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Cablegate: Sri Lanka: Success in Garment Ipr Cases; Less Progress In

VZCZCXRO4853
RR RUEHLMC
DE RUEHLM #1252 2550227
ZNR UUUUU ZZH
R 120227Z SEP 07
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 6793
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHNE/AMEMBASSY NEW DELHI 1350
RUEHKA/AMEMBASSY DHAKA 0398
RUEHIL/AMEMBASSY ISLAMABAD 7386
RUEHKT/AMEMBASSY KATHMANDU 5509
RUEHKP/AMCONSUL KARACHI 2240
RUEHCG/AMCONSUL CHENNAI 7982
RUEHGV/USMISSION GENEVA 2310
RUEHLMC/MILLENNIUM CHALLENGE CORP

UNCLAS COLOMBO 001252

SIPDIS

SIPDIS

STATE FOR SCA/INS AND EB/TPP/IPE
STATE PASS USTR FOR DARLA BROWN AND ADINA ADLER
MCC FOR D NASSIRY AND E BURKE
GENEVA PASS USTR

E.O 12958: N/A
TAGS: ECON ETRD KIPR EAID KMCA CE
SUBJECT: SRI LANKA: SUCCESS IN GARMENT IPR CASES; LESS PROGRESS IN
MUSIC AND SOFTWARE

REF: COLOMBO 128

1. Summary: US apparel brands have found some level of success in
combating piracy in Sri Lankan courts. In August 2007, the Colombo
Commercial High Court issued an order in settlement in favor of
Polo/Lauren, LLP, the largest IPR enforcement case in the apparel
sector to date. Other companies are also finding success in the
court system; however, penalties remain relatively low. End
summary.

----------------------------------------
Favorable Decision for Polo/Lauren LLP
----------------------------------------

2. In August 2007, the Colombo Commercial High Court issued an
order in settlement of the largest IPR enforcement case in the
apparel sector. The court ordered local company Jinesha Garments
(Pvt) Ltd to py Polo/Lauren LLP Rs 1.25 million (approximately USD
11,200), required Jinesha to deface the logos of its fake "Polo"
garments, and required Jinesha to agree to refrain from using the
Polo trademark in the future. This case was initiated following a
police raid which seized over 17,000 counterfeit Polo brand T-shirts
from Jinesha Garments (reftel). The company had been producing fake
"Polo" garments for more than three years on order from a local
businessman. The business subsequently exported the fakes,
primarily to the United States.

---------------------------------
Successes Coming, Albeit Slowly
---------------------------------

3. Sudath Perera, a local lawyer representing Polo/Lauren as well
as several other leading apparel brands, told EconOff that his
company has recently had other successes in IPR enforcement. In
addition to Jinesha Garments, at least ten manufacturers, exporters
or retail outlets dealing with fake "Polo" garments were taken to
court during 2005-2007, five of which were settled successfully in
the petitioner's favor. Others are pending. Similarly Perera, on
behalf of his clients, charged five local entities for the sale of
fake Victoria's Secret garments. Among the violators are well known
high-end retail outlets in Colombo. To date, one of these cases was
settled.

4. Comment: These cases, while a positive step, demonstrate that
the onus of combating piracy lies with the rights holders. The
Jinesha factory was raided only after Polo/Lauren LLP complained to
the police. Initiative by Police or Customs is rare. And while the
garment sector is pleased that at least some action is being taken,
the penalties are too low and the lack of political will to fight
IPR violations continues to hurt companies' bottom line. Recently,
U.S. music and software industry representatives stated that
insufficient government enforcement against IPR violations was
harming their ability to work in Sri Lanka. The software industry
is looking into creative ways to engage the local industry in the
hopes that it can encourage a greater response by the government.

5. Comment, Con't. The Embassy and the American Chamber of
Commerce continue to address these problems locally. AmCham,
working closely with embassy, developed and is now implementing a
well-received IPR awareness campaign in print, radio, and
television. Post continues to promote this issue in both high-level
meetings and at the working level. Earlier this year post arranged
for IPR training for magistrates; USDA has also provided Ag-focused
IPR training for Sri Lankan officials. Post will continue to look
for further such activities to increase awareness and positive
action locally.

BLAKE

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