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Cablegate: Nicaragua: Mixed Results On Police Ipr Enforcement

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMU #1051/01 2311930
ZNR UUUUU ZZH
R 181930Z AUG 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3034
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001051

STATE FOR WHA/CEN, EB/TPP/IPE
DEPT PLEASE PASS TO JUSTICE FOR OPDAT ROBERT LIPMAN
STATE PLEASE ALSO PASS TO USTR FOR ANDREA MALITO
TREASURY FOR SARA GRAY
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
USDOC PLEASE PASS TO USPTO FOR BARBARA MCCAFFREY

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD KIPR USTR NU
SUBJECT: NICARAGUA: MIXED RESULTS ON POLICE IPR ENFORCEMENT
STRATEGY

REFS: A) MANAGUA 225, B) 07 MANAGUA 2654

SUMMARY
-------

1. (SBU) In 2008, the Nicaraguan National Police is implementing a
strategy to improve intellectual property rights (IPR) enforcement
that includes a public awareness campaign, training for staff, and
raids against the producers and distributors of pirated goods. In
addition, the police seek better cooperation with industry to combat
piracy and trademark and copyright infringement. We share the
concerns of the police and working-level Government of Nicaragua
(GON) officials that recent reforms to the new Criminal Code
undermine efforts to improve IPR enforcement. The GON has yet to
convict, fine, or imprison any IPR offender this year.

IMPROVING IPR ENFORCEMENT
-------------------------

2. (SBU) In 2008, the National Police has been implementing its
strategy to improve IPR enforcement. The components of this
strategy are a public awareness campaign against piracy, training
for staff on the application of IPR laws and the detection of
pirated goods, and raids and seizures of pirated goods and
production equipment. The police conducted its public awareness
campaign from January until March, targeting three open air markets
in Managua where pirated goods are abundant. Police officers
informed vendors of pirated goods that piracy is illegal and anyone
caught producing and selling these products will be arrested and
prosecuted. The campaign also attempted to dissuade customers from
purchasing pirated goods and highlighted the adverse impact of
piracy on the Nicaraguan economy.

3. (SBU) With regard to training, the police participated in two
capacity building workshops this year. In February, Nicautor, an
association that advocates IPR enforcement and protection for
authors and composers, trained a class of 30 police officers and
public prosecutors on IPR enforcement under the new penal code. The
GON also organized a training course in July for 110 police officers
in the Department of Leon on the new penal code. The Embassy has
also arranged training for judges and patent and trademark
officials. In May, the Embassy sent three judges on a U.S. Patent
and Trademark Office (USPTO) IPR course. In September, we will send
two GON officials responsible for patent and trademark protection to
USPTO's course on the Madrid Protocol for trademark protection.

ENFORCEMENT RESULTS
-------------------

4. (SBU) As of July, the GON has conducted six raids. The police
seized a total of 938 drums of bottled water in which the trademark
rights of "Pura Fuente (Pure Fountain)" had been violated. The
police also seized 80,000 blank CDs and DVDs and six recording
units, 350,000 pirated music CDs and music video DVDs, and 12
computers, 46 televisions, and 3 multipurpose copiers. The monetary
value of the seized goods is approximately $803,000. [Note: The
police calculated the monetary value of the pirated CDs and music
video DVDs based on the market price of 20 cordobas or $1.00 per
disc. The sales price for blank CDs is five cordobas or 25 U.S.
cents.]

5. (SBU) The Prosecutor General's Office indicted thirteen IPR
offenders as of the end of June. Seven cases await adjudication by
the courts. Six cases were dismissed for a lack of sufficient
evidence. Dr. Leyla Prado, head of the Prosecutor General's IPU
Unit, complained that the loss of key staff and budget cuts this
fiscal year limited her unit's ability to participate in raids,
conduct investigations, and file cases with the local courts. She
added that there have been no arrests, convictions, or fines against
any IPR offender this year. At the same time, she noted that there
has been an increase in IPR related complaints, particularly
trademark infringement infractions.

INDUSTRY COOPERATION
--------------------

6. (SBU) The police have sought improved cooperation with industry
to combat piracy and other IPR crimes. On June 26, Econoff met with
Major Francisco Obando, National Police Director for the Economic
Crimes Unit. Obando stated that although Nicautor organized IPR
training for the police in February, the police want more assistance
from industry on detecting trademark and copyright infringement, and
need better equipment, such as computers and scanners, digital

cameras, and digital product code scanners, to enhance the Unit's
capabilities. To facilitate the cooperation with industry, the
Embassy will host industry and police representatives in a meeting
on August 26 to discuss IPR enforcement and protection.

CONCERNS ABOUT NEW CRIMINAL CODE
--------------------------------

7. (SBU) Privately, Obando and Prado complained that reforms to the
new Criminal Code weaken IPR enforcement. The National Assembly
approved amendments to the Copyright Law in 2006 to add a provision
that the Prosecutor General's Office could investigate an IPR crime
ex oficio, without a formal compliant. The Criminal Code approved
in November 2007 repealed this provision. [Note: In separate
meetings with Embassy officials, Ministry of Trade, Industry and
Development (MIFIC) officials have argued that the Procedural
Criminal Code allow for ex-officio enforcement.]

8. (SBU) The National Assembly also weakened penalties for copyright
violations in the new Criminal Code. In 2006, amendments to the
Copyright Law stiffened penalties for IPR crimes, including fines
ranging from 3,000 to 25,000 cordobas ($160 to $1,315) and prison
sentences of up to two years. The new Criminal Code adopts aspects
of Sweden's penal code to calculate the fine for an IPR offender
based on one-third of that person's daily salary multiplied by 90 to
150, depending on the severity of the crime. The new Criminal Code
also reduces prison sentences to a maximum of one year (Ref A). The
new Criminal Code came into effect on July 9, 2008.

9. (SBU) Obando said the new Criminal Code restricts the police's
ability to act independently because they must wait to receive a
formal complaint about IPR violations before they can undertake a
raid. He asserted that the police would like the flexibility to
conduct surprise raids. Prado noted that her unit, the police, and
some MIFIC officials have raised these concerns during interagency
meetings. She added that her MIFIC colleagues have stressed that
GON commitments made as a party to the United States - Central
America - Dominican Republic Free Trade Agreement (CAFTA-DR) in 2006
were in line with Nicaragua's obligations as a member of CAFTA.
Prado added that she and her GON colleagues are trying to persuade
senior-level government officials to revert to the 2006 amendments,
or introduce new legislation that is consistent with the country's
CAFTA commitments.

COMMENT
-------

10. (SBU) The National Police is confident that its strategy will
improve IPR enforcement, but so far this year the GON has not
convicted, fined, or imprisoned any IPR offender. Although the
police appear to be committed to improving IPR enforcement, we are
concerned that the new Criminal Code limits the ability of the
police to conduct raids and seize pirated goods. Meanwhile, it
appears as if IPR protection continues to be a low priority for
senior-level officials. End Comment.

SANDERS

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