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### Viewing cable 07WELLINGTON158, YEAR 2007 SPECIAL 301 REVIEW - NEW ZEALAND

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07WELLINGTON158 | 2007-02-21 05:37 | 2011-04-28 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Wellington

`

    VZCZCXRO2693
    RR RUEHNZ
    DE RUEHWL #0158/01 0520537
    ZNR UUUUU ZZH
    R 210537Z FEB 07
    FM AMEMBASSY WELLINGTON
    TO RUEHC/SECSTATE WASHDC 3902
    INFO RUEHNZ/AMCONSUL AUCKLAND 1187
    RUEHBY/AMEMBASSY CANBERRA 4746
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/USDOC WASHDC 0115

` `

    UNCLAS SECTION 01 OF 03 WELLINGTON 000158

    SIPDIS

    SIPDIS

    SENSITIVE

    STATE FOR EB/IPE - JENNIFER BOGER and EAP/ANP - DAN RICCI
    STATE PLEASE PASS TO USTR FOR JENNIFER CHOE GROVES
    STATE PLEASE PASS TO USPTO
    COMMERCE FOR CASSIE PETERS ITA/MAC/OIPR

    E.O. 12985:  N/A
    TAGS: KIPR ETRD ECON PREL NZ
    SUBJECT:  YEAR 2007 SPECIAL 301 REVIEW - NEW ZEALAND

    REF:  A. STATE 07944
          ¶B. WELLINGTON 138

    ¶1. (SBU) Summary: Post recommends that New Zealand (GNZ) not/not be
    placed on the Special 301 List in 2007.  The country's overall
    commitment to the protection of intellectual property (IPR) is
    relatively high as compared to most countries cited in the Special
    301 review. The government continues to move ahead in updating its
    intellectual property laws in compliance with international
    standards, with major revisions to the Patents Bill and the
    Copyright Amendments Bill ("New Technologies and Performers' Rights
    Bill") expected to be finalized in 2007. Moreover, New Zealand
    generally provides adequate and effective protection of intellectual
    property rights under current legislation.  Post remains in contact
    with local IP industry representatives and the Ministry of Economic
    Development to help ensure that the pending legislation reflect
    industry's concerns and are passed as scheduled.  Placing New
    Zealand on the Special 301 list at this stage could backfire, as the
    GNZ will see it as punishment even though NZ is doing the right
    thing.  End summary.

    IPR Overview
    -------------

    ¶2. (U) Post remains engaged in an ongoing dialogue with both IP
    industry representatives and government agencies to help improve IPR
    laws and strengthen GNZ's commitment to enforcement. The proposed
    amendments to the Copyright Act 1994 now before a Parliamentary
    Committee are intended to ensure that the act reflects current
    developments in digital technologies and international developments
    in copyright law. Post has made the GNZ aware
    of industry's concern that portions of the new law dealing with the
    treatment of Technological Protection Measures (TPM); exception for
    incidental copying; ISP liability limitation; library digital
    dissemination; time shifting; and computer program exceptions will
    need to better address international minimum standards. Regarding
    patent protection, the GNZ released a draft Patents Bill in 2005
    which is expected to be given its first reading in the early part of
    ¶2007. While this revision to the patent regime is expected to bring
    NZ's level of protection up to international standards, Post has
    seconded industry's recommendation that the current bill should
    include provision for patent term restoration that are in keeping
    with international best practices. These developments, though
    notwithstanding the need for technical adjustments, are a positive
    indication that the GNZ is committed to moving forward on enhancing
    the level of intellectual property protection. The following
    comments are keyed to topics in ref. A.

