio station managers that no
station pays royalties on the music (international or
domestic) broadcasted. A businessman working in
telecommunications and software reports that Bangladesh,s
cell phone operators themselves are generally careful to
ensure that ringtones and wallpaper images they promote are
licensed. However, when cell phone networks act as carriers
for third party sellers of ringtones and wallpaper, they do

not take responsibility for ensuring the content is
legitimately licensed.

ENFORCEMENT OVERVIEW
--------------------

3. (SBU) The only notable enforcement actions against
copyright violations have been against pirated domestic
motion-picture content. Bangladesh,s Film Development
Corporation (a state-run enterprise) and the Movie
Producers,s Association have worked with law enforcement
agencies to curb the piracy of their films (on DVDs) prior to
commercial release in cinemas. In the past one year, IFPI
reports that one or two of these enforcement actions (against
pirated Bangla films) have been conducted every 30-40 days.
Enforcement action on pirated Bangladeshi motion-picture
content is apparently the result of specific lobbying efforts
by economically damaged parties. There have also been
enforcement actions against purveyors of pornographic content
DVDs. However, these actions appear motivated by laws
against pornography.

Trademark violations can be taken up in civil courts, and the
threat of legal suits is sometimes sufficient to encourage
compliance by trademark violators. Brands that are identical
or deceptively similar to Taco Bell and KFC are openly doing
business in Bangladesh. Even if a case is brought against an
alleged trademark violator, there is no guarantee of success
for the international trademark owner. A case brought by
Domino,s Pizza (US) against a local establishment known as
Dominous Pizza was decided in prior years in favor of the
Bangladeshi company.

SPECIFIC ASPECTS OF IPR PROTECTION
----------------------------------

4. (SBU) The following sections address specific area of
interest noted REFTEL.

A) Notorious Markets: Dhaka,s popular Bashundhara City Mall
contains a retail CD and DVD bazaar. Based on several surveys
by EMBOFF, and confirmed by the regional IPR Attach, no
legitimately licensed OD products are available in the dozens
of stores and stalls selling ODs. Throughout the mall,
restaurants, store names, product names, fake branded goods,
all feature clear trademark violations. Several wholesale
markets also exist for pirated OD content: Pathuakhali,
Stadium Market, New Market and Nilkhet are notable within
Dhaka. For pirated books, Bangla Bazaar and Nilkhet are
known sources. These markets are the major supply sources
for smaller retailers.

B) Optical Media Piracy (CDs, VCDs, DVDs): Bangladesh does
not regulate optical media manufacturing. There is no
licensing of optical media equipment and material inputs for
the purpose of controlling domestic production and export of
pirated ODs. There is no legal requirement for Bangladeshi
producers to use source identification (SID) codes on locally
manufactured CDs. Industry representatives report that the
majority of Bangladesh,s pirated OD manufacturing base has
been re-located from Pakistan into Bangladesh (following
stronger IPR enforcement efforts in Pakistan). Additionally,
they report Bangladesh is also becoming an exporter of
pirated OD products, with unmarked small packages of disks
being sent out of the country through the Bangladesh postal
system.

C) Software: Bangladesh,s IT infrastructure (public and
private) is based on the use of pirated software. According
to a 2007 study by the Business Software Alliance, Bangladesh
has the highest rate of software piracy in Asia, at 92%.
Worldwide, this places Bangladesh within the top five worst
countries for software piracy. Pirated software is easily
and inexpensively available. Companies that seek to purchase
licensed software are required to follow complex import
procedures involving letters of credit and pre-shipment
inspections.

The GOB does not ensure that government offices, state-owned
enterprises and semi-government organizations use only
licensed software or that they obtain sufficient licenses for
all copies of software in use by the GOB. A domestic
software services provider reports the GOB has copied
customized software without payment for additional licenses.
A Bangladeshi IT services provider complains that software
piracy by the GOB has sometimes been exacerbated by at least

one international donor though project specifications that
specify certain software requirements without accompanying
financial provisions.

