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Cablegate: Czech Republic: Keep Them On the Ipr Watch List

VZCZCXRO3851
OO RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHPG #0117 0521542
ZNR UUUUU ZZH
O 211542Z FEB 08
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0087
INFO RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS PRAGUE 000117

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/NCE AND EB/IPE JBOGER
STATE PASS USTR FOR JCHOE-GROVES AND WMOORE
COMMERCE FOR 4232/ITA/MAC/MROGERS
COMMERCE PASS USPTO

E.O. 12958: N/A
TAGS: KIPR ETRD ECON PGOV EZ
SUBJECT: CZECH REPUBLIC: KEEP THEM ON THE IPR WATCH LIST

REF: A. PRAGUE 33

B. 07 PRAGUE 1228

1. (SBU) SUMMARY AND RECOMMENDATION: Post recommends the
Czech Republic remain on the Watch List for the 2008 Special
301 review for reasons stated in ref A. Since being placed
on the Watch List during the January 22 Out-of-Cycle Review,
the Czechs have made little progress in implementing their
IPR Action Plan and reducing IPR violations at the border
markets. Czechs continue to stress the amount of effort they
have put into the development of their action plan but
understand that the USG and industry are looking for results,
not just intent. However, given sustained Czech efforts,
elevated political will, and their desire to get off the
Watch List before taking over the EU Presidency in January
2009, Post suggests the USG offer another OCR in fall 2008 as
a carrot for the Czechs to implement their Action Plan and
show real results. The Czechs plan to submit a Special 301
response to USTR by the February 29 deadline. END SUMMARY
AND RECOMMENDATION.

POLITICAL PRESSURE RISES
------------------------
2. (SBU) Newly-appointed Ministry of Industry and Trade (MIT)
EU Department Director Lucie Sestakova told Econoffs that
Deputy Minister Martin Tlapa was "disappointed" by the Czech
Republic's placement on the Watch List and believed it was
"unfair" given all the effort the GOCR has put in to its IPR
Action Plan. Sestakova, lamenting that there has not been
sufficient time to implement the Czech IPR Action Plan, asked
whether the possibility to get off the IPR Watch List during
the April 2008 Special 301 review was "real." Econoffs
replied that the opportunity is real but only real results
would lead to removal from the Watch List. Econoffs also
reminded that the USG began engaging the Czechs about IPR
violations at the border markets in early 2007 but that an
Action Plan did not materialize until October. Sestakova
acknowledged the timeline and assured that the Czech Republic
would submit a response to USTR by the February 29 deadline
that includes data showing real improvements in the IPR
situation.

3. (SBU) Recently-appointed Vice Minister of Industry and
Trade for Trade and Bilateral issues Milan Hovorka told
econoffs February 4 that IPR violations at the border markets
are being discussed at the Ministerial level and expressed
his desire to cooperate with the USG to resolve the issue.
Hovorka, a sharp and reliable interlocutor, expressed his
desire to set up regular monthly meetings with the Embassy to
discuss bilateral issues, and said that the border market
violations will be one of his focus areas in these
discussions.

DEVELOPMENTS SINCE OCR REVIEW
---------- --- -------- ----
4. (SBU) Czech press reported that on February 5, a customs
officer inspecting the Vojtanov border
market (125 miles west of Prague) was stabbed during a
confrontation with a group of approximately thirty stall
owners. The police and customs agents responded with a
massive and sustained presence at the markets in the region
of Vojtanov/Cheb. Subsequent press reports indicate that the
sustained law enforcement presence has nearly eliminated the
sale of pirated goods at the markets in the immediate
vicinity, and actually caused vendors to start selling
legitimate goods. Local recording industry (IFPI)
representative Petra Zikovska commented to emboff that the
unfortunately incident may be just the kind of impetus Czech
local authorities need to enforce the rule of law at the
border markets.

5. (SBU) COMMENT: Keeping the Czechs on the Special 301 Watch
List will provide the necessary pressure the Czech government
needs to implement its IPR Action Plan and achieve timely
results at the border markets. Czech Prime Minister Mirek
Topolanek's February visit to the United States is providing
the necessary political pressure for the Ministry of Industry
and Trade to take appropriate action to get off of the
Special 301 Watch List. The real test will be to see if this
unprecedented political will lasts after the PM's trip is
over. In the meantime, Post suggests the USG offer another
OCR in fall 2009 to give the Czech Republic an additional
carrot to redouble their efforts and achieve results to get
off of the IPR Watch List before taking over the EU
Presidency on January 1, 2009.
Graber

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