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### Viewing cable 08BRASILIA130, BRAZIL: USTR OCR MEETING WITH GOB OFFICIALS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08BRASILIA130 | 2008-01-25 18:39 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Brasilia

`

    VZCZCXRO1544
    PP RUEHRG
    DE RUEHBR #0130/01 0251839
    ZNR UUUUU ZZH
    P 251839Z JAN 08
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC PRIORITY 0921
    INFO RUEHSO/AMCONSUL SAO PAULO 1512
    RUEHRI/AMCONSUL RIO DE JANEIRO 5725
    RUEHRG/AMCONSUL RECIFE 7637
    RUCPDOC/USDOC WASHDC

` `

    UNCLAS SECTION 01 OF 06 BRASILIA 000130

    SIPDIS

    SENSITIVE
    SIPDIS

    DEPT FOR EB/TPP/IPE JENNIFER BOGER
    DEPT PASS USPTO
    DEPT PASS USTR FOR KATHERINE DUCKWORTH AND JENNIFER CHOE GROVES
    USDOC FOR ITA/MAC/OIPR CASSIE PETERS
    USDOC FOR ITA/MAC/WH/OLAC/MCAMPOS

    E.O. 12958:  N/A
    TAGS: KIPR ETRD ECON BR
    SUBJECT: BRAZIL: USTR OCR MEETING WITH GOB OFFICIALS

    REF: A) State 107819; B) Brasilia 1620; C) Brasilia 680; D) Brasilia
    2813 E) Brasilia 2038 F) Page e-mail 1/17/08

    ¶1. (SBU) Summary and Introduction:  On January 15, Deputy Assistant
    United States Trade Representative (DAUSTR) Chris Wilson and
    delegation met privately with Hadil Vianna, Director for Scientific
    and Technical Affairs (DCT) at the Ministry of External Relations
    (MRE) and later with members of the GoB's Inter-Ministerial Group on
    Intellectual Property (GIPI), which Vianna chairs, to discuss USTR's
    ongoing Special 301 Out-Of-Cycle Review (OCR) of Brazil's IPR
    practices.  Vianna emphasized overall "excellent" USG-GOB relations
    and said he hoped the IP dialogue would be equally positive.  He
    noted increased Brazilian public awareness of IPR issues, but said
    many in the GoB do not feel the USG has sufficiently recognized
    Brazilian IPR efforts.  He added that the GoB does not recognize its
    inclusion on any intellectual property (IP) violators list (such as
    the Special 301 or the EU's similar listing).

    ¶2. (SBU) The meeting was well-attended by representatives of the
    Inter-Ministerial group (GIPI) and a variety of copyright and patent
    issues were addressed. Otavio Brandelli, Chief of the Division of
    Intellectual Property at the MRE, noted a new emphasis by the
    National Council to Combat Piracy (CNCP) on targeting demand for
    pirated goods and said CNCP members had not raised internet piracy
    as an issue.  Vianna added that, despite low internet penetration
    rates, the GoB takes internet piracy seriously, having raised it at
    the last Internet Governance Forum (IGF) meeting.  Brandelli also
    described a new CNCP legislative proposal that would, among other
    initiatives, streamline the destruction process of seized
    contraband.  Deputy CNCP Executive Secretary Ana Lucia Soares
    reported a decrease in demand for pirated goods in the country's
    lower-income northeastern region.  Representatives for the Receita
    Federal (Brazilian IRS/Customs), the Rodoviaria Federal (Brazilian
    Federal Highway Patrol), the Brazilian Federal Police and the
    Ministry of Agriculture reported ongoing modernization and training
    efforts as well as enforcement activities.  All except Rodoviaria
    reported an increase in contraband seizures.  An official from the
    National Health Vigilance Agency (ANVISA - the Brazilian FDA
    equivalent) described Brazil's ongoing battle against counterfeit
    medicine and outlined future ANVISA efforts in this area.