D) TRIPS Implementation, FTA Implementation and Other
IP-Related Issues: Bangladesh is a signatory of the Uruguay
Round agreements, including the WTO's Agreement on
Trade-Related Aspects of Intellectual Property Rights
(TRIPs), and was obligated to bring its laws and enforcement
efforts into TRIPS compliance by January 1, 2006. However, a
November 2005 WTO decision granted extended the period for
TRIPs compliance for least-developed countries until July
2013. Categorized as a least-developed country by the WTO,
Bangladesh has until July 2013 to bring its laws and
enforcement efforts into TRIPS compliance.

E) Data Protection: There is no existing legislation in
Bangladesh on data protection (for pharmaceutical and
agricultural chemical companies), or any known efforts to
develop such regulations. Regarding patent infringing
pharmaceutical products, Bangladesh (as a least developed
nation) has a WTO exemption for TRIPs compliance on
pharmaceuticals until 2016.

F) Production, Import and Export of Counterfeit Goods:
Companies have in prior years reported receiving cooperation
from the Bangladesh Standards and Testing Institute (BSTI), a
government agency with responsibility for standards and
labeling regulation. BSTI has used its authority to regulate
deceptive labeling and trade practices to address IPR
violations in the misbranding of consumer goods. While BSTI
has been willing to investigate specific complaints, it has
insufficient resources to pursue a proactive campaign against
IPR violations in consumer goods. Post has received a
complaint in the past year regarding goods for sale in
Bangladesh falsely tagged as &made in the USA.8 One
company has complained about fake cosmetics being imported
into Bangladesh for sale in domestic markets. Other than OD
products, no specific complaints have been received about
fake goods produced in Bangladesh for export.

G) Enforcement: The GOB does not devote adequate resources to
the enforcement of IPR in Bangladesh. Lack of technical
expertise remains a significant problem for relevant
government agencies.

COPYRIGHT OFFICE: UNDERSTAFFED, INEFFECTIVE
-------------------------------------------

The Copyright Office said they normally receive about 400 to
500 applications per year. They point out how short-staffed
their office is: the Copyright Office presently has only four
professionals, out of which only one person is involved in
the examination of copyright applications. The office is
also acutely aware of its deficient grasp of the nuances and
technical details of copyright law.

Regarding the initiation of legal complaints against any IPR
violators, the Copyright Office has the power to act on its
own, but it does not often exercise this authority due to
insufficient staffing. The Copyright Office will refer to
police any complaint brought by an IP rights holder. Legal
action against two pirate optical-disk producers was
initiated from the Copyright office in September 2007. These
enforcement efforts, one against a foreign-owned company (the
owner is Pakistani and lives in the UAE), are currently
pending before the courts.

The Copyright Office described plans to initiate enforcement
through mobile courts, to include a Magistrate, accompanied
by 10 to 15 police officers. The Copyright Office would head
the mobile court. As a warning to IPR violators, the
Copyright Office said it would extensively advertise the
establishment of this court. No action or future date has
been set to commence this initiative. While they stated an
intention to take enforcement action on optical disks, it was
made clear that they would take no action will be taken on
the issue of pirated books, because of the potential impact
on Bangladesh,s students, invoking the TRIPS exemption for
Bangladesh based on its status as a least-developed country.
(Notably, the Ministry of Education recently did prompt
action against pirated textbooks.) The Copyright Office
requested USG help for translation of Bangladesh,s
Copyrights Law, technical training, computerization of the
Copyright Office, and assistance with setting up a website.
DEPARTMENT OF PATENTS, DESIGNS AND TRADEMARKS
---------------------------------------------

According the Department of Patents, Designs and Trademarks,
Bangladesh receives very few patent applications; the
majority of his office,s work is in the registration of
trademarks. The Patent Department reported that in the years
2003, 2004, 2005 and 2006 the number of patent applications
were 218, 316, 344 and 310 respectively; of those
applications the number of domestic applicants were 58, 48,
50 and 22 respectively. The majority of the domestic patent
applications were in the areas of homeopathy, traditional and
herbal medicines. By contrast, trademarks applications for
2004, 2005 and 2006 were much higher: 6,357, 7,425 and 6,940
respectively.

