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Cablegate: Secretary Locke's Participation in Ip Forum Advances Ipr

VZCZCXRO6929
RR RUEHCN RUEHGH
DE RUEHGZ #0619/01 3070810
ZNR UUUUU ZZH
R 030810Z NOV 09
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1070
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0321
RUEHGZ/APEC COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0852
RUEHCN/AMCONSUL CHENGDU 0258
RUEHHK/AMCONSUL HONG KONG 0329
RUEHGH/AMCONSUL SHANGHAI 0257
RUEHSH/AMCONSUL SHENYANG 0267
RUEHIN/AIT TAIPEI 0242
RUEHBK/AMEMBASSY BANGKOK 0062
RUEHNE/AMEMBASSY NEW DELHI 0017
RUEHGV/USMISSION GENEVA 0027
RUEAUSA/DEPT OF HHS WASHINGTON DC 0045
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0048
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0184
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC 0042
RUCNFB/FBI WASHINGTON DC 0037
RHEHAAA/NSC WASHINGTON DC 0084
RUEAIIA/CIA WASHDC 0304
RUEKJCS/DIA WASHDC 0300

UNCLAS SECTION 01 OF 04 GUANGZHOU 000619

SENSITIVE
SIPDIS

State for EAP/CM; EAP/EP; EEB/IPE; EEB/TPP; EEB/CIP
State for INL - JVigil
USTR for China Office; IPR Office; and OCG
Commerce for National Coordinator for IPR Enforcement
Commerce for MAS - RLAYTON, SMATHEWS
Commerce for MAC - ESzymanski, SWilson
Commerce for MAC - NMelcher, JWu
USPTO for Int'l Affairs - LBoland, EWu
LOC/Copyright Office - STepp
Treasury for OASIA - Dohner, Winship
DOJ for CCIPS - MDuBose, SChembtob, TNewby
FTC for Blumenthal
FBI for LBryant
DHS/ICE for IPR Center - THipelius, TRandazzo, DFaulconer
DHS/CBP for IPR Rights Branch - GMcCray, PPizzeck
ITC for LLevine, LSchlitt, KLinton
State Pass White House OTP Ambassador Richard Russell
NSC for JBader, JLoi, JShrier


E.O. 12958: N/A
TAGS: ETRD KIPR PREL KPAO KIND ECON PGOV CH
SUBJECT: Secretary Locke's Participation in IP Forum Advances IPR
Agenda in South China

REF: A) GUANGZHOU 611, B) GUANGZHOU 320, C) BEIJING 1463, D) BEIJING
1014, E) BEIJING 570

(U) This document is sensitive but unclassified. Please protect
accordingly. Not for release outside U.S. government channels. Not
for internet publication.

1. (SBU) Summary and comment: The participation of Commerce
Secretary Gary Locke and Ambassador Jon Huntsman in the Pearl River
Delta (PRD) Forum on Innovation and Intellectual Property (IP) on
October 27 focused local attention on a top-priority concern for the
U.S. government and business in south China. The high-level impact
of the Secretary's message was unprecedented for a region that is
said by many U.S. businesses to produce more than 80% of the world's
counterfeit and IP-infringing goods. The Secretary's frank
discussion of this difficult issue with Guangdong Province's top
leader, Party Secretary Wang Yang (ref A), and speech to Jinan
University students enrolled in the area's first
intellectual-property degree program, helped convince local
officials at all levels of the need to improve cooperation and make
concrete progress on this difficult issue. In addition, a diverse
group of senior and working-level U.S. officials from Washington and
Embassy Beijing also attended the forum and met with U.S. business
representatives and local officials, helping reinforce the strong
IPR message at every level.

2. (SBU) Comment continued: Maintaining the positive momentum
created by the Secretary's high-profile visit will be critical to
prevent local officials and manufacturers from reverting to
"business as usual" and ignoring obvious IPR violations in the name
of economic stability and growth. Planning for the IP Forum,
including acrimonious disputes over press coverage of the
Secretary's IP-related public events, the U.S. Chamber of Commerce's
inability to reach an MOU with the Guangdong Intellectual Property
Office, and determining participation from the central government's
State Intellectual Property Office, starkly demonstrated the
challenges of working with local and provincial authorities on these
issues. Nevertheless, a follow-up meeting between leaders of the
U.S. Patent and Trademark Office (USPTO) and the Guangdong
Intellectual Property Office (IPO) was positive and productive,
largely focusing on messages delivered at Party Secretary Wang
Yang's meeting with Secretary Locke and Ambassador Huntsman. It
will take time to determine the extent of new cooperation and IPR
progress resulting from the visits and the IP Forum. However,
sustained attention and follow-up visits from both senior and
working-level U.S. officials will play a critical role in convincing
south China IPR officials of the need to take difficult steps and
improve local conditions. End summary and comment.