    ¶3. (SBU) Regarding U.S. concerns about textbook copying, Marcos
    Alves de Souza, General Coordinator for Copyrights at the Ministry
    of Culture, said the GoB is exploring use of a collective management
    system (including internet sales) or taxes on media and reproductive
    machines to ensure remuneration of rights holders.  A National
    Institute of Industrial Property (INPI) spokesperson said INPI had
    increased human resources to address its patent backlog and was
    implementing the e-MARCAS registration system.  Brandelli called the
    compulsory licensing of the Merck anti-retroviral drug Stocrin an
    "unusual event" in Brazilian history that took place after all
    negotiations had failed, and insisted that the action was TRIPS
    compliant.  An ANVISA representative defended his agency's handling
    of data package protection.  End Summary and Introduction.

    ¶4. (SBU) On January 15, Deputy Assistant United States Trade
    Representative (DAUSTR) Chris Wilson and delegation met privately
    with Hadil Vianna, Director for Scientific and Technical Affairs
    (DCT) at the Ministry of External Relations (MRE) prior to meeting
    with members of the GoB's Inter-Ministerial Group on Intellectual
    Property (GIPI), which Vianna chairs, to discuss USTR's ongoing
    Out-Of-Cycle Review (OCR). GIPI includes representatives from the
    Ministries of Science and Technology; Justice; Health; Culture;
    Environment; Agriculture; External Relations; Development, Industry
    and Trade; and a representative of the President's office, Casa
    Civil, as well as INPI and ANVISA.  All GIPI members were
    represented at the meeting except for the Ministry of the
    Environment and Casa Civil.  (Comment:  The large turnout for the
    meeting appeared to signal a keen GoB interest in dialogue with USTR
    about GoB IPR enforcement efforts. End Comment.)

    -------------------------
    Meeting with Hadil Vianna
    -------------------------

    ¶5.  (SBU) Vianna told Wilson he believed that overall relations
    between the USG and GoB are excellent and that he hoped the IP
    dialogue would be equally positive.  He observed that many in the
    GoB do not feel the USG has sufficiently recognized its anti-piracy
    efforts.  Vianna added that the GoB does not recognize its inclusion
    on any IPR violators' list (such as the Special 301 or the EU
    "Blacklist"), but understands that it is a USG prerogative to
    maintain such a list.  He cautioned that the GoB avoids public
    discussion on the Special 301 process to prevent creation of a

    BRASILIA 00000130  002 OF 006

    detrimental public atmosphere towards IPR.

    ¶6.  (SBU) Vianna said a large investment of both time and resources
    in the Brazilian IPR effort had led to an unprecedented increase in
    public IPR awareness in Brazil, including increased media coverage.
    In addition, Vianna pointed out that IP issues have appeared in
    Brazilian soap operas, with the villain portrayed as an IPR
    violator.  During the meeting, he also solicited USG support for the
    Brazilian candidate for the World Intellectual Property Organization
    (WIPO) presidency.

    ¶7.  (SBU) Wilson emphasized to Vianna that the purpose of his visit
    was to learn more about the GoB intellectual property regime and
    stated that the GoB was "not on trial" during the OCR process.  He
    referenced the GoB position on IPR in international fora as often at
    odds with the USG position and signaled USG interest in discussing
    these issues with the GoB in advance of international meetings in
    order to enhance communication.  In reference to Vianna's call for
    USG support for the Brazilian WIPO candidate, Wilson relayed that
    the USG was preparing to consider candidates for the position.

    ---------------------
    OCR Meeting with GIPI
    ---------------------

    ¶8.  (SBU) Wilson acknowledged to GIPI agency representatives that he
    realized the Special 301 process as a point of contention, but said
    his objective was to work on IP issues with the GoB in a spirit of
    cooperation.  He applauded the efforts of the GoB's National Council
    to Combat Piracy (CNCP) and cited it as an example of a successful
    public-private partnership that is frequently referenced as an
    example to other countries.

