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Cablegate: Bill Introduced to Strengthen Ip Protection

VZCZCXRO0869
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2866/01 2682105
ZNR UUUUU ZZH
P 242105Z SEP 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 3361
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1043
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC PRIORITY
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 MEXICO 002866

SIPDIS

STATE FOR EEB/IPE RACHEL WALLACE
STATE PASS USTR FOR TANUJA GARDE

E.O. 12958: N/A
TAGS: KIPR ETRD ECON
SUBJECT: BILL INTRODUCED TO STRENGTHEN IP PROTECTION

1. (U) Summary: As part of the Calderon Administration's
comprehensive strategy against organized crime, a ruling
party Senator has introduced a bill to amend the Mexican
Customs Law and give Mexican customs officials' additional
tools to protect trademark owners. The proposed
legislation authorizes customs officials to detain
suspected counterfeit goods for up to five days and calls
for the establishment of a customs trademark registry.
This initiative has been well-received within both the
public and private sectors, and eventual approval is
likely. End Summary.

2. (U) On Tuesday, September 7, PAN Senator Jorge A. Ocejo
Moreno introduced a bill to enhance the ability of the
Mexican General Customs Administration (Aduanas) to stop
the importation of counterfeit goods. Under the proposed
bill, Aduanas would be authorized to detain suspected
counterfeit goods for up to five days, in order to give
trademark owners and Mexican authorities adequate time to
secure appropriate action. Currently, customs officials
are not authorized to detain suspicious goods. Instead,
under Article 148 of the Mexican Customs Law (MCL), Aduanas
may retain goods and hold them in custody if ordered to do
so by a court, a public prosecutor, or an administrative
authority. However, Article 149 of the MCL places the
burden on the trademark owner to request such an action,
and goods are often released into circulation before the
authorities can act upon the request. This bill would
amend the contents of Articles 148 and 149 of the MCL and
grant Aduanas the legal faculties to seize temporarily the
imports of counterfeit goods.

3. (U) This proposed legislation does not remove the burden
from the trademark owner to launch a judicial or
administrative action of seizure, nor does it award the
same ex-officio authority to customs officials as they are
accorded in the United States and elsewhere, but it does
grant government officials and the private sector
sufficient time to cooperate with each other and help deter
the flow of counterfeit goods. It also appears to bring
Mexico into greater compliance with international norms as
stipulated in Article 58 of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS).

4. (U) Aduanas uses a random inspection system, through
which it inspects only about 7% of the merchandise that
enters Mexico. In 2008, Aduanas has performed 78 seizures
of more than 32 million counterfeit goods, after rights
holders secured actions ordering them to do so. The number
of seizures is up from 2007 (66), in which almost 43
million pirated goods were seized.

5. (U) Aduanas often lacks the necessary information to
identify counterfeit goods and notify trademark owners.
The proposed legislation also calls for the creation of a
database known as the Padrsn Unico de Marcas de
Importacisn, or the Central Registry of Marks of
Importation. This database would function much like the
Intellectual Property Rights Recordation system in the
United States, and similar registries in the European
Union, Argentina and Peru. Trademark owners would provide
a copy of their certificate of registration, the names of
authorized importers and distributors, contact information
for a legal representative, and other important
information. Aduanas and the Mexican Institute of
Industrial Property (IMPI) have been working to realize
such a database for some time, trying to match both
agencies' registration systems. Aduanas uses taxpayers'
registration numbers, called RFC, and IMPI uses a different
trademark registration number. This database is expected
to be up and running by December 2008, and before the
proposed legislation is likely to come into effect.

6. (U) An IMPI official told Econoff that the information
to be included in the database would be at the request of
interest parties. IMPI would be charged with reviewing and
confirming that the trademarks and information provided by
the requester are valid.

7. (U) Both Aduanas and IMPI have reacted positively to
this initiative. Both IMPI and Aduanas are providing
advice to the Senate in order to strengthen the proposed
legislation, such as what procedures must be taken should

MEXICO 00002866 002 OF 002


the detained shipment be found to actually contain
counterfeit goods. The American Chamber is also
supportive, and various members have told EconOff that they
will lobby for its swift approval.

8. (U) Congressional approval of this proposed amendment to
the MCL is likely; however, this legislative session is
full with energy reform legislation and next year's federal
budget pending congressional review. The same holds true
for a pending bill that would amend the Mexican Penal Code
and the Law of Industrial Property to provide federal
prosecutors the authority to pursue pirates and
counterfeiters ex officio. This "ex officio" bill passed
the lower Chamber in April and now awaits Senate action.
The question is not whether the Senate will support these
bills (Note: EconOff thinks it will. Post's robust and
continued cooperation with the GOM on IPR issues, with the
assistance of the private sector, DOJ, DOC, DHS and USPTO,
has had a positive influence on the perception and
protection of IP in Mexico. End Note.); it is whether the
Senate will be able to focus its attention on these IP
issues.

Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North
American Partnership Blog at
http://www.intelink.gov/communities/state/nap /

GARZA

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