    PhRMA's PWL recommendation
    --------------------------

    ¶3. (SBU) While the pharmaceutical industry urges that New Zealand be
    placed on the priority watch list (PWL), post continues to believe
    that the industry's restricted access to New Zealand's market stems
    primarily from the cost containment strategies for subsidized drugs.
     The government affiliated Pharmaceutical Management Agency
    (PHARMAC) is mandated to spend less than its budget allows, and the
    pharmaceutical industry has a number of legitimate complaints about
    its treatment in the purchasing process. However, these industry
    concerns are not IPR problems. While Post will continue to work to
    improve access for US pharmaceuticals in New Zealand, we believe
    this should be dealt with as a market-access barrier and not as a
    failure to protect intellectual property. Even the pharmaceutical
    industry trade association here, Researched Medicines Industry
    Association of New Zealand (RMI - affiliated with PhRMA), assesses
    that the government's practices do not violate its TRIPS
    commitments.

    ¶4. (SBU) The national medicines policy is currently under review by
    the Ministry of Health, and a parliamentary notice and comment
    period will take place through the first quarter of 2007. If
    successful, changes to the national medicines purchasing strategy
    would be implemented in early 2008. This process would fulfill a
    promise to the Labor government's coalition partner, the United
    Future Party, to improve NZ public access to medicines; to extend
    the use of quality medicines; and to use medicines more rationally.
    There is currently a well publicized public debate, for example,
    about access to Herceptin for the treatment of breast cancer. This
    debate continues to bring pressure on PHARMAC to review/improve its
    funding policies in order to allow wider access to innovative
    medicines. This pressure is not likely to subside over the coming
    year as a number of patients have already filed law suites

    WELLINGTON 00000158  002 OF 003

    challenging PHARMAC's policies. Meanwhile, the press continues to
    give the matter extensive coverage.

    ¶5.  (SBU) While the level of IP protection for pharmaceuticals is
    adequate, Post agrees that it is in New Zealand's and our best
    interests to complete work on the draft Patents Bill this year in
    order to ensure that New Zealand's patent regime reflects enhanced
    standards in international patent protection. We believe the better
    course of action is to continue to work/consult with the GNZ to
    ensure industry's concerns are reflected in pending legislation.
    Designation of PWL at this time with the threat of possible trade
    sanctions may not yield the changes the pharmaceutical industry
    seeks but may embolden the government to claim its current policies
    are protecting the population against an avaricious pharmaceutical
    industry. It is equally difficult to make the case for an IP
    violation when PhRMA has not been able to estimate the amount of
    damages for 2006 attributable to a lack of IPR or restricted market
    access.

    IIPA's Special Mention of New Zealand's IP Regime
    --------------------------------------------- ----

    ¶6. (U) As IIPA noted in its submission, New Zealand's government in
    December 2006 unveiled the long-anticipated Copyright (New
    Technologies and Performer's Rights) Amendment Bill. This extensive
    amendment to New Zealand's copyright law contains many valuable
    improvements but some provisions remain problematic for industry.
    Post agrees with IIPA's recommendation that a more effective course
    of action would be to continue to engage the government in order to
    ensure that the draft legislation provides more useful tools for
    dealing with piracy. Post has already presented the list of noted
    shortfalls in the draft legislation to the Ministry of Economic
    Development, the agency primarily responsible for drafting
    legislation and monitoring IP enforcement. Post has engaged Bronwyn
    Turley, Senior Policy Advisor to the GNZ for intellectual property
    issues to begin a dialogue to address the needed technical
    corrections.

    Prior Years' Special 301 Issues
    -------------------------------

    ¶7. (U) Ref B is the formal response by the government of New Zealand
    to issues raised in prior years' Special 301 submissions by
    industry. As noted previously, New Zealand law continues to allow
    parallel importation in certain defined circumstances. In 2003, a
    partial ban on parallel importation of films (including VHS, VCD and
    DVDs) was introduced. The Copyright (Parallel Importation of Films
    and Onus of Proof) Amendment Act amended provisions of the Copyright
    Act relating to infringement by importation. The ban bars parallel
    import of any film within nine months of it first being made
    available to the public, whether in New Zealand or elsewhere. The
    only exceptions are parallel imports of films for the importer's
    private and domestic use.  The partial ban contains a five year
    sunset clause and will be reviewed again in 2008.