    -- National Council to Combat Piracy (CNCP)

    ¶9. (U) Otavio Brandelli, Director of the Division of Intellectual
    Property at the MRE (a member of CNCP) said CNCP was preparing to
    move beyond its focus on controlling the supply of pirated goods
    into a second phase addressing demand.  To accomplish this, he said,
    CNCP activities will include an intensified GoB anti-piracy consumer
    educational program, efforts to promote reform of the Brazilian tax
    system, and cooperation with industry to make authentic products
    available to consumers at a more reasonable price. CNCP plans to
    evaluate and revise its National Anti-Piracy Plan beginning in
    February 2008.
    ¶10.  (SBU) Deputy CNCP Executive Secretary Ana Lucia Soares said
    that more consumers now understand the link between piracy and
    organized crime as a result of CNCP educational activity (which is
    designed to demonstrate the impact of piracy on the Brazilian
    consumer).  She reported a drop in piracy rates in Brazil's
    lower-income northeastern provinces as a result of stepped-up
    enforcement and consumer education campaigns.  (Note: ConRecife
    notes that enforcement is highly visible in the press and the local
    police have complained to PO about a lack of storage space for
    confiscated media (ref F). End Note.) She also reported that in 2007
    the first municipal-level anti-piracy commission was created in
    Blumenau.

    -- Enforcement Activities

    ¶11.  (SBU) Frederico Vasconcellos, Head of the Division on Combating
    Contraband and Customs Evasion at Receita Federal (Brazilian
    IRS/Customs) said that the GoB was working on improvements in its
    customs control strategies, including expansion of international
    cooperation, increased training for customs officers and additional
    investment in new equipment and facilities.  Receita statistics
    indicated a 2007 increase in seizures of smuggled goods (pirated
    items were not listed separately from other contraband).  Brazilian
    legislation now allows for the seizure of buses and vehicles
    involved in smuggling.  He presented photographic evidence of dozens
    of seized buses and vehicles that were to be donated to Brazilian
    state and local governments.  According to him, smugglers are now
    seeking alternative routes to the Foz De Iguacu crossing from
    Paraguay, mostly through the southeast, and the Brazilian
    authorities have thus far been unable to address this new
    development.

    ¶12.  (SBU) Jetson da Silva, an official from the Rodoviaria Federal
    (Brazilian Federal Highway Patrol) said his organization, which
    oversees 61,000 km of federal highway, has conducted CNCP-assisted
    anti-piracy interdiction training programs for its officers and held

    BRASILIA 00000130  003 OF 006

    educational campaigns in schools.  Rodoviaria seizure data indicated
    a drop in 2007, which the official attributed to use by smugglers of
    secondary roads not frequented by his organization.  According to a
    Brazilian Federal Police Official, his agency has formulated both a
    national and international strategic cooperative plan.  He said the
    Federal Police have begun efforts to fight internet piracy,
    including modernization of outdated equipment and training of a
    cyber crime unit, and was interested in exchanging technology and
    information with other countries in this area.

    ¶13.  (SBU) Helinton Rocha, the Ministry of Agriculture's Director of
    the Department of Intellectual Property and Agriculture Technology
    discussed Brazil's biosafety and seed laws and described inspection
    and seizure activities.  In 2007, the Ministry conducted 3,157
    inspections of soybean seed lots and found 373 questionable lots
    which resulted in fines on the culpable parties.  Out of 606 cotton
    and corn inspections, 36 were found to be questionable and resulted
    in penalties assessed on the owners.  Fines of up to R$1.5 million
    were issued, with an average of R$250,000.

