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Cablegate: Recent Ipr Enforcement Successes in Mexico

VZCZCXRO6469
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #3322/01 3272341
ZNR UUUUU ZZH
P 232341Z NOV 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 9146
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAHLA/DEPT OF HOMELAND SECURITY
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RHMFISS/HQS USNORTHCOM
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHEHAAA/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 02 MEXICO 003322

SENSITIVE, SIPDIS

STATE FOR EB/TPP/MTA/IPE/HUGHES/URBAN
STATE FOR WHA/MEX/GOMEZ
STATE PASS TO USTR FOR MELLE/MCCOY/SHIGETOMI
STATE PASS TO JUSTICE FOR CCIPS/KOUAME AND OPDAT/TRUEBELL
STATE PASS TO COMMERCE FOR ITA/MAC/ONAFTA/WORD
STATE PASS TO ITA/MAC/IPR/WILSON
COMMERCE PASS TO USPTO FOR RODRIGUEZ/BERDUT/MORALES

E.O. 12958: N/A
TAGS: KIPR ECON SNAR MX
SUBJECT: RECENT IPR ENFORCEMENT SUCCESSES IN MEXICO

Summary
-------

1. (SBU) Two recent successes in Mexican IPR enforcement efforts
warrant highlighting in a front-channel cable. Mexican customs
officials who attended a training program organized by the Embassy
in Manzanillo in early September have since employed the detection
techniques learned and have detained 30 containers of counterfeit
goods at Mexico's port of Lazaro Cardenas. Separately, Mexico's
FDA-equivalent agency led an unprecedented raid on a chain of
pharmacies in Cancun, and shut down seven for distributing
counterfeit pharmaceuticals and endangering the general public.
Both these enforcement efforts are deserving of high praise and are
encouraging signs of increased vigilance. However, more needs to be
done to protect IPR in Mexico. We will continue our training and
cooperative efforts so as to ensure additional successes. END
SUMMARY.

Training Nets Seizures in Lazaro Cardenas
-----------------------------------------

2. (U) The Embassy, together with the Department of Justice (DOJ)
and the Mexican Customs Administration (Aduanas), held a four-day
training seminar in Manzanillo from September 8-11 for Mexican
customs and law enforcement officials on criminal enforcement and
detecting, detaining, and deterring the importation of pirated and
counterfeit goods (see reftel). Two of the customs officials in
attendance were from the southern Pacific Coast port of Lazaro
Cardenas. Lazaro Cardenas is slightly smaller than Manzanillo,
Mexico's largest port. In 2008, it handled 20 million tons of cargo,
including more than half a million twenty-foot equivalent units
(TEUs), or standard intermodal containers, mostly from China and
elsewhere in Asia.

3. (SBU) The two officials took the fresh insights and valuable
techniques they learned from our training program, and employed them
in their customs duties in Lazaro Cardenas. They had the express
permission of the customs director, who himself participated in a
separate DOJ-sponsored training program in July, which afforded him
a tour of the Port of Baltimore and the IPR Coordination Center in
Washington, D.C., to sensitize him to the importance of intellectual
property protection and enforcement as well as expose him to the
potential in Mexico for increased efforts to combat intellectual
property violations.

4. (SBU) The actions of these Lazaro Cardenas customs officials
resulted in the detection and seizure of 20 TEUs - almost 300 tons -
of counterfeit apparel and accessories bearing the marks of Prada,
Chanel, Dolce & Gabbana, Nike, Abercrombie, American Eagle, Peanuts,
Hello Kitty, Dior, Armani, Hollister, Ed Hardy, and many others -
all in less than one month. According to Jaime Martinez, Aduanas
Administrator of Operations, ten additional containers of
counterfeit goods were detected in the same manner and seized late
last week. All 30 TEUs originated in China.

5. (SBU) A grateful Martinez (another recipient of USG training)
told EconOff he credits the USG-sponsored training for enabling his
officers to make these historic seizures. He commented that these
seizures have been so significant that the shipping company told
Aduanas that those ships that had already left China bound for
Lazaro Cardenas with similar containers are now making stops either
to offload these containers or rerouting them to other ships.
Central America, and not Mexico, was the final destination for
almost all of the seized containers.

COFEPRIS Initiates Unprecedented Enforcement Action
--------------------------------------------- ------

6. (SBU) In a separate event, the Mexican Federal Commission for the
Protection of Sanitary Risks, or COFEPRIS (the Mexican
FDA-equivalent), raided several Yza chain pharmacies in Cancun in
early October and closed seven for distributing counterfeit Cialis
and other medicines. The operation was done in coordination with
the Office of the Attorney General of the Republic (PGR) and the
Mexican Institute of Industrial Property (IMPI - counterpart to the
U.S. Patent and Trademark Office). Yza is a well-known pharmacy
chain with over 100 stores in Quintana Roo, Campeche, and Yucatan.

MEXICO 00003322 002 OF 002


As part of their compensation package, PEMEX employees in this
region of Mexico receive coupons to purchase medicines from Yza.

7. (SBU) Cialis manufacturer Eli Lilly provided COFEPRIS with key
information; according to their General Counsel, Eli Lilly began
receiving reports almost a year ago from doctors in Quintana Roo
whose patients were complaining that their prescribed medicine was
not working. After tests of the medicine demonstrated it was indeed
counterfeit, Eli Lilly built an airtight case and presented it to
COFEPRIS. (Note: Under Mexican law, the authorities can pursue an
IP violation only after receiving a complaint from the
right-holder.) Eli Lilly found a receptive audience in Dr. Lucio
Galileo Lastra Martn, the new COFEPRIS Commissioner for Sanitary
Operations and a former PRI Congressman. Dr. Lastra took on the
case, coordinated the Mexican interagency efforts, and launched a
successful, unprecedented raid.

COMMENTS
--------

8. (SBU) This enforcement action reveals a big change within
COFEPRIS; at the anti-counterfeit pharmaceuticals symposium
sponsored by APEC and held in Mexico City last March, COFEPRIS
General Commissioner Miguel Angel Toscano told the audience that
counterfeit drugs were not a problem in Mexico. While the extent of
the problem may be disputed, COFEPRIS now seems to recognize that
counterfeit pharmaceuticals are indeed a public health hazard in
Mexico and is actively working to combat it. Commissioner Toscano
also participated in the same DOJ-sponsored tour of the IPR
Coordination Center mentioned above.

9. (SBU) In both actions, the security of those involved was a
paramount concern. Eli Lilly's General Counsel told EconOff that he
and his colleagues feared repercussions from Mexico's criminal gangs
if these organizations learned that Eli Lilly was behind the
complaint. Therefore, Eli Lilly is very pleased at the effective
manner in which COFEPRIS has obfuscated their participation. As for
the customs operation, it was not too long ago that the customs
director for the Gulf Coast port of Veracruz disappeared, ostensibly
for detaining a shipment of illicit goods bound for one of Mexico's
criminal organizations. Fortunately, Aduanas Administrator Martinez
told EconOff that as Lazaro Cardenas was not the final destination
for many of these TEU's, the cartels do not appear to be involved.
So far, his officers have not been threatened.

10. (SBU) Both these enforcement efforts are commendable, and
signal that Mexican authorities are increasingly capable of and
willing to protect and enforce intellectual property rights.
However, Mexico must do more to enhance its enforcement efforts.
Mexico must devote greater resources to its enforcement agencies, it
must improve its interagency coordination, and it must continue to
build a consistent record of aggressive prosecutions and
deterrent-level penalties imposed by courts. To these ends, we will
continue our training and cooperative efforts. END COMMENT.

PASCUAL

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