    ¶8. (U) In conversations with local film industry representatives
    W.J. Hood of Film and Video Labeling Body (FVLB) and Tony Eaton of
    New Zealand Federation Against Copyright Theft (NZFACT - affiliated
    with MPAA), Post Econoff learned that industry and government
    Ministers whose portfolios deal with copyright issues are discussing
    ways to further strengthen New Zealand's IPR enforcement. Both
    Judith Tizard, Assoc. Minister of Commerce and Trevor Mallard,
    Minister of Economic Development are positively inclined to extent
    the partial ban beyond 2008. According to industry, an increasing
    number of GNZ Ministers are now aware of the positive benefits of a
    strong IP regime for both New Zealand's economic development and
    increased tax revenues, especially as New Zealand's domestic film
    industry plays a more pronounced role on the international stage.

    ¶9. (U) Post is unaware of any new legislation related specifically
    to domestic protection of traditional knowledge or expressions of
    folklore.  However, the proposed changes to the Patents Act 1953
    include a provision to set up a Maori consultative committee that
    would advise the patents commissioner on whether a patent
    application pertains to an invention that is derived from Maori
    traditional knowledge, indigenous plants or animals, and whether the
    commercial exploitation of such an invention would be contrary to
    Maori values. New Zealand continues to express a right to avail
    itself of the various exclusions and exceptions contained in the
    TRIPS Agreement.

    Enforcement
    -----------

    WELLINGTON 00000158  003 OF 003

    ¶10. (U) The New Zealand government says it is committed to enforcing
    its IPR-related laws adequately and effectively, and created new
    criminal offenses for trademark infringements and increased
    penalties for copyright infringements under the Trade Marks Act
    2002, which entered into force in August 2003.  In most instances,
    the government responds to complaints raised by rights holders
    rather than initiating action against IP infringers.  Those
    complaints have been relatively few, and so the government does not
    track enforcement-related statistics, such as civil and criminal
    penalties.  The government lacks a central body to coordinate the
    sharing of information on illegal IP activities and enforcement
    efforts. There is an effort underway to set-up a new office within
    New Zealand Customs by mid 2007 that will be exclusively dedicated
    to IP enforcement issues.  We are not aware of any industry
    complaints related to Trade Mark enforcement in New Zealand.

    ¶11. (U) Currently, New Zealand Customs can confiscate and destroy
    pirated products if the holder of the trademark or copyright has
    requested that Customs detain the goods.  That request is valid for
    five years and can be renewed.  Customs does not have the power to
    prosecute, but rights holders can pursue relief through civil
    lawsuits and have 10 working days to do so after the goods are
    detained.  Otherwise, the goods are released or, at the importer's
    request, destroyed.  The provisions apply only to trademarks and
    copyright registered in New Zealand.  Customs has no authority to
    detain infringing IP goods from being exported. Almost all the
    infringing goods imported into New Zealand originated in Asia,
    particularly China, and most of the intercepted and investigated
    goods were clothing, footwear and headwear.  The number of pirated
    CDs and DVDs intercepted by Customs has declined sharply, after
    peaking in early 2005. While it appears that CDs and DVDs are
    increasingly being copied to order within New Zealand, making
    detection of local production increasingly difficult, industry has
    an ongoing cooperative dialogue with local authorities to better
    police IPR as new forms of piracy are detected. The New Zealand
    Department of Internal Affairs has had some success, however, in
    stemming domestic sales of pirated and counterfeit products by
    closing down e-auction sites.

    Conclusion
    ----------
    ¶12. (U) Post maintains that, despite certain technical deficiencies
    in the pending revisions to the intellectual property laws now
    before Parliament, there remains a strong commitment on the part of
    the GNZ to continue to improve its IPR regime and bring it into
    conformance with international standards. GNZ's enforcement of
    current IP laws also reflects the government's proactive stance as
    they learn and adapt to help stem new forms of piracy. While there
    is additional work to be done to strengthen the law and enhance
    enforcement, Post recommends the better course of action is to
    engage the GNZ and monitor the progress of IP legislation rather
    than place New Zealand on this year's watch list.

    McComick

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