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Cablegate: Turkey: 2007 Advance Special 301 Initiative Update

VZCZCXRO0371
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHAK #3040/01 3611612
ZNR UUUUU ZZH
R 271612Z DEC 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 4773
INFO RUEHIT/AMCONSUL ISTANBUL 3680
RUEHDA/AMCONSUL ADANA 2559
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 04 ANKARA 003040

SIPDIS

EB/TPP/IPE FOR JBOGER
PLEASE PASS USTR FOR JCHOE-GROVES AND MMOWREY
USPTO FOR JURBAN
USDOC FOR ITA/MAC/CRUSNAK

SENSITIVE
SIPDIS

E.O.12958: N/A
TAGS: ECON ETRD KIPR PGOV TU
SUBJECT: TURKEY: 2007 ADVANCE SPECIAL 301 INITIATIVE UPDATE

Ref: A) STATE 158938, B) STATE 107629

ANKARA 00003040 001.2 OF 004


Summary
-------

1. (SBU) The Turkish government has made little progress on six
action items in the 2007 Advance Special 301 Initiative Action Plan
since we presented it to them in August. Foreign Trade
Undersecretariat (FTU) officials enthusiastically accepted the plan
but, we surmise, ran into resistance with the other agencies
responsible for implementing the changes requested. On the first
three action items, which deal with Pharmaceutical issues, the GOT
has shown the most ambiguity and the least tangible action. For the
piracy and counterfeiting action item, industry interest groups are
pleased with the cooperation from the Turkish police but tell us
that more is needed from Turkish Customs officials and the
judiciary. The Ministry of Culture has taken the lead in ensuring
that government offices use licensed software, as requested in the
fifth item, but statistics are not yet available on compliance. FTU
officials have agreed to a DVC with USTR in January, and we
encourage USTR to use this opportunity to focus on the final action
item, deficiencies in the Turkish IPR legislation implementing WIPO
Internet Treaties. We would welcome a visit by D/USTR Veroneau in
January to reinforce our IPR message but recognize that there is
little time left to complete these action items before the 2008
Special 301 Report and U.S.-Turkey TIFA talks. End summary.

Pharmaceutical Issues
---------------------

2. (U) Action Items: 1) Provide quarterly updates to AiFD and the
U.S. on the status of the remaining applications filed by generic
pharmaceutical manufacturers prior to January 1, 2005, indicating
whether or not any have been rejected or approved and which
applications have yet to be completed by the applicant; 2) Amend the
law that improperly terminates data protection upon the expiration
of the Turkish patent term of protection; 3) Implement a system of
coordination between Turkish health and patent authorities in order
to prevent the issuance of marketing approvals for patent-infringing
copies of pharmaceutical products.

3. (SBU) As with previous Special 301 cycles, Turkish officials have
shown the greatest ambiguity on pharmaceutical issues. U.S.
pharmaceutical companies operating in Turkey told us they are
pleased with the Turkish Ministry of Health's (MOH) unofficial
"moratorium" on the remaining generics applications filed prior to
the January 1, 2005 start of Turkey's data exclusivity legislation.
They welcomed our approach in the Advance Special 301 Initiative
that asked for quarterly updates on the status of these applications
versus demanding action from the MOH on the applications. They
currently receive sporadic updates from the MOH every 3 - 6 months.


4. (SBU) After receiving the Advance Special 301 Initiative in
August, FTU officials asked for our assistance in organizing a
meeting to include Turkey's research-based pharmaceutical lobby
group AiFD, AiFD's U.S. membership, FTU and the Ministry of Health
(MOH) to discuss the pharmaceutical-related action items. We
communicated this request to the PhRMA company local representative
who heads the Local American Working Group (LAWG), but did not
receive a response. We have now put FTU in direct contact with
AiFD's Secretary General, Engin Guner, to arrange the meeting, but
it has not yet occurred in part because of hesitation on the part of
the companies to meet directly with the GOT on these issues.

5. (SBU) Guner told us that the top issue for research-based
companies in Turkey has shifted in 2007 from data exclusivity to
product reimbursement approval within the state healthcare system.
He cautioned that pushing Turkey's MOH to make decisions on the
outstanding generics applications filed prior to January 1, 2005,
would most certainly prove counterproductive and bring favorable
decisions for the generics manufacturers.