    -- Legislation

    ¶14.  (SBU) Brandelli said proposals included in a new CNCP sponsored
    bill would, for example, streamline the destruction process of
    seized contraband. He added that this legislative proposal has been
    undergoing due process for a number of months and, once done, will
    be presented to the Brazilian Congress.  According to Brandelli,
    CNCP is also assisting other states with formulation of anti-piracy
    statutes. (Note:  This legislation will also expand vehicle seizure
    authority and allow law enforcement agencies to retain only samples
    for use in litigation.  It also provides different penalties for
    individual offenders from those involved in larger operations;
    incorporates penalties for software copyright violation into the
    penal code; and stiffens penalties if pirated goods are imported
    (see reftel D).  End Note.)

    -- Counterfeit Medicine

    ¶15.  (SBU) Maristela Figueiredo, Health Regulation and Surveillance
    Specialist at the National Health Vigilance Agency (ANVISA - the
    Brazilian FDA equivalent), said counterfeit medicines remained a
    problem in the country, although to a much lesser extent than in the
    past.  In 1997-98, there were a reported 172 cases of counterfeit
    medicines; while in 2006-07, there were only 17.  Figueiredo noted
    the sudden increase in counterfeit drugs from 1997-98 led to the
    passage of a 1998 law providing for stiffer penalties for drug
    counterfeiters (10-15 years without parole or amnesty plus a fine)
    and served as the impetus for the creation of ANVISA in 1999.  GoB
    regulations now call for usage of secure drug packaging and a
    distributors' registry.  ANVISA serves as the clearinghouse for
    information on counterfeit drugs provided by a nationwide
    notification network of 160 sentinel hospitals (known as Notivisa),
    and state health vigilance units (VISAs).

    ¶16.  (SBU) According to Figueiredo, future plans to combat
    counterfeit medicine include closer coordination with Mercosul
    partners, strengthening legislation, and implementing a more
    thorough drug registry database that would facilitate tracking
    counterfeit drugs to the end user.  She also cited the need for more
    training of Federal judges, who often do not take counterfeit drug
    cases as seriously as illegal drug cases, although both have similar
    penalties.  Figueiredo stated that 130 Federal, State, and Municipal
    level inspectors had been trained.  (Note: Figueiredo later told
    EconOff that ANVISA has an internal division that trains state and
    municipal agents to conduct inspections for counterfeit medicines.
    ANVISA, in conjunction with Receita, has participated in seminars on
    counterfeit medicines conducted by the private industry group
    National Forum to Combat Piracy (FNCP) and Public Ministries in
    states throughout Brazil.  ANVISA, which has previously concentrated
    on training enforcement officials, has recently made plans to
    address training of Federal judges.  End Note.)

    -- Internet Piracy

    ¶17.  (SBU) Soares (CNCP) said that, although CNCP did not view
    internet crime in Brazil as a top priority due to low internet
    penetration rates in the country, CNCP has created a cyber-crime
    division.  Brandelli (MRE) stated that CNCP will address internet
    piracy once its members raise the issue, which they have not done
    thus far.  Vianna added that Brazil's low number of computers does
    not mean that the country is not concerned with internet crime.  He

    BRASILIA 00000130  004 OF 006

    noted that the GoB raised the issue at the Internet Governance Forum
    (IGF) Meeting in Rio de Janeiro in November 2007.  Wilson noted the
    importance of considering the emerging threat of Internet piracy and
    the need to "get ahead of the curve" with regard to this problem.

    -- Campus Copy-Shops

    ¶18.  (SBU) Marcos Alves de Souza, General Coordinator for Copyrights
    at the Ministry of Culture, told Wilson that actual book piracy was
    rare in Brazil, but non-authorized copying of copyrighted works was
    common on university and college campuses.  He said this activity
    was not organized-crime related.  GoB believes that individuals have
    a right to access information and knowledge in the country, which is
    often difficult due to the high cost of books as a result of low
    production runs, according to Souza.  He noted that academic books
    are very expensive, despite the fact that there are no federal taxes
    imposed on these items.  Souza asserted that legal action by book
    publishers against professors and schools over illegal copying in
    2006 -2007 led to a public backlash against IP laws.

