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Viewing cable 09BUENOSAIRES261, MISSION BUENOS AIRES VIEWS ON ARGENTINA'S 2009 SPECIAL 301
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 09BUENOSAIRES261 | 2009-03-11 14:27 | 2011-08-25 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Buenos Aires |
VZCZCXYZ0001
RR RUEHWEB
DE RUEHBU #0261/01 0701427
ZNR UUUUU ZZH
R 111427Z MAR 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3200
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
UNCLAS BUENOS AIRES 000261
SIPDIS
SENSITIVE
DEPT FOR EB/TPP/IPE JENNIFER BOGER AND ROBERT WATTS
DEPT PLS PASS TO USTR JENNIFER CHOE GROVES, KATHERINE DUCKWORTH
DOC/ITA/MAC/OIPR FOR CATHERINE PETERS
PLEASE PASS TO USPTO JURBAN AND LOC STEPP
E.O. 12958: N/A
TAGS: KIPR ETRD ECON AR
SUBJECT: MISSION BUENOS AIRES VIEWS ON ARGENTINA'S 2009 SPECIAL 301
REVIEW
REF: A. STATE 8410
¶B. 08 BUENOS AIRES 231
¶C. 08 BUENOS AIRES 336
-------
Summary
-------
¶1. (SBU) In 2008, Argentine authorities responsible for providing
"adequate and effective protection to intellectual property rights"
made few meaningful improvements in IPR legislation, regulation and
enforcement, and there remain serious weaknesses in each of these
areas. Multiple law enforcement actions within Argentina's most
notorious illegal market and Customs authorities' increasingly
successful implementation of a trademark fraud prevention program -
seizures of imported falsified goods are up 1600% in the two years
since the program began - were notable positive exceptions. On
legislation, an amendment to the criminal code to increase fines for
falsifying medication trademarks was a minor improvement, offset by
an amendment which codified a de facto lack of patent enforcement
for imports of pharmaceuticals. On patents, actual patent
adjudications in 2008 dropped by 40% from prior year levels. The
application backlog remains large, effectively curtailing the period
of patent protection, and injunctive relief for patent infringement
continues to be complex, slow and variably enforced. On the key
issue of "data confidentiality," there has been no progress, with
proprietary third-country pharmaceutical data routinely used by
domestic competitors in violation of TRIPS Article 39.3. On
copyrights, CD and DVD piracy remains prevalent and illegal internet
downloading/distribution has continued to rise, according to
industry sources. Trademark falsification remains widespread, with
illegal markets poorly policed. Minimalist fines and penalties on
non-medical products offer little deterrent to falsification. On
the positive side, Customs authorities continued to exercise their
trademark enforcement powers in 2008, seizing a significantly higher
amount of counterfeit goods. While Argentine authorities have
certainly taken some steps in the right direction, the overall lack
of progress (and the unfortunate backwards movement on patent
protection at the border) leads Embassy to recommend that Argentina
remain on the Priority Watch List in 2009. End Summary.
-------
Patents
-------
¶2. (SBU) After five years of progress in reducing its patent
application backlog, Argentina's patent and trademark agency, the
National Institute of Industrial Property (INPI), adjudicated fewer
patent applications than it received in 2008. Patent applications
fell 3% to 5,566 in 2008, while adjudications fell substantially,
dropping just over 40% to 3,682. Representatives of U.S.
pharmaceutical companies with operations in Argentina, based on
their own experience and on their conversations with other
multinational research-based pharmaceutical firms operating in
Argentina, confirm that the decline in adjudications on their
product applications has been notable. Despite the decline in
adjudications, the patent application backlog fell, as over 3,200
applications were deemed "abandoned" by INPI. Graciela Adan, INPI's
Coordinator of Institutional Relations, attributed the high volume
of abandoned applications to the current economic crisis, claiming
that applicants were choosing not to pay fees required at the time
of an application's full investigation. Industry representatives
instead attribute the increase in abandoned applications to an INPI
"fast-track" process in which patent applicants were able in 2008 to
reprioritize their applications which were pending consideration.
