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Cablegate: Ipr Conference Highlights Local Issues; Guangdong

VZCZCXRO7500
RR RUEHCN RUEHGH
DE RUEHGZ #0753/01 1840842
ZNR UUUUU ZZH
R 030842Z JUL 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 4087
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 GUANGZHOU 020753

SIPDIS

USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
STATE FOR EB/TPP MASSINGA, FELSING
STATE PASS COPYRIGHT FOR TEPP
STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO
USDOJ FOR SUSSMAN
DHS/CPP FOR PIZZECK
USPACOM FOR FPA

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KIPR ECON ETRD WTRO CH
SUBJECT: IPR Conference Highlights Local Issues; Guangdong
and Fujian Officials Refuse IPR Meetings

REFERENCE: Guangzhou 14710; Guangzhou 13563

(U) This document is sensitive but unclassified. Please
protect accordingly.

1. (SBU) Summary: Chinese and U.S. officials and companies
discussed a range of IPR issues and generally agreed on the
direction Guangdong must take on IPR matters at a recent
conference co-hosted by the U.S. Chamber of Commerce and the
Guangdong Provincial IP Office. The conference was part of
the U.S. Chamber's effort to engage with local Chinese
officials in IPR hot-spots such as Guangdong on best
practices and information sharing. Separately, Guangdong
and Fujian IP enforcement authorities denied our requests
for meetings -- a possible sign that local IP officials are
becoming less cooperative because of increased political
sensitivity due to a possible WTO case against China by the
United States. End summary.

2. (U) The "Guangdong Seminar on IP Protection and
Encouragement of Innovation" took place on June 28. It was
broken into four panels: global trends in trademark
protection and enforcement, best practices in anti-
counterfeiting and piracy enforcement, strengthening
administrative and criminal enforcement of IP rights, and IP
management and self-innovation by enterprises. Attendees on
the Chinese side included representatives from the Guangzhou
Mayor's office, the Guangdong IP Office, the Guangdong
Administration of Industry and Commerce (AIC), and the
Guangdong High Court. Attendees on the U.S. side included
Ronald Lew, federal judge from California's central district
court; Matthew Bassiur, federal prosecutor from the U.S.
Department of Justice's computer crime and IP section; David
Eoff, chief of DHS/ICE's commercial fraud and IPR
investigations unit; and Embassy IPR Attache Mark Cohen.
Representatives from the Quality Brands Protection Committee
industry association, P&G, and DaimlerChrysler were also
present. Consul General Dong contributed introductory
remarks.

Companies Say What They See
---------------------------

3. (SBU) P&G China Brand Protection Manager Shannon Young
started his presentation with some good news: the central
and regional governments are becoming more effective at
fighting counterfeiting and, for the first time in many
years, P&G has seen a "slight reduction" in overall levels
of counterfeiting. However, he added that most other
companies have seen an increase in counterfeiting. Young
had several criticisms of China's enforcement efforts:
administrative fines are not an effective deterrent; civil
suits are timely, costly, and relatively unsuccessful; case
transfers from administrative authorities to police are
still rare (though increasing); valuation of seized products
varies widely; and kingpins are not being arrested.
Nevertheless, he said too many people criticize China for
poor IP enforcement without understanding the details --
potentially poisoning the atmosphere for dialogue.

4. (SBU) Baker & McKenzie's Joe Simone said QBPC is
extending its landlord liability project -- which has
targeted Beijing's silk market -- into Shanghai, Guangzhou,
and Shenzhen. QBPC has already started investigations into
Guangzhou markets and had plans to meet Shenzhen officials
the following day. Hugh Stevens, TimeWarner's senior vice
president of international relations and public policy for
Asia Pacific and QBPC committee chair, laid out the
arguments for strong IP protection in China: infringement
puts consumers at risk, uses unacceptable labor practices,
supports organized crime, destroys brands, undermines
legitimate businesses, and gives China a bad name overseas.
Li Fushan, IP director for Skyworth, a Chinese company that
manufactures televisions, said companies should preemptively
register their IP in China and also to choose their disputes
wisely. He also complained that foreign companies sometimes
take advantage of Chinese companies' lack of understanding
of international IPR law -- citing a law suit against his

GUANGZHOU 00020753 002 OF 003


company filed by a British company with the same name that
develops TV programming.