6. (SBU) U.S. PhRMA company representatives in Turkey are not overly
concerned about the law that improperly terminates data protection
upon the expiration of the Turkish patent term of protection. The
current patent term lasts twenty years, far beyond even the most
generous data exclusivity provisions. In theory, they understand
why USTR would take issue with such a law and support its
abolishment, and are somewhat concerned that at some point in the
future, patent and data exclusivity terms could catch up with each
other. They believe that the provision was implemented at the last
minute to appease Turkey's powerful generics producers. Turkish
officials have said nothing about this action item since receiving
the Special 301 Initiative from us in August.

ANKARA 00003040 002.2 OF 004

7. (SBU) U.S. PhRMA company representatives in Turkey have mixed
views about how to implement the request to create a system of
coordination between Turkish health and patent authorities similar
to the one used in the U.S. One U.S. company representative
cautioned against pushing anything that would require generic and
innovative companies to publish their applications for marketing
approval in the Turkish National Gazette. He voiced a previous
request that the Turkish MOH and Patent Institute (TPI) develop a
system of linkages. Turkish officials maintain that their system is
in compliance with EU norms. They also argue that a linkage system
between the MOH and Turkish Patent Institute is not an international
requirement and therefore not something on which the GOT is ready to
expend limited resources. There has only been one case of a
patent-infringing product reaching the market, a generic of the Eli
Lilly antidepressant Zyprexa.

Piracy and Counterfeiting
-------------------------

8. (U) Action Item: 4) Continue the IPR enforcement campaign against
piracy and counterfeiting (especially against book piracy) and
provide quarterly and annual statistical readouts of success. In
particular, please provide updates on the Turkish Government's plans
to:
-- provide training to police and customs officials on fighting IP
infringement;
-- implement a public awareness campaign;
-- issue policies or regulations to stem piracy and counterfeiting;
and
-- cooperate with rights holders to undertake and publicize
substantial enforcement IPR actions.

9. (SBU) The Turkish Ministry of Justice (MOJ) provided the
following seizure statistics through December 12, 2007*:

2006 2007* Total
---- ---- -----
# of operations: 4,752 3,569 8,321

# arrested: 5,289 3,970 9,259

CONFISCATED MATERIAL:
CD/VCD w/out banderole: 4,581,878 2,008,654 6,590,532

DVD w/out banderole: 436,302 476,846 913,148

Books w/out banderole: 217,745 222,107 439,852

Video Cassette w/out
Banderole: 1,512 388 1,900

Cassette Tapes w/out
Banderole: 75,295 26,943 102,238

Pornography: 160,078 83,867 243,945

CD/VCD w/ banderole: 5,002 12,165 17,167

Books w/ banderole: 2,755 10,490 13,245

Cassette Tapes w/
Banderole: 7,531 54,900 62,431

CD/VCD/DVD Covers: 138,943,851 8,202,553 147,146,404

10. (SBU) Representatives of Turkey's music and motion picture
intellectual property protection interest groups, MU-YAP and AMPEC
respectively, told us that overall they are pleased with the Turkish
National Police and Jandarma's cooperation in conducting raids and
seizures of pirated materials. The 2006 law providing cash
incentives for law enforcement officials involved in such raids has
reaped substantial benefits. Problems still remain, however, in the
court system and with Turkish Customs officials. Ahmet Asena,
Secretary General of MU-YAP, told us that with the increase in the

SIPDIS
availability of Internet music piracy, judges with little training
on the intricacies of IPR law have had difficulty successfully
prosecuting the cases with the evidence presented. AMPEC Secretary
General Nilufer Sapancilar told us that Turkish Customs officials
lack motivation and prefer to prosecute piracy cases under the
smuggling law instead of the IPR law because it is easier and the
penalties are more severe.