The legal basis of the Patent Office,s work is the Trademark
Act of 1940 and The Patent and Design Act of 1911. Patent
officials pointed out that a new trademark law is pending
before the Council of Advisers. Amendments for the patents
and the designs law also have been drafted. The amended
patent law is intended to bring Bangladesh into compliance
with the TRIPS Agreement. In a meeting with the Patents
Office, it was stated that the Ministry of Agriculture is in
the process of drafting legislation for the protection of
plant varieties. According to one Patent official, Bangladesh
is interested in becoming a party to the Patent Cooperation
Treaty (PCT), but a lack of qualified staff is a limiting
factor. The official predicted Bangladesh would probably
accede to the PCT by the year 2009.

To improve IPR protection in Bangladesh, a Patent Department
official suggested the GOB should combine all IP related
offices under one organization. The Patent Department
complained of being short staffed, but said the Department
will likely hire about 25 additional examiners within the
next year.

CUSTOMS OFFICIALS
-----------------

According to Customs officials, the GOB prohibits trade in
counterfeit or pirated goods. However, they acknowledged
there is a general lack of knowledge about IPR among the
public and customs officers. Bangladesh Customs would welcome
support from the USG for capacity building initiatives, in
particular training for officers on how to distinguish
between original and counterfeit goods.

Officials expressed frustration with the fact that certain
senior officers who developed competence in IPR issues had
been transferred. They reported there is little coordination
between the Department of Patents, Designs and Trademarks and
Copyright Office. Customs officials have the authority to
stop consignments if they have credible information that
counterfeit goods are being imported or exported, and there
are anecdotal reports of seizures of counterfeit goods coming
into Bangladesh from China.

COURT SYSTEM: OVERBURDENED AND INEFFECTIVE
------------------------------------------

Systemic problems in the courts prevent effective protection
of intellectual property rights. The magistrate and trial
courts are overburdened and rife with corruption. In the
rare cases when judgments are obtained, enforcement of the
judgments is problematic. Police and judges do not have the
necessary training to handle IPR violations.

H) Treaties: Bangladesh is not a signatory to the 1996 WIPO
Copyright Treaty (WCT) or the WIPO Performances and
Phonograms Treaty (WPPT).

I) Internet Piracy: The Government of Bangladesh takes no
efforts to combat internet piracy. Although no statistics are
available, it is likely that internet piracy is minor aspect
of IPR violations in Bangladesh. For IPR related uses,
internet penetration is limited to urban middle class and
elite communities. High-speed internet connections are
expensive and are generally not available to most
Bangladeshis.

MISSION ACTIVITIES
------------------

5. (SBU) Post works with various interest groups seeking
enhanced IPR protection in Bangladesh. ECONOFF is in regular
contact with the local IFPI representative regarding IPR
trends and GOB enforcement efforts. ECONOFF is assisting one
domestically-focused group to organize a multi-sectoral
dialogue to generate specific IPR policy recommendations for
the GOB. We work closely with the Foreign Commercial
Service,s regional IPR attach who visited Bangladesh in
September. We also have participated in awareness
initiatives sponsored by the Business Software Alliance and
the American Chamber of Commerce in Bangladesh.

COMMENT AND RECOMMENDATION
--------------------------

6. (SBU) The 2007 Special 301 reporting cable from Dhaka
stated that the Bangladesh Caretaker Government,s response
between 2007 and 2008 would be an important factor for the
2008 Special 301 review. Bangladesh,s Caretaker Government
is preoccupied with a host of issues including returning the
country to democratic government, aiding the victims of
Cyclone Sidr and two major floods, and tackling endemic
corruption. These priorities have directed leadership
attention away from addressing IPR protection and
specifically encouraging IPR enforcement actions. As a means
of encouraging the GOB to address IPR issues and its coming
TRIPs commitments, Post concurs with the recommendation of
industry groups and the Regional IPR Attach to include
Bangladesh on the Special 301 Watch List.

Pasi

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