(Note: While INPI declined to share their estimate of the current
patent application backlog, local industry sources estimate it to be
in the 23-24,000 range. End Note.)
¶3. (SBU) With the Argentine 15-year patent protection clock starting
at the time of application rather than issuance, U.S. research-based
pharmaceutical companies operating here complain that INPI's
extended patent processing backlog effectively curtails their period
of exclusive patent protection. For example, the majority of
patents issued by INPI in the fourth quarter of 2007 had been
applied for no later than in 2002, and applications for
pharmaceutical and other chemical products take longer than average
to process. INPI officials claim their efforts to accelerate patent
application adjudication are hampered by budget constraints and the
continuing challenge of maintaining adequate human resources, with
trained examiners frequently hired away by the private sector and
long in-house training periods required to bring newly hired
examiners up to competence.
¶4. (SBU) The lack of local patent protection for many
pharmaceutical products, coupled with Argentina's 300+% devaluation
in 2002, which resulted in sharp price increases for imported
products, increased incentives for local pharmaceutical companies to
produce unlicensed copies of products patented elsewhere or for
which local patents were pending. Despite high domestic inflation
that raised local production costs over the past year, a currently
depreciating peso and a GoA commitment to maintain local
manufacturing jobs favor domestic pharmaceutical production.
According to CAEMe (the Argentine Chamber of Medicinal Specialties,
an association that represents U.S. and other research-based
pharmaceutical companies), local pharmaceutical firms hold over 50
percent of the Argentine prescription and over-the-counter market as
well as almost 50 percent of the export market. (Note:
Research-based multinational pharmaceutical companies operating in
Argentina do not perceive all local pharmaceutical firms as patent
infringers. Some of the producers/exporters, according to CAEMe
leadership and member company representatives, deal only in products
which are either licensed or have expired patent protection, and
therefore are legitimate generics. End Note.) Argentina amended
its patent law (Law 24481) in December 2003 to implement an
agreement between the USG and the GOA that had been signed in May
¶2002. That agreement came after approximately three years of
consultations under the WTO's dispute settlement mechanism.
¶5. (SBU) The most important unresolved pharmaceutical patent issue
remains the lack of effective "data protection" (i.e., the legal
protection of confidential and proprietary data developed by
pharmaceutical companies that demonstrates the efficacy and safety
of new medicines). U.S. and other research-based pharmaceutical
companies (as well as plant biotech firm Monsanto) believe this to
be the most significant IPR challenge they face. Argentina and the
U.S. have agreed to leave this issue within the WTO dispute
settlement mechanism for future action. GoA policies have led
research-based pharmaceutical companies to complain that Argentine
health regulatory authorities (in particular ANMAT, the National
Administration of Medicines, Food, and Medical Technology, the
equivalent of the FDA) rely inappropriately on data developed by
research-based companies and presented by companies which did not
participate in such research to ANMAT to obtain marketing approval
of unauthorized copies of innovative medicines. According to CAEMe,
ANMAT interprets the public disclosure of partial data as an
indicator that the data should be regarded as in the public domain.
Article 39.3 of the TRIPS agreement requires WTO members to protect
data submitted for pharmaceutical marketing approval "against unfair
commercial use" and "disclosure." However, non-research-based
companies need only present publicly-available information, such as
an existing FDA approval of a product, rather than confidential
portions of clinical studies results, to obtain marketing approval
for their product. Therefore a non-research-based company can
legally obtain permission to market potentially patent-infringing
products. Ernesto Felicio, Executive Director of CAEMe, told
Econoff in 2009 that "in practical terms, there is no protection of
confidential data" in Argentina. Because of this lack of
protection, a non-research-based company can obtain marketing
approval of its products not only without a patent, but without
proving either their safety or efficacy.