11. (SBU) Asena explained that the decrease in the amount of pirated
music seized is because sellers are no longer stockpiling illegal

ANKARA 00003040 003.2 OF 004


copies. Instead, consumers go to a place where they can buy pirated
music and have a mix CD-R burned for them. Sapancilar told us that
seizures have decreased recently because storage warehouses are full
and new ones are being built but have not been completed. While
Turkish legislation allows a prosecutor to introduce a sample of the
seized goods as evidence during a case, Turkish judges still insist
that the entire seizure be stored in warehouses as evidence
throughout the court proceedings. This evidence must be maintained
throughout the appeals process as well, and since all IPR cases must
go to Turkey's 7th Court of appeal, this means long delays and
storage time. There has not been an appellate decision in an IPR
case since 2004. Sapancilar was pleased to report, however, that
street sales of pirated motion pictures are down 80% in Turkey, and
street vendors are scarce.

12. (SBU) Both Asena and Sapancilar praised the latest amendment to
Turkey's IPR law that allows a court to shut down an Internet site
with illegal content. Both have had success in quickly shutting
down access to sites that permit illegal downloading, including
piratebay.com and other music piracy sites. The legislation
requires that the site be blocked within ten days of a complaint,
and both said the courts are adhering to this requirement.

13. (SBU) Sapancilar provided statistics on the number of
investigations, raids and legal actions taken from 1988 through
October 2007. A breakout of the last three years is as follows:

Year Investigations Raids Legal Action Decisions
Taken
---- -------------- ----- ------------ ---------
2005 958 926 885 49
2006 2070 1655 1585 60
2007 1021 (10/07) 857 828 124

Software Piracy
---------------

14. (U) Action Item: 5) Issue a government-wide request for
statistical reports demonstrating compliance with the 1998
governmental decree mandating the use of licensed software in
governmental ministries, as well as monitor compliance of ministries
with the decree. Take actions against business software piracy in
the private sector and by individuals, including by initiating
enforcement actions and launching a public awareness campaign.

15. (SBU) Turkey's Ministry of Culture and Tourism has
responsibility for reissuing the Prime Ministerial decree requiring
the use of licensed software in government agencies, something they
hope to have completed by early next year. Statistics are not yet
available about government compliance.

16. (SBU) Turkey's Business Software Alliance (BSA) chapter chair
Elcim Barkay expressed little concern about pirated software use in
government offices but told us that currently about 60% of software
used in Turkish homes is unlicensed. She plans to shift BSA and
Microsoft's (for whom she works) focus from the criminal aspects of
using pirated software to a public awareness campaign on how respect
for IPR can bring better jobs and a stronger economy for Turkey's
youth. Barkay is also focusing on programs in Turkey's elementary
schools and hopes to fund a competition in Turkey's universities
where students will design a public awareness campaign. She agreed
that Turkish judges are having difficulty prosecuting IPR cases.
She offered BSA's assistance in translating the training materials
provided to English-speaking judges who participate in USPTO courses
in the U.S. into Turkish for the 90% of Turkish judges who do not
speak English.

WIPO Treaties
-------------

17. (U) Action Item: 6) Work to address remaining deficiencies in
Turkey's copyright law to implement fully the WIPO Internet Treaties
(WCT and WPPT). The U.S. will work together with Turkey to ensure
Turkey's full implementation of the WIPO Internet Treaties.

18. (SBU) Turkish government officials have taken great pride in
their 2007 ratification of the WIPO Internet Treaties. We would
suggest that USTR use the proposed January 2008 DVC with FTU
officials as an opportunity to explain in better detail the
deficiencies found in Turkey's current copyright legislation.

Comment
-------

19. (SBU) Turkey has made little progress on the Advance Special 301

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Initiative. While FTU officials enthusiastically received it, we
believe that they met resistance from the other Turkish ministries
and agencies responsible for implementing the action items. While
industry has noted some positive developments, the situation on the
ground still indicates that Turkey's IPR legislation is sufficient,
but its implementation and enforcement is not. During a December 5
meeting, PhRMA company representatives in Turkey told us they would
go into this year's Special 301 review with no preconceived ideas
about their recommendation. Subsequently, however, they indicated
that PhRMA will likely recommend that Turkey remain on the Priority
Watch List in 2008, a move that makes it difficult to bring Turkey
down to the Watch List without tangible action by the GOT between
now and April 2008. We welcome a visit by D/USTR John Veroneau in
January to reinforce our IPR message but recognize that there is
little time left to complete these action items before the 2008
Special 301 Report and U.S.-Turkey TIFA talks. End comment.

WILSON

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