    ¶19.  (SBU) Brazilian copyright law allows for small segments of
    copyrighted works to be reproduced, but does not define what
    constitutes a small segment (reftel D).  Souza said individual
    universities use in-house rules to police the amount of a
    publication that can be copied (ranging from 10 - 40 percent) or
    limit copies to numbers of chapters.  He relayed that the Ministry
    of Culture plans to hold a forum this year to allow input from a
    broad segment of society on the issue as it considers copyright law
    reforms.  He felt authors were due remuneration for their work and
    said some ideas being considered were a collective management system
    or a tax on blank media and reproductive machines that could be used
    to recompense authors.  The Ministry is also considering a system to
    allow small segments of books to be sold over the internet.

    -- Patents and Trademarks

    ¶20. (SBU) Wilson noted that, while the USG has recognized Brazilian
    progress in the area of IPR enforcement, the U.S. remains concerned
    that progress has been less noticeable in areas related to patents,
    trademarks, and protection of pharmaceutical and agrichemical test
    data.  Wilson acknowledged that INPI has taken steps to address a
    considerable backlog in patent and trademark applications, and
    requested information on progress achieved to date.  He mentioned
    specifically the USG's ongoing questions about the unusual role of
    the Brazilian health regulator (ANVISA) in the process of
    considering pharmaceutical patents.  With regard to compulsory
    licensing of pharmaceuticals, Wilson noted that the USG has sought
    to approach this delicate issue in a measured way, but continues to
    stress the importance of full and transparent engagement between the
    GoB and patent holders.  Wilson also mentioned that the USG has
    questions and concerns with regard to Brazil's system of protecting
    data submitted in connection with the regulatory approval of
    pharmaceutical and agricultural chemical products.

    ¶21.  (SBU) Gustavo Travassos Pereira, International Cooperation
    Advisor at the National Institute of Industrial Property (INPI) said
    his organization had formed a "dynamic partnership" with the U.S.
    Patent and Trademark Office (USPTO), which is providing training for
    INPI employees.  According to him, INPI has doubled its trademark
    processing staff over the last year and tripled its patent
    processing staff.  He also noted that INPI was in the final stage of
    implementation of the e-MARCAS system, which would allow for quicker
    trademark registration.  The ANVISA official stated that ANVISA
    reviews (required for patent applications on certain products,
    including medicines) take no more than 120 days with only a 3
    percent rejection rate per 2005 statistics.

    -- Compulsory Licensing

    ¶22.  (SBU)  Leandro Teixeira, Health Regulation and Surveillance
    Specialist at ANVISA, said that after GoB ratification of TRIPS, the
    increased price of medicine impeded access to drugs for many
    Brazilians.  He said that the GoB feels TRIPS "can and should" be
    interpreted so as not to harm public health projects and provide
    access to medicines for all.  Brandelli called the compulsory
    licensing of the Merck anti-retroviral Stocrin an "unusual event" in
    Brazilian history and noted that the GoB has been obliged to provide
    HIV/AIDS victims free access to medications since 1986, and has
    76,000 such patients (while Thailand has 17,000).  He said that
    Brazil is one of the largest customers for these drugs, yet paid
    four times more for the drug than Thailand.

    BRASILIA 00000130  005 OF 006

    ¶23.  (SBU) Without identifying Merck by name, Brandelli said
    negotiations between the GoB and the company had been transparent
    and failed to reach an agreement after six to seven months.  At that
    point, after the company decided not to negotiate further, the GoB
    issued the compulsory license.  He added that the drug's patent was
    one of over 400 that are considered pipeline patents, and, thus, it
    was already in the public domain when the patent was issued.
    Brandelli added that if the GoB had adhered to the letter of the
    TRIPS agreement, no patent would have been issued.  He said the
    company (Merck) has been in Brazil for many years and the compulsory
    license has not affected the company's relationship with the GoB.

