Cablegate: Certain Canadian Industries' Input On Possible Wto

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UNCLAS SECTION 01 OF 02 OTTAWA 002562

SIPDIS

SENSITIVE
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STATE PASS USTR FOR SMCCOY, TGARDE, SCHANDLER
COMMERCE PASS USPTO FOR AADAMS

E.O. 12958: N/A
TAGS: CA CH KIPR ECON ETRD AORC WTRO USTR
SUBJECT: CERTAIN CANADIAN INDUSTRIES' INPUT ON POSSIBLE WTO
DISPUTE ON CHINA IPR

REF: A. OTTAWA 2406 (NOTAL)

B. STATE 126686

1. (SBU) Summary: EconMinCouns and Econoff met with
Canadian Recording Industry Association (CRIA) head Graham
Henderson (protect) on August 24 to discuss IP, specifically
the USG's role in encouraging GOC to pass legislation
implementing the WIPO Internet Treaties. Henderson also
briefed us on the August 11 industry consultations in Toronto
on a possible WTO case against China (see ref A in which Doug
George of the Department of Foreign Affairs (DFAIT) stated
the GOC was still gathering Canadian industry input.)
Henderson said that the Canadian Anti-Counterfeiting
Coalition Network (CACN) industry representatives at the
meeting supported action to encourage China to enforce IPR.
He also indicated that George heard from Canadian
electronics companies with patent-infringement issues in
China, and that they also strongly supported GOC action to
pressure China to enforce IPR, although there was no
consensus on whether to join the WTO case. Henderson gave us
a letter signed by several IP industry associations (see para
2) that shows strong support for GOC action on IPR
infringement in China in reference to a proposed (and now
postponed) GOC trade mission to China. In addition,
Henderson also provided us with an internal CRIA memo
discussing the possible China WTO case (see para 3). The
Embassy obtained from another source Doug George's
presentation on the possible WTO case to the members of CACN.
Please email Econoff Beth Mader (madere@state.gov) for more
information on these documents. End summary.

CACN encourages GOC to urge China to protect IPR
--------------------------------------------- ---
2. (SBU) Henderson shared a copy of an industry letter to
Doug George and Industry Canada's Canadian Intellectual
Property Office (CIPO) Senior Policy Analyst Samuel
Steinberg. The letter calls upon the GOC to "ensure China
actively reduces its piracy levels and opens its markets to
intellectual property goods." This letter was sent to George
and Steinberg in reference to a planned GOC trade mission to
China (the trade mission is now postponed due to Trade
Minister Emerson's tight schedule). According to Henderson,
the trade mission would have included Emerson and Canadian
Heritage Minister Bev Oda and would have focused on Canadian
cultural trade. CRIA, which faces large losses in China due
to pirated music, organized an industry response in the form
of the letter to George and Steinberg to encourage the
inclusion of IPR issues in the trade mission. It is signed
by the presidents of the Canadian Independent Record
Production Association (CIRPA), the Canadian Motion Picture
Distributors Association (CMPDA), the Canadian Recording
Industry Association (CRIA), the Canadian Publishers' council
(CPC), the Music Industries Association of Canada (MIAC), the
Canadian Film and Television Production Association (CFTPA),
the Entertainment Software Association of Canada (ESAC) and
the Canadian Music Publishers Association (CMPA). As such,
it is an impressively wide-ranging and well-supported call
for the Canadian government to address IP issues in China.
It makes no reference to the WTO case, however.

CRIA wants GOC to join WTO case
-------------------------------
3. (SBU) Henderson also provided us with an internal CRIA
Q3. (SBU) Henderson also provided us with an internal CRIA
memo on the potential WTO case. The memo refers to a
powerpoint presentation made by Doug George at the August 11
meeting in Toronto; we obtained a copy of George's powerpoint
presentation from another source. CRIA's internal memo
includes detailed analysis, but basically boils down to
CRIA's answers to the two questions on which George solicited
industry input. The first question was: "Does Canada share
the US concerns regarding copyright?" CRIA's memo states "we
certainly do." George's second question was: "Can we
demonstrate serious prejudice to Canadian businesses?"
CRIA's memo indicates that they need to gather proof that
Canadian rights holders have exhausted legal means of redress
in China and evidence of harm to Canadian rights holders.
According to the memo and Henderson, CRIA is pushing DFAIT to
get Canada to join the WTO case. CRIA is trying to pull
together an industry group (drawing from CACN members) to
lobby the GOC to join the WTO case.

Other private industry opinions
-------------------------------
4. (SBU) We have made inquiries with other industry
organizations regarding their stance on the possibility of

OTTAWA 00002562 002 OF 002

Canada joining the United States in a WTO case against China.
CMPDA says that they will be following the U.S. Motion
Picture Distributors Association's lead on this issue. ESAC
expects not to take a position, because not all of their
members are in agreement and because their members' IP is not
Canada-based anyway (for example, Nintendo faces huge losses
in China, but Nintendo is based in Japan and therefore the
injury to Canada is less obvious.) CACN as a whole has not
come to an official position, and thus far it seems that CRIA
is leading the charge to get the GOC to join the US case.

GOC Plans
----------
5. (SBU) DFAIT's Nancy Segal (filling in for the
vacationing Doug George) described the CACN consultations at
the August 11 meeting as inconclusive, mentioning that many
concerns were raised about IPR in China, some of which had no
connection to the WTO case. She told us that the GOC is
still consulting internally on the matter while the Justice
Ministry's Trade Law office looks into legal questions. Not
only has DFAIT requested more information from CACN member
industry associations, but the GOC also intends to consult
with the provincial governments, possibly in the upcoming
"CTrade" provincial meetings in September. Segal said that
unless the provincial governments had already been lobbied by
their industries on the WTO issue, she would not expect the
provinces to have answers ready and there would therefore be
an additional delay in developing a GOC position on the WTO
case.

Embassy Next Steps
------------------
6. (SBU) The Embassy's internal IPR Working Group will meet
August 29. Please keep us informed of developments on the
potential WTO case, and let us know what next steps would be
most useful to USG agencies.

Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

DICKSON

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