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Cablegate: U.S.-Brazil Ipr Discussions at the Bilateral Commercial

VZCZCXRO8921
PP RUEHRG
DE RUEHBR #1188/01 1651347
ZNR UUUUU ZZH
P 141347Z JUN 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5767
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2279
RUEHSO/AMCONSUL SAO PAULO 7196
RUEHRG/AMCONSUL RECIFE 4965
RUEHBU/AMEMBASSY BUENOS AIRES 4086
RUEHAC/AMEMBASSY ASUNCION 5497
RUEHMN/AMEMBASSY MONTEVIDEO 6315
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHDC
RUCPDO/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001188

SIPDIS

STATE PASS USTR -- SULLIVAN
NSC FOR FEARS
AID FOR LAC
TREASURY FOR OASIA - DAS LEE AND DDOUGLASS
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA
USPTO FOR PINKOS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KIPR ETRD BR
SUBJECT: U.S.-Brazil IPR Discussions at the Bilateral Commercial
Dialogue

1. (SBU) Summary. On June 6, Secretary Gutierrez inaugurated in
Rio de Janeiro the bilateral U.S.-Brazil Commercial Dialogue
(septel). At that event, US Patent and Trademark Office (USPTO)
Deputy Steven Pinkos conducted an IPR Breakout session with
officials from INPI (Brazil's Patent Institute) and the Ministry of
Development, Industry, and Commerce. During that upbeat hour-long
session, INPI President Roberto Jaguaribe briefed USG officials on
INPI's hiring initiative, its efforts to reduce the long
patent/trademark backlog, and ongoing plans for training. In
addition to Jaguaribe, the Brazilian delegation consisted of Marcio
Heidi Suguieda (Trade Advisor to the Ministry of Development,
Industry, and Commerce), Carlos Pazos (INPI Director of Patents),
Leopoldo Coutinho (INPI Coordinator for International Cooperation,
and Marcus Vinicius Dudkiewicz (Dep. Coordinator for International
Cooperation). Steve Pinkos (Deputy Director USPTO), Dorian
Mazurkevich (slated to become the USPTO attache in Sao Paulo), Rio
de Janeiro Consul General, AmEmbassy Brasilia Econ Counselor, Rio de
Janeiro FCS Commercial Assistant Patrick Levy, represented the USG.
End Summary.

2. (SBU) In the June 6 meeting, Jaguaribe made the following
points:

-- Hiring. INPI has made good progress in hiring new examiners. 105
of 350 new patent examiners are on board as well as 45 of 104
planned new trademark examiners. The entry process has been
tortuous as INPI has had to get Executive and Congressional approval
to create the positions and Finance Ministry and Planning Ministry
approval to fill them and pay employee salaries. While the number
of examiners is increasing, keeping INPI at full staff is difficult
as employees constantly depart the agency for higher-paying job in
either the private sector or other government ministries.

-- Training. The new patent hires will be divided into two groups,
with training of the first set to take place in August and the
second in November. On trademark, the new examiners will begin
training in June. Scheduling training has been problematic as it
takes skilled examiners away from the patent/trademark examination
process. The EU, Germany, and England are lending a hand in the
training process as Brazilian patent doctrine is modeled more along
European lines than the US model. INPI expects to host ten trainers
from Europe who will stay in Brazil for 6 months. In addition,
INPI would welcome training TDYs from USPTO experts, for a minimum
of two weeks (but preferably longer) in duration.

-- Trademark Backlog. The backlog stands at 600,000 or 6 years (as
INPI receives 100,000 applications a year). Currently, INPI has the
capacity to deal with a backlog of about 150,000, so Jaguaribe has
put extraordinary procedures in place.

-- Paperless Processing. Jaguaribe's solution has been to simplify
trademark examinations through paperless processing. This increases
the risk of mistakes (and lawsuits) though he termed the results
"quite adeduate." Substantively, paperless processing means that
INPI no longer checks the reliability of a petitioner's powers of
attorney and whether a company is active in the area in which it
seeks the trademark -- both legal requirements

-- Initial Pilot Program. Under the initial paperless pilot
program, 30 of INPI's best examiners multiplied their trademark
processing productivity 10-fold. This cohort has closed 70,000
cases so far this year -- with 300,000 expected to be closed by
year's end. Paperless processing is not appropriate for cases where
a party has opposed a trademark application, Jaguaribe stated, as
these cases (18% of the total, or about 120,000) are more complex.
Of the 480,000 unopposed cases, INPI estimates that about 240,000
are likely no longer of interest to the petitioner given the
extended period of time during which these applications have
remained pending. So after it has fully implemented paperless
processing (in June/July 2006), INPI plans to contact applicants to
find out if they want to proceed with their trademark petition.

-- Outlook on Trademarks. While he acknowledged that there may be
some legal problems associated with this approach, Jaguaribe

BRASILIA 00001188 002 OF 002


indicated that he planned to face them when the time came. He
forecast that by November 2006, INPI would be dealing with trademark
applications filed this year. Overall, Jaguaribe opined that 9
months was the floor under which INPI would not be able to further
reduce the backlog.

-- Patent Backlog. The backlog on patents currently stands at
130,000; in 80,000 cases petitioners have requested an exam but INPI
has not yet been able to look at their applications. Presently,
INPI has the capacity to close 13,000 to 14,000 cases per year,
though as the agency gets new examiners on board this total should
rise to 25,000 in 2007, 36,000 in 2008, and 40,000 in 2009. Given
its efforts to increase its corps of examiners, INPI anticipates
that it will be able to reduce the patent backlog to 40,000 within 3
years. Average waiting time for a patent is currently 5 years,
although in some areas it is higher (6 years in metallurgical cases
and 10 years for electronic cases). Given legal requirements and
legislatively mandated review periods, it will be difficult for INPI
to drop below a 4 year waiting time.

-- Shortage of Qualified Patent Examiners. INPI believes that in
key fields it needs to increase its stable of qualified examiners.
For instances, in the electronics field, it needs to increase from 8
examiners to 70; in the telecom area it has two qualified examiners
and in physics it has no one. Jaguaribe reiterated his request for
USG TDY training, specifically to help in those areas where INPI
expertise was wanting (i.e., electronics, telecom, physics as well
as nanotechnology, chemical, and biotech).

3. (SBU) USPTO Deputy Director Pinkos noted that his agency had
recently established a Global Intellectual Property Institute whose
mission was to train foreign government officials on all aspects of
IPR, including patent/trademark administration and enforcement.
Hiring was a challenge as well for USPTO, he added, though that
agency had experienced a great deal of success in augmenting its
workforce by increasing opportunities for telecommuting. Pinkos
stated that USPTO would soon have an attache posted at the U.S.
Consulate in Sao Paulo who would serve as an in-country liaison on
the full range of IPR issues, including technical assistance and law
enforcement training.

4. (SBU) This cable was cleared by USPTO prior to transmission.

Chicola

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