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Viewing cable 07BANDARSERIBEGAWAN276, USTR PUSHES FOR PROGRESS ON IP PROTECTION

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Reference ID Created Released Classification Origin
07BANDARSERIBEGAWAN276 2007-09-12 05:07 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bandar Seri Begawan
VZCZCXRO5009
RR RUEHCHI RUEHDT RUEHHM
DE RUEHBD #0276/01 2550507
ZNR UUUUU ZZH
R 120507Z SEP 07
FM AMEMBASSY BANDAR SERI BEGAWAN
TO RUEHC/SECSTATE WASHDC 3948
RUCPDOC/USDOC WASHDC
RUEATRS/TREASURY WASHDC
RUEHZS/ASEAN COLLECTIVE
UNCLAS SECTION 01 OF 03 BANDAR SERI BEGAWAN 000276 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPARTMENT FOR EAP/MTS, USTR 
USTR FOR WEISEL AND KATZ 
SINGAPORE FOR FCS 
BANGKOK FOR FCS:NESS 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR PREL BX
SUBJECT: USTR PUSHES FOR PROGRESS ON IP PROTECTION 
 
Ref: A) Bandar 165  B) 06 Bandar 12 
 
BANDAR SER 00000276  001.2 OF 003 
 
 
------- 
SUMMARY 
------- 
 
1. (SBU) In a visit to follow up on issues discussed under the 
U.S.-Brunei Trade and Investment Framework Agreement (TIFA) (ref A) 
USTR Director David Katz pressed Brunei to take more active measures 
against intellectual property rights violations.  GoB officials 
welcomed USG training at ILEA and the U.S. Patent and Trademark 
Office's Global Intellectual Property Academy and asked for further 
capacity building training, particularly for law enforcement 
officers.  Although still bitter about what they viewed as a lack of 
industry patience in a failed raid on IPR violators in December 2005 
(ref B), Brunei police and prosecutors expressed a willingness to 
work with us and industry to improve enforcement efforts and adopt 
some U.S.-style legal measures in a new IPR law under development. 
Post has reached out to industry and regional USG experts to follow 
up on the GoB training requests.  END SUMMARY. 
 
------------------- 
Brunei Must Do More 
------------------- 
 
2. (SBU) In a two-day visit August 31-September 1 to follow up on a 
broad range of issues raised at the 3RD U.S.-Brunei Trade and 
Investment Council meeting in May (ref A), USTR Director for 
Southeast Asia David Katz, accompanied by DCM, pressed a broad range 
of GoB officials to improve efforts to protect intellectual 
property.  In meetings with officials from the Ministry of Foreign 
Affairs and Trade, Police, and Attorney General's Chambers, Katz 
emphasized that IP protection is not just about stopping optical 
disc (OD) piracy.  A climate of lax IPR enforcement can lead to the 
proliferation of counterfeit medicines, food products and auto parts 
behind China's current trade troubles.  These trade problems also 
have a direct, measurable impact on the health and safety of the 
public.  Katz noted that Brunei was not currently on any of the 
Special 301 lists, but the GoB would need to take a more proactive 
stance on IPR protection to stay ahead of the curve. 
 
3. (SBU) Katz and DCM also noted that as Brunei seeks to diversify 
its economy away from oil and gas, it will never be able to compete 
in low wage, high labor content industries in the ASEAN region and 
will have to focus on high value products.  This will require good 
IPR enforcement not just for foreign IP rights holders, but also to 
ensure that IP developed by Brunei firms is protected.  A good 
example of this is the investment the GoB is making to develop a 
specific pathogen-free, jumbo-sized strain of Asian tiger prawn for 
export to the U.S. and other high-end markets.  As the value of this 
product will be in its unique genetic make up, Brunei will have to 
ensure that this IP is protected from unlicensed use by lower-cost 
shrimp producing countries. 
 
-------------------- 
Scope of the Problem 
-------------------- 
 
4. (SBU) Brunei authorities acknowledge that despite their efforts 
to combat video piracy, counterfeit DVDs are routinely available in 
local stores.  In a random sampling of video/music stores within two 
blocks of the embassy, DCM and Katz routinely found multiple copies 
of movies currently only in theatrical release - the Bourne 
Ultimatum, and Harry Potter and the Order of the Phoenix.  These and 
other titles in regular DVD release are sold in hard-sided plastic 
packaging resembling legitimate DVDs, but the packages lack shrink 
wrap, holographic security stickers, or other authentication 
indicators and the cover art is easily recognizable as color Xeroxes 
of the original or photoshop combinations of movie poster art and 
DVD labeling information from North American or Asian DVDs. 
 
5. (SBU) Brunei police have not found any illegal production 
facilities in Brunei and believe that most pirated optical discs are 
imported from Malaysia, Indonesia, and Hong Kong.  Under current law 
and regulations, the Police asserted that customs officials are 
powerless to stop counterfeit goods if the importer has declared the 
goods on customs documentation and paid any fees or duties. 
Prosecutors told us that they were able to stop a shipment of the 
movie Batman Returns because the rights holder had provided an 
affidavit in advance that the importer did not have distribution 
rights in Brunei.  In response to our questions, Brunei authorities 
said that they had no information that would indicate any organized 
crime involvement in the pirate OD or software trade.  In fact, in 
past public education efforts, GoB officials came to believe that 
most retailers would prefer to sell legitimate ODs and software but 
 
BANDAR SER 00000276  002.2 OF 003 
 
 
are pulled into selling pirated goods because of competitive 
pressures. 
 