¶6. (SBU) U.S. pharmaceutical companies also remain concerned about
the legal implications of two specific clauses in the 2003
amendment. Specifically, the amendment mandates an expert opinion,
and requires consideration of the economic impact of an injunction
on both parties to determine whether or not goods alleged to violate
the patent law should be seized. When the amendment was passed into
law, research-based pharmaceutical companies feared that those
clauses could preclude the granting of preliminary injunctive relief
and limit the success they have achieved in protecting their
products through the use of preliminary injunctions.
¶7. (SBU) Those fears have been realized. In January 2007,
Bristol-Myers Squibb (BMS) received a patent for a product already
being produced without permission by competitors, a clear example of
the lack of data protection. By February, BMS obtained a
preliminary injunction blocking illegal copies of the product. The
court cited TRIPS procedures as reasons for granting the injunction.
However, in May 2007, the injunction was overturned on appeal. BMS
was forced to file the case based not on TRIPS treaty obligations,
but on Argentina's patent law alone. This process is much slower -
while the initial injunction took barely a month, no court decision
has been reached in over eighteen months since the appeal was
initiated. Prior cases illustrate other weaknesses in the
injunction process of the patent law. In 2005, Eli Lilly discovered
several Argentine competitors selling copies of its lead oncological
drug, and sought injunctions to prevent those sales. An injunction
against one infringer was issued after an 18-month judicial process,
but was later revoked when the infringer presented what it claimed
was an alternate process to produce the medication (the patent is
based on the process, not the molecule, as in the BMS case), without
evidence that the process was in use, or that it even worked. For
another infringer, the application for an injunction was rejected by
a judge convinced by a local expert hired by the defense, who
claimed that the copycat drug did not violate the U.S.
pharmaceutical company's patent. Of the three known infringers of
Eli Lilly's medication, two had already signed agreements in court
not to produce copies, and proceeded - and still continue, in 2008 -
to violate those agreements. In another instance, Merck Sharp and
Dohme went to court in 2005 to remove five copies of one of its
joint-venture drugs from the Argentine market. In a promising
ruling, the judge issued injunctions ordering the copies off the
market. More than 40 months after the decision, however, those
injunctions have yet to be enforced - despite the fact that the
judge in the case ruled the legal basis for the copy drug's approval
unconstitutional, as well as in violation of TRIPS Article 39.3.
(Note: the injunction ordered ANMAT to rescind marketing approval of
the copied product, which ANMAT has not yet done. According to
CAEMe, the only further legal recourse available to Merck would be
to demand the arrest of those responsible for the GoA's failure to
comply with the court order - the Director of ANMAT and/or the
Minister of Health. Merck is unwilling to pursue this course of
action. End Note.)
¶8. (SBU) A frequent complaint of U.S. pharmaceutical companies is
that there remains in Argentina no regulatory linkage between INPI
and ANMAT. Its absence in Argentina allows ANMAT to grant local
pharmaceutical producers authorization to manufacture and sell
products that have already been patented or for which a patent has
been requested. The Embassy and multinational pharmaceutical
companies have urged the GOA to establish a linkage between ANMAT
and INPI that would prevent ANMAT from continuing to authorize local
pharmaceuticals to produce products for which an INPI patent has
been granted or is pending. While such linkage is not explicitly
required by TRIPS, its implementation would provide a potential
remedy for the lack of data protection. U.S. and other
research-based pharmaceutical companies must incur the legal costs
of obtaining injunctions to stop the production and sale of products
produced by local pharmaceutical companies for which the
research-based companies have Argentine patents.