PRD Forum on Innovation and Intellectual Property

GUANGZHOU 00000619 002 OF 004


--------------------------------------------- -

3. (SBU) The Pearl River Delta Forum on Innovation and Intellectual
Property (IP) was an unprecedented showcase of U.S. government and
business commitment to promoting increased IP awareness and
protection in the critical south China market. Secretary Locke
delivered the keynote address to a packed ballroom of 400 conference
participants and media, none of whom had previously witnessed such a
high-level lineup of speakers focused on a problem that is seldom
mentioned in local press or open fora. The day-long conference was
jointly organized by the U.S. Chamber of Commerce and Guangdong
Province Intellectual Property Office, and attended by
representatives from the U.S. Department of Commerce, U.S. Embassy
Beijing, U.S. Consulate Hong Kong, U.S. Patent and Trademark Office,
U.S. Trade Representative's Office, U.S. Department of Justice, the
Department of Homeland Security's Immigration and Customs
Enforcement and the U.S. International Trade Commission. Executives
from key U.S. companies affected by difficult south China IPR
conditions also participated in the forum and a series of other
events with the Secretary and Ambassador (septel).

4. (SBU) Guangdong government participation in the forum was
distributed across a range of IP-related bureaus and agencies. It
was apparent that local officials had not anticipated such strong
interest from not only the U.S. community but also from 13 other
Guangzhou-based Consuls Generals and a mix of international business
and media representatives from throughout Asia and Europe. The
message from each speaker was similar: IPR problems in Guangdong are
no longer local, making half-hearted, stop-gap enforcement measures
unsustainable. Working together, however, can yield progress that
will help all parties and advance local economic development in ways
that cannot be achieved without stronger IP protection. Local media
coverage of the forum did not shy away from the often-taboo IPR
topic. Using quotes and footage from Secretary Locke's remarks on
IPR, many reports highlighted how strong IPR protection would
bolster long-standing provincial economic policies that aim to
upgrade from low-cost manufacturing to more high-tech development.

Party Secretary Creates Political Space for IPR Cooperation
--------------------------------------------- --

5. (SBU) In a separate meeting with Secretary Locke and Ambassador
Huntsman, Guangdong Party Secretary Wang Yang, the province's
highest-ranking official and a member of China's Politburo,
acknowledged the challenge of improving IPR conditions in his
province (ref A). The positive effect of his comments were
immediately obvious as media coverage was more open than at past
IP-related events. A meeting between Guangdong IPO Director General
Tao Kaiyuan and USPTO Deputy Director Sharon Barner, the day after
the conference, also appeared to benefit from the willingness of the

GUANGZHOU 00000619 003 OF 004


Party Secretary to clearly engage U.S. visitors on the IP issue.
Tao reiterated many of Party Secretary Wang's comments and
emphasized the positive outlook for increased IPR cooperation
between Guangdong and the United States. This is a welcome contrast
to the Guangdong IPO's effort, three days before the event, to
restrict media coverage of the forum to a limited number of
government-controlled outlets.

We're Here to Help
------------------

6. (SBU) When more than a dozen U.S. government visitors came to
Guangzhou at the same time, attended the Forum, met with IP rights
holders and toured a major U.S. toy manufacturer -- local government
and business leaders took note. The opportunity to see local
conditions first-hand, share high-level USG perspectives from
Beijing and Washington, and to personally hear about south China IPR
concerns directly from rights holders were valuable benefits for
participants on all sides. For their part, rights holders
emphasized the need for increased education and public-awareness to
change local acceptance of IP infringement to a culture of respect
for IP and its protection. They also voiced continued concerns
about weak local enforcement and non-deterrent penalties for south
China-based infringers.

Jinan University School of Intellectual Property
--------------------------------------------- -

7. (SBU) Even as rights holders at the IP Forum were calling for
improved IPR education and awareness in south China, Secretary Locke
was meeting with students and speaking on the topic at Jinan
University, home of south China's first College of Intellectual
Property. The Secretary's activities attracted broad attention to
IPR concerns from students and the public alike, resulting in
positive local media coverage and energizing students who are
well-positioned to amplify the message of IPR protection.

South China IP Challenges Remain
--------------------------------

8. (SBU) The visits of Secretary Locke, Ambassador Huntsman and a
cross-cutting group of U.S. IPR officials did much to advance the IP
agenda in south China, but much work still remains. Guangdong IPO
continues to tout their success at registering more patents and
trademarks than any other Chinese province rather than focusing on
the quality of patents and the creation of an environment that
fosters innovation in ways that meet commercial and public demand.
Proliferation of local technical standards also threatens to
balkanize high-tech industries and undercut recognized international
standards as China attempts to flood technology markets with

GUANGZHOU 00000619 004 OF 004


proprietary equipment and obtain a larger share of global licensing
income. Rights holders report that enforcement remains spotty, with
rampant local protectionism and non-deterrent penalties for
infringers.

9. (SBU) Consulate Guangzhou will continue engaging with provincial
and local officials responsible for IPR issues and assisting rights
holders who face infringement problems in south China. The
Consulate encourages more visitors from Beijing and Washington to
help increase local awareness of U.S. policies and capacity building
efforts. Continued funding for all forms of training, both in south
China and elsewhere in Asia and the United States, will continue as
important tools for combating the export of 80% of the world's
infringing goods.

GOLDBECK

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