Cablegate: Special 301 La Paz Input

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UNCLAS LA PAZ 000368

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD KIPR BL
SUBJECT: Special 301 La Paz Input

REF: 10 STATE 3361

1. (SBU) Summary: Post recommends that Bolivia remain on the
Special 301 Watch List in 2010. Bolivia's new constitution, passed
by referendum on January 25, 2009, includes references to
protection of intellectual property rights (IPR), but only for
indigenous groups by name. Bolivia protects copyrights and
registers patents and trademarks through existing laws. However,
concerns about trade secret protection, piracy, and counterfeiting
continue to be serious problems. The Morales administration has
installed new leadership at the Servicio Nacional de Propiedad
Intelectual (SENAPI), the Bolivian intellectual property body, and
these authorities appear more engaged. However, with limited
resources and a history of lax enforcement, it remains to be seen
whether significant progress can be made. End summary.

New Constitution Limits IPR Protection

2. (U) Bolivia belongs to the World Intellectual Property
Organization and is a signatory to the Nice Agreement and the
Paris, Bern, and Geneva Conventions. As a member of the Andean
Community (CAN) it has pledged to abide by the intellectual
property decisions of the CAN. National law specifically supports
IPR for genetic material, and indigenous groups and their
patrimony, however, it limits protection for medicines.

3. (U) The constitution provides for protection of all domestic
genetic and micro-organic resources, as well as the knowledge
associated with their use and exploitation. This protection will
be achieved in part through registry in a system yet to be created.
For all the resources not registered, Article 381 of the
constitution says the State will establish procedures for their
protection with a law that has yet to be written.

4. (U) Article 100 of the new constitution states the State will
also protect the learning and knowledge of indigenous people by
means of intellectual property registration. The constitution
acknowledges the right of indigenous nations and people to the
collective intellectual property of their intelligence, sciences,
and knowledge, as well as their valuation, use, promotion and
development (Article 30). Article 304 further specifies that
indigenous people can safeguard, through registration, collective
intellectual property related to knowledge of genetic resources,
traditional medicine, and germ plasma.

5. (U) The constitution specifically limits IPR related to
medicines in Article 41 which specifies that the right of access to
medicines cannot be restricted by intellectual property or trade
rights.

Significant Copyright Protection Exists on Paper

6. (U) Bolivia's copyright law (Law 1322, 1992) predates the
international standards established under the WTO Agreement on
Trade-Related Aspects of Intellectual Property (TRIPS) and falls
short of obligations under the World Intellectual Property
Organization (WIPO) Copyright Treaty and the WIPO Performances and
Phonograms Treaty.

7. (U) However, the existing copyright law does protect literary,
artistic, and scientific works for the lifetime of the author plus
50 years. Bolivian copyright protection includes the exclusive
right to copy or reproduce works; to revise, adapt, or prepare
derivative works; to distribute copies of works; and to publicly
communicate works. Although the exclusive right to translate works
is not explicitly granted, the law does prevent unauthorized
adaptation, transformation, modification, and editing. The law
also provides protection for software and databases.

8. (U) The copyright law protects the rights of Bolivian authors,
foreign authors domiciled in Bolivia, and foreign authors published

for the first time in Bolivia. Foreigners not domiciled in Bolivia
enjoy protection to the extent provided in international
conventions and treaties to which Bolivia is a party.

9. (U) The film and video law (Law 1302, 1991) contains elements
of IPR protection, establishing a National Movie Council (CONACINE)
to oversee the domestic film industry and requiring that all films
and videos shown or distributed in Bolivia be registered with the
organization.

However, IPR Violations are Widespread and Enforcement is
Practically Nonexistent

10. (U) Video, music, and software piracy rates are among the
highest in Latin America, with the International Intellectual
Property Alliance estimating that piracy levels have reached 100%
for motion pictures and over 90% for recorded music. There are no
legal sources of audio-visual materials in most of the country,
since it would be impossible to compete with pirated products
prices: in the capital of La Paz there is only one store that sells
legal CDs. Bootleg CDs, DVDs, computer software, pharmaceutical
products, and other goods are sold on street corners and in stores
across the country. A recent survey conducted by the Center for
Investigation, Education and Services (Centro de Investigacion y
Educacion y Servicio - CIES) in four cities involving 540 men and
women, shows that 87% of the population buy pirated movies, music,
software, and books. Vendors operate with no fear of punishment,
relying on an agreement signed in 2006 by the Cinema Worker's Union
(Sindicato de Trabajadores Cinematograficos de La Paz), the Mayor's
Office, and local film vendors, which allows the selling of pirated
CDs, but prohibits the sale of films of local production,
pornography, and newly released films.

11. (U) The existing copyright law recognizes copyright
infringement as a public offense and the 2001 Bolivian Criminal
Procedures Code provides for the criminal prosecution of IPR
violations. However, the enforcement of intellectual property
rights remains insufficient. Criminal charges are rarely filed,
and civil suits, if pursued, face long delays. Criminal penalties
are limited to up to five years in jail, and civil penalties are
restricted to the recovery of direct economic damages. Some
Bolivian customs authorities continue to try to intercept
counterfeit goods shipments at international borders, but the
customs service lacks the human and financial resources needed to
be effective.

12. (SBU) The Morales administration has drafted new medical
legislation, which is still under debate. The proposed law would
strengthen restrictions on the sale of pharmaceutical products and
will impose harsh sanctions on companies or persons who operate
outside this law. In spite of these efforts, foreign companies
still have little confidence in the system. Drug companies, in
particular, are reluctant to file patents in the country, fearing
trade secret theft and counterfeiting. After six years, Merck
recently won a validation patent lawsuit. However, the company is
skeptical that the court's ruling requiring that all laboratories
remove products from the market and pay compensation will actually
be enforced. In December 2009, the Ministry of Health conducted an
operation which uncovered the manufacturing of counterfeit
pharmaceutical products and the repacking of expired products. The
operation concluded with the authorities seizing over 30 tons of
pharmaceutical products (anti-inflammatory agents, pain killers,
and others). The authorities closed down the operation, revoked
their license, and began a legal process against the owners of the
charged company.

Possible Opportunity for Improvement
E

13. (U) In an effort to create a new image, as of December 2009,
the GOB appointed a new executive director with a legal background
to SENAPI. SENAPI's primary goal under this new administration is
to establish an enforcement law and build a library to house
Bolivia's intellectual property materials. However, although the
government has increased patent fees to 20 times their previous
rate (an action that is being contested by the Asociacion Boliviana
de Propiedad Industrial or ABPI), the funds generated are
distributed to the general fund and not allocated specifically to
IPR efforts, and the organization's budget remains extremely
limited.

Comment

14. (SBU) Post continues to be pessimistic about the short-term
prospects for greater recognition and protection of IPR. President
Morales has shown little interest in protecting intellectual
property, particularly property belonging to non-Bolivians. While
the IPR situation in Bolivia merits continued standing on the Watch
List, Post recommends against any stronger action at this time as
placement of Bolivia on the Priority Watch List would have no
positive practical result, and the effectiveness of any future IPR
education and outreach would be damaged by Bolivian reaction to a
change in Special 301 status. For these reasons, Post recommends
no/no change to Bolivia's Special 301 Watch List status.
Creamer

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