¶9. (U) Law 25649 adopted in 2002 requires medical doctors to use a
drug's generic name in all prescriptions. Doctors may also include
a trademarked version of a drug (and no more than one) in their
prescriptions, but pharmacists may still offer a substitute. If a
medical doctor does not want a substitute provided, the reason must
be indicated on the prescription. U.S. and other research-based
pharmaceutical companies operating in Argentina believe this law
diverts sales from innovative medicines to TRIPS-infringing copy
products. Some of these firms argue that true generics do not exist
in Argentina because copy products are not required to demonstrate
their bioequivalence or bioavailability with original products,
meaning local producers can sell drug copies that lack quality and
safety assurances.
¶10. (SBU) Concerns have also been expressed by market players over
criteria for patentability. U.S. biotech company Monsanto notes
that INPI resolution 243/2003 precludes the issuance of patents for
transgenic plants and animals, despite the fact that the patent law
(Law 24481, a higher legal authority than a resolution) excludes
from patentability only living material that is "pre-existing in
nature." International pharmaceutical firms and CAEMe told Post
that, late in 2007, INPI refused to grant patents for two new
pharmaceutical products for "lack of an inventive step." The
products were reformulations of previously patented medications
(i.e., "evergreen" products), but such products had consistently
received patents before. While one of those was approved by INPI in
2008 on appeal (the other remains pending), it appears that pressure
has been applied on patent examiners to alter their adjudication
standards. In early 2008, according to Felicio, then-Health
Minister Gonzalez visited INPI, taking time to speak to
pharmaceutical patent examiners individually to remind them of their
"social responsibility" in helping to ensure access to medicines.
¶11. (SBU) Alfredo Chiaradia, the Secretary of Foreign Trade in the
Foreign Ministry, sent the Customs Director a letter in April 2008
(copied to the Minister of Health and the Secretaries of Agriculture
and Industry) expressing "concern" that discussions in World Customs
Organization (WCO) meetings could lead to a decision to implement
"TRIPS-plus" IP protection. The letter might have been prompted by
pressure from the local pharmaceutical chamber, which wrote a
similar letter (citing the same WCO working group) to the Customs
Director two months later.
¶12. (U) Argentina has yet to become a contracting state to the
World Intellectual Property Organization's (WIPO) Patent Cooperation
Treaty. The WIPO treaty's mutual patent recognition provisions
among 135 Contracting Parties would eliminate much of INPI's current
patent application backlog, since the majority of patent
applications are from foreign individuals and entities.
----------
Copyrights
----------
¶13. (SBU) The incidence of Argentine copyright piracy via
"traditional" CD and DVD copying does not appear to have declined in
Argentina. The IIPA estimates that music piracy rate was 60% in
2008, the same level since 2005, and that business software piracy
rose one percent to 75% in 2008. Industry groups estimate an
increase in the frequency of illegal electronic downloads. The IIPA
reports that total seizures of optical media were 3.2 million, down
30% from 4.6 million discs in 2007, but up 88% from 1.7 million in
¶2006. Customs alone seized over 1.5 million blank CDs and over 900
thousand blank DVDs (the DVDs were all part of a single shipment,
which also had nearly a quarter million blank CDs) which had been
imported as contraband.
¶14. (SBU) Optical Media Piracy: Problems in this area include the
widespread and open sale of pirated copies of CDs and DVDs, and
increasing number of businesses offering home delivery (often
coordinated entirely online) of pirated artistic content.
Argentina's copyright regime, largely based on the 1933 Copyright
Act (as amended), provides generally good nominal protection,
including authority for Customs to seize imported products which
violate copyrights. However, the lack of any real enforcement (in
current practice, pirates will likely - see para 21 for an exception
- face jail time only if their involvement can also be defined as
organized crime), coupled with the disincentive to purchase
legitimate - but more expensive - imported products, has spurred
piracy. A survey sponsored by the local American Chamber of
Commerce in 2006 showed that, while more than half the population
believes that piracy precludes job creation and facilitates tax
evasion, two-thirds of Argentines have knowingly bought pirated
products. A local attorney specializing in copyright issues told
Econoff that, while the Argentine legal system does not function at
a first-world level, it is "not bad for the region." The legal
system will generally respond when needed to seize counterfeit
media, the attorney said, but the existence of a personal
relationship with relevant authorities is helpful.
¶15. (SBU) Illegal Downloads: Electronic delivery of copyright
infringing materials is on the rise. CAPIF (the Argentine Chamber
of Phonograph and Videograph Producers) estimates that 99% of all
songs downloaded from the internet in 2006 and 2007 were downloaded
illegally; over 600 million illegal songs were downloaded in
Argentina in 2006, a nearly 50% increase from 2004. This growth is
roughly in line with the significant increase in broadband internet
access in Argentina. CAPIF has not repeated the study, but their
Executive Director, Javier Delupi, claimed to Econoff that this
number has only grown since 2006. In 2008, legal music downloads
were 4.3% by value of total legal music sales in Argentina, with
over 97% of that total coming from cellphone downloads, and the rest
from internet sales. In 2008, thanks to CAPIF and the International
Federation for the Phonographic Industry (IFPI), two major internet
forum sites removed all known links to illegal, online music files.
24,000 messages offering such links were removed. According to
CAPIF estimates, illegal internet downloads represent the largest
portion of music piracy in Argentina. CAPIF is trying to organize a
roundtable with internet service providers (ISPs) in Argentina in
2009 to discuss methods to reduce such downloads.
¶16. (U) Use/Procurement of Government Software: The GOA has yet to
fully comply with its 1999 agreement with the local software
industry to legalize unlicensed software used in some national
government offices. In conversations with Econoff, GoA contacts in
the Ministries of Economy and Planning estimate that over 90 percent
of GoA agencies employing licensed software are using it illegally.
¶17. (U) Proposed Augmentation of Copyright Penalties: In 2007,
motion picture and recording industry representatives proposed to
Congress a modification of the criminal code to increase currently
nominal criminal penalties and fines for copyright violations. The
modification would also facilitate the destruction of pirated goods
by providing discretion to the rights holder over disposition of
infringing goods as well as make updates to the law to address
modern technologies. While a draft bill proposing these changes was
formally tabled for Senate consideration by sympathetic
parliamentarians in 2007, no legislative action was taken on the
bill by the end of 2008. As a result, the proposal would have to be
resubmitted by parliamentarians in the current 2009 legislative
session in order to be considered.
----------
Trademarks
----------
¶18. (SBU) Industry sources agree that Argentina's 1982-era
trademark law (Law 22362) generally meets international standards,
but note that nominal fines have not proven significant deterrents
to falsification. A number of amendments to the Penal Code over the
past six years have limited penalties to probation periods and
rendered it less effective. A former INPI head and other industry
participants charge that these amendments render trademark
protection inconsistent with WTO norms. They argue that existing
remedies no longer meet TRIPS Article 61 requirements, which
obligate members to adopt trademark laws which "include imprisonment
and/or monetary fines sufficient to provide a deterrent" to
counterfeiting. On a positive note, INPI has increased its
efficiency in the process of renewing trademarks. However, while
INPI trademark adjudication, like patent processing, sped up in
recent years, it fell back in 2008. According to official INPI
statistics, trademark applications (including renewals) increased
25% to 89,629 in 2008, but total adjudications (including over 8,500
abandoned) fell 12%, to 73,035. (Graciela Adan, INPI's Coordinator
of Institutional Relations, argued that the adjudication total was
similar to other previous years, though adjudications in 2008 were
also 11% lower than in 2006 and 2.3% lower than in 2005.) Raids by
local police on flea markets where counterfeit merchandise is openly
sold have not been frequent or widespread enough to lessen the
availability of pirated goods. Representatives of industries
frequently targeted by counterfeiters claim that over forty large,
well-established markets exist in Buenos Aires alone that are almost
completely dedicated to the sale of counterfeit goods (in addition
to innumerable smaller points of sale throughout the country). The
largest of these markets, which is reputed to be the largest in
South America, is called "La Salada." According to reports, 6,000
people work there, and up to 50,000 customers visit and make USD 9
million in purchases daily. (Note: The EU highlighted this market
in its October 2006 301-equivalent report, which received
considerable press attention in Argentina. End Note.) "La Salada"
has a dangerous reputation, and post IPR contacts have told us that
organized crime elements operate within the market.
¶19. (SBU) Amendments to Existing Legislation: Argentine trademark
legislation had a minor, positive modification in 2008, which
increased penalties for falsifying medications (i.e., violating a
trademark, not a patent). Offenders previously faced a potential
prison sentence, but now can also be fined 10,000 to 200,000 pesos
(from approximately $3,000 to $57,000). Since penalties for
trademark violations are typically probation (absent death or injury
caused by the falsified medication), CAEMe leadership notes that the
fines create at least some deterrent penalty in these cases.
Numerous other proposals to augment trademark protection have not
prospered, including one drafted by members of the American Chamber
of Commerce in Argentina. While several proposals have been
sponsored by various parliamentarians in the last few years, none
has been progressed beyond the congressional committee review
stage.
¶20. (SBU) A court case on counterfeiting has sent an inopportune
signal about trademark protection in Argentina. In 2007, a judge in
Tucuman province ruled that a vendor of counterfeit athletic shoes
acted "in good faith" in part because he had legal invoices for his
purchases. This decision came despite a reported agreement
(presented as evidence in the case) between the vendor and the
manufacturer, which acknowledged that the shoes were made with a
copied trademark. The case was appealed by the trademark owner, and
the appeals court overturned the decision in 2008. However,
according to the trademark owner's attorneys, the case was sent back
to the local court, where it ended without a conviction.
-------------------
Enforcement actions
-------------------
¶21. (SBU) The most notable enforcement actions of 2008 were three
raids conducted within notorious street fair "La Salada" (see para
18). These enforcement actions follow two 2007 raids which are
thought to be the first such actions in "La Salada." Seized in the
2008 raids were a total of over 10 million copies of cover artwork
(which would be inserted inside plastic cases of copied discs for
sale), 25 industrial disc-pressers, 115 disc-burners, and over
130,000 already-copied CDs and DVDs. Eight people were arrested in
one raid. Many of the copied discs seized were "master" discs, so
that purchasers could buy those and the copied cover artwork and
make their own pirated CDs to sell. Econoff has been informed by
Province of Buenos Aires tax authorities that a number of
high-profile tax and IPR enforcement actions in the La Salada market
are being planned for the 2009 calendar year.
¶22. (SBU) Another positive event was a conviction and 10-month
prison sentence for a man caught selling pirated DVDs. The Motion
Picture Association lawyer who initiated the case told the press
that this was the first-ever prison sentence handed down in
Argentina for pirating movies (two convicted music pirates received
three- and five-month sentences in 2007, but convicted movie pirates
had routinely received probation or a suspended sentence). In
another notable enforcement action, a police official told press in
November 2008 that a Mexican national arrested on charges of
smuggling ephedrine in bulk was also "working in the production of
pirated CDs and DVDs." The attorney also noted that the pirate had
other criminal convictions, which may have contributed to the
sentence he received.
¶23. (SBU) On the other hand, the Argentine Congress weakened
potential patent enforcement on imported products by amending an
existing law in December 2008. Law 25986, which was passed in
December 2004, prohibited the import or export of merchandise which
violates any intellectual property rights. The amendment codified a
de facto lack of patent enforcement (as the law was never fully
implemented) by explicitly limiting border enforcement to trademarks
and copyrights. While the amendment appears consistent with TRIPS
Article 51, which requires border measures to prevent "the
importation of counterfeit trademark or pirated copyright goods," it
appears non-compliant with TRIPS Article 28.1, which specifies that
a patent shall allow its owner to "prevent third parties not having
the owner's consent" from importing, as well as selling, that
product.
¶24. (SBU) In October 2006, AFIP (the Federal Administration of
Public Revenue, an IRS-equivalent and with authority over
Argentina's Customs agency) issued a decree which allows Customs to
detain potential trademark violating merchandise until the holder of
the locally registered trademark authenticates the shipment, and
seize it if the holder does not. While regulation of law 25986
would have also allowed detention and seizure of merchandise which
violates patent norms (such as copied pharmaceutical products), the
AFIP decree only applies to trademarks. This new trademark
interdiction program, which became operational in April 2007, has
proven highly successful. According to data provided by Customs,
the total retail value of trademark violations seized in 2008 was
US$ 58.2 million - a 77% increase over such seizures in 2007, and an
increase of over 1600% compared to 2006, the year before the program
was implemented.
¶25. (SBU) Regarding training in 2008, Post nominated two federal
criminal judges who attended a USPTO course specifically for judges
and prosecutors on criminal enforcement of copyright and trademarks,
and two officials from the GoA National Seed Institute who attended
a USPTO course on the International Union for the Protection of New
Varieties of Plants (UPOV). Post also made arrangements for a total
of four GoA officials - two Buenos Aires City prosecutors and two
from the federal Prefectura Naval (Coast Guard equivalent) - to
attend a week-long IPR training course in Lima, Peru, at the
International Law Enforcement Academy (ILEA) there.
---------------------
GMO Rights Protection
---------------------
¶26. (SBU) Argentine farmers have the legal right to replant -
although not to sell - seed generated from a harvest originating
from registered seeds without paying additional royalties. However,
despite laws on the books to the contrary, Argentine farmers have
long sold registered seeds without payment of required royalties, a
practice which continued in 2008. This is a widespread problem with
soybean seed. According to the president of an Argetine seed
producer association (in which Monsanto participates), 65-70% of all
soy grown in Argentina is produced from Roundup Ready seeds for
which no royalties have been paid. Farm associations and industry
representatives generally agree that Argentina must elaborate and
enact a new seed law that better protects intellectual property.
The government of Argentina recognizes the need for a new law, but
pressures from competing interests have delayed its development, and
no complete draft was produced in 2008. The sale of registered seed
from Argentina to neighboring countries, also without payment of
royalties, has led to significant planting of unregistered biotech
soybeans in Brazil and Paraguay. Argentina is a party to the 1978
Act of the International Union for the Protection of New Varieties
of Plants (UPOV), but has not signed the 1991 UPOV convention
revision. Monsanto reps have told post that they do not intend to
introduce the next generation of Roundup Ready until Monsanto is
assured that it will receive proper royalty payments. Ambassador
and Embassy officers have raised the Monsanto problem frequently in
2008, but there has been no progress on a new law. Monsanto has
been in discussions with the Government and farm groups, and reports
some progress in convincing all parties of the need to address this
issue. The Argentine Government approved in February 2009 a new
biotech cotton seed variety after local officials and the cotton
industry reached an agreement with the seed provider to ensure
payment of royalties for the new technology.
-----------------------
Embassy IPR Initiatives
-----------------------
¶27. (SBU) Beyond significant regulatory and enforcement
deficiencies detailed above, reluctance by the various GoA
enforcement entities to cooperate with each other is a problem that
has long contributed to ineffective anti-piracy action in Argentina.
The Embassy therefore encourages IPR training that brings together
representatives from the full range of GOA institutions involved in
anti-piracy efforts. The trust and familiarity resulting from such
cooperation would help foster GoA inter-agency teamwork of the sort
necessary to effectively combat piracy. One such opportunity began
in 2007. With the assistance of the U.S. Department of Justice,
Post brought GoA and Argentine private sector officials together for
a workshop to explore and develop innovative IPR enforcement
methodologies consistent with Argentina's legal and regulatory
framework. GoA officials from nine different government entities