6. (SBU) Microsoft's local representative told us that software 
piracy is rampant, but conducted on a small scale by local 
businesses.  Customers can leaf through catalogues of software 
titles and have a disc burned on the spot with the titles they seek. 
 We note that in the last year, DCM attempted to purchase Microsoft 
software for personal use and had to visit three different stores 
before finding a vendor with a legal copy in stock.  All three 
stores openly offered to sell acknowledged illegal copies of the 
software in question. 
 
------------------------------------ 
GoB Wants Partnerships with Industry 
------------------------------------ 
 
7. (SBU) Police and prosecutors told us that their hands are tied by 
Brunei's current law which requires the copyright holder to file a 
complaint in order to initiate enforcement action.  This requires 
close cooperation with rights-holders throughout the investigation 
and prosecution of suspected violations.  GoB officials emphasized 
that their track record of working with rights holders has been 
mixed, but often negative.  In a summary of IPR cases investigated 
by the police over the past 10 years, a significant number of 
investigations were dropped because the complainant either did not 
have or could not prove that they had distribution rights for Brunei 
for the articles in question (which were found to have been 
legitimate and legally imported) or the rights holder failed to 
respond to requests for documentation to bring a case to trail. 
According to this police data, Brunei successfully arrested, 
prosecuted and convicted 14 vendors in 1996 and one in 1997 for 
selling fake Levi's jeans.  Vendors were also convicted in 2000 and 
2003 for selling fake Hindu and Indonesian DVDs. 
 
8. (SBU) In the December 2005 case of the failed raids conducted on 
behalf of the Motion Picture Association (ref B), the police officer 
who ran the investigation was up front in admitting that mistakes 
were made on the Brunei side with the search warrant (part of the 
shop raided was located in an adjacent building not covered by the 
warrant, so the shop staff moved all the pirated material out of the 
covered location before police arrived).  However, police and 
prosecutors were both adamant that if the MPA had shown more 
patience and stayed in Brunei longer, a follow up raid would have 
been conducted and likely have caught the offending materials. 
 
9. (SBU) Despite this track record, GoB authorities were ready to 
work with rights holders to combat piracy under the current law. 
While they understood the cost-benefit trade off for the rights 
holders, they urged that rights holders establish a presence in 
Brunei either by opening an office or through regular visits.  This 
was necessary to help rights holders understand how to work within 
the Brunei legal system and to build confidence on the Brunei side 
that the rights holder would follow up with required documentation 
to bring a case to trial to justify the investment in manpower to 
investigate and prosecute a violator. 
 
------------------------- 
Possible Law Improvements 
------------------------- 
 
11. (SBU) GoB officials across the board agreed that Brunei needs to 
strengthen its IPR protections.  Katz suggested that granting police 
and customs officers ex officio authority to seize suspected 
materials and then follow up with rights holders to verify the 
authenticity of faked goods was an international best practice that 
Brunei should consider adopting.  The Attorney General's Chambers 
(AGC) officials responded that they are in the process of drafting a 
Copyright Law to supersede the existing Copyright Order.  The 
officer drafting the legislation told us that elements of U.S. model 
copyright and IPR protection guidelines are being considered for 
inclusion in the new law and associated procedural guidance.  Work 
is expected to be completed on the draft by the end of the year. 
Katz suggested that the GoB provide a draft of the law for expert 
review by the USG.  AGC officials welcomed the offer and would 
consider taking advantage of the expertise. 
 
---------------------- 
Need Capacity Building 
---------------------- 
 
12. (SBU) Police and prosecutors welcomed USG-supported IPR 
enforcement training they had received at the International Law 
Enforcement Academy (ILEA) in Bangkok and at the U.S. Patent and 
Trademark Office's Global Intellectual Property Academy (GIPA) in 
 
BANDAR SER 00000276  003.2 OF 003 
 
 
Virginia.  All GoB officials we met with indicated that customs 
officials in particular, but police as well needed training in how 
to identify fraudulent goods.  Such training, AGC officials 
explained, would ease concerns about wrongly identifying goods as 
counterfeit.  This would be essential if the AGC were to take Katz's 
suggestion of using probable cause to justify seizing suspect goods 
absent a complaint from a rights holder under current law.  However, 
GoB officials would also want to have built a relationship with the 
rights holder to ensure timely response to requests to authenticate 
suspect goods.  AGC officials also indicated that training for 
judges would also be welcome. 
 
13. (SBU) In response to these requests, post is working with 
regional industry representatives to find opportunities to restart 
their enforcement cooperation with the GoB.  In addition, we are 
working with our regional USG law enforcement and IP protection 
officials to find additional training opportunities outside of 
regularly scheduled ILEA and GIPA courses. 
 
SKODON