Guangdong Officials: We're Trying!
----------------------------------

5. (SBU) Guangdong officials presented an optimistic picture
of their IP enforcement efforts and cited improvements.
They proclaimed the importance of IPR and innovation in
China's economic development and noted Guangdong companies'
high rate of IP registration. Liu Tongjiang, director of
Guangdong AIC's trademark department, said his office is
working more collaboratively than in the past, including
agreements with the Public Security Bureau (PSB), Customs,
Pan-Pearl River Delta regional governments, and Hong Kong
authorities. Li Xiaoping, director of Guangzhou AIC's
trademark department, said his office has located specific,
high-volume counterfeit markets where it is focusing its
efforts (see reftels for more details on Guangzhou and
Guangdong IP enforcement efforts based on their respective
IPR white papers). Zhang Youquan, director of anti-piracy
for the Guangzhou Copyright Bureau, said he considers public
education a crucial part of his office's IP efforts. (Note:
Econoff recently attended the taping of a Guangzhou TV
program in which high school students performed oral
recitations on the theme of protecting IPR. Judges
announced a winner and all of the participants received
copyright registration certificates for their speeches,
which would be published in book form and distributed to
local schools. End note.)

Contrasting the Chinese and U.S. Systems
----------------------------------------

6. (SBU) Participants seemed particularly interested in the
presentations by federal judge Lew, federal prosecutor
Bassiur, and ICE officer Eoff. When asked how U.S. courts
enforce their judgments, Judge Lew said this is rarely a
problem because lawyers ensure that relevant actions are
taken, often by the U.S. Marshall Service, which acts on the
court's behalf. He opined that China's record of poor
enforcement of judgments is not the fault of courts alone
but rather points to a systemic problem. Lew also noted
that U.S. claimants, unlike Chinese, can choose whether to
pursue a civil or criminal case. Criminal prosecutors use a
variety of criteria to determine whether to accept a case,
with monetary value being only part of the equation. In his
presentation, Bassiur said federal and local authorities
cooperate in a variety of ways to combat counterfeiting:
intelligence sharing on issues such as money laundering and
immigration, sharing of resources and specialized equipment,
and legal interpretation. ICE officer Eoff cited two recent
cases in which his office and PRC authorities cooperated to
arrest DVD and pharmaceutical counterfeiters, and noted that
ICE plans to set up a liaison office in Guangzhou by the end
of 2006.

Guangdong and Fujian Authorities Deny Requests for Side
Meetings on IPR
--------------------------------------------- ----------

7. (SBU) In contrast to the positive atmosphere prevailing
in the IPR conference, the Guangdong High Court refused our
request for a meeting, which would have included Judge Lew
and IPR Attache Cohen, citing previous commitments. Our
requests to meet with Fujian High Court, PSB, AIC, and
Copyright -- which would have included federal prosecutor
Bassiur and Cohen -- were also denied. The Fujian High
Court and PSB did not give reasons for their denials, but
AIC and Copyright withdrew their initial confirmations on
the pretext of the inclusion of Bassiur. In addition, a
Guangzhou middle court official chose not to attend the U.S.
Chamber conference, and a Guangdong PSB official withdrew
from the event at the last moment.

Comment: Backlash on Possible WTO IPR Case?
-------------------------------------------


GUANGZHOU 00020753 003 OF 003


8. (SBU) The Guangdong FAO often has been uncooperative in
arranging our requests for meetings on a variety of issues
in the past. However, these particular refusals were
surprising because we have met most of the offices before
without any trouble. Though it is too early to say for
sure, this could indicate that -- in the wake of USG
warnings of a possible WTO dispute resolution on IPR and the
recent Special 301 focus on IPR hot-spots in China -- local
authorities in South China have decided to avoid engaging us
because of the sensitivity of the issue and potentially
negative consequences.

DONG

© Scoop Media

 
 
 
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