    -- Data Package Protection

    ¶24.  (SBU) In response to Wilson's question about industry
    allegations of lax data package protection, Teixeira  (ANVISA)
    replied that this data had not been used to violate any patent
    rights.  He added that TRIPS was ambiguous on this point and he felt
    the GoB was acting within the TRIPS agreement in its handling of
    data packages.

    ------------------
    Delegation Members
    ------------------

    ¶24.  (SBU) Members of the delegations were:

    U.S.
    ----

    Chris Wilson, DAUSTR for Intellectual Property and Innovation

    Katherine Duckworth, USTR Director for the Southern Cone

    Dorian Mazurkevich, USPTO Attache, Consulate Sao Paulo

    Tim Hall, Economic Officer, Embassy Brasilia (notetaker)

    Brazil
    ------

    - Ministry of External Relations (MRE):

    Hadil da Rocha Vianna, Director of Department of Scientific and
    Technical Issues (DCT)

    Otavio Brandelli, Director of Intellectual Property Division (DIPI)

    Joao Carlos Beato Storti, Deputy Director, Intellectual Property
    Division (DIPI)

    Fabio Alves Schmidt da Silva, Intellectual Property Division (DIPI)

    - Ministry of Development, Industry and Trade:

    Sancia Regina Magalhaes Ferrari, Trade Analyst and Acting
    Coordinator-General of the Inter-Ministerial Group on Intellectual
    Property (GIPI)

    Carlos Alberto Alves de Oliveira, Trade Analyst

    Jos Carlos Cavalcanti de Araujo Filho, Trade Analyst

    - National Institute of Industrial Property (INPI)

    Gustavo Travassos Pereira, International Cooperation Advisor

    - Ministry of Culture:

    Marcos Alves de Souza, General Coordinator for Copyrights (CGDA)

    Samuel Barichello Conceicao, Assistant to General Coordinator for
    Copyrights (CGDA)

    - Ministry of Agriculture:

    Helinton Jose Rocha, Director of Department for Intellectual
    Technology and Agricultural Technology (MAPA)

    Leontino Rezede Taveira, Department for Intellectual Technology and

    BRASILIA 00000130  006 OF 006

    Agricultural Technology (MAPA)

    Marcos Vinicius Leandro, Jr., Coordinator, Department for
    Intellectual Technology and Agricultural Technology (MAPA)

    Luis Eduardo Rangel, Coordinator, Department for Intellectual
    Technology and Agricultural Technology (MAPA)

    - Ministry of Health:

    Joao Carlos Azuma, Managing Director of Department of Regulatory
    Affairs

    Ana Maria Tapajos, Head of Technical Analysis Division,
    International Affairs Office

    Daniela Lucia Loiola, Advisor

    - Ministry of Justice:

    Ana Lucia Moraes Gomes, Acting Executive Secretary of the National
    Council to Combat Piracy (CNCP)

    - Ministry of Culture:

    Marcos Alves de Souza, General Coordinator for Copyrights

    Samuel Braichello Conceicao, Assistant General Coordinator for
    Copyrights

    - Receita Federal (Brazilian IRS/Customs):

    Frederico Emmanuel Vasconcellos, Head of the Division on Combating
    Contraband and Customs Evasion

    Jorge Luiz Alves Caetano, Coordinator of Research and Investigation

    - Federal Police:

    William Marcel Murad, Head of the Division on Combating Revenue
    Crime

    - Rodoviaria Federal (Brazilian Federal Highway Patrol):

    Jose Altair Gomes Benites, Officer

    Wellker Cesar Faria, Officer

    Jetson Jose da Silva, Officer

    - National Health Vigilance Agency (ANVISA):

    Erika Mattos da Veiga, Specialist on Health Regulation and
    Surveillance

    Leandro Teixeira de Morais, Specialist on Health Regulation and
    Surveillance

    Maristela Figueiredo de Almeida, Specialist on Health Regulation and
    Surveillance

    ¶25.  (U) THE DELEGATION HAS CLEARED THIS MESSAGE.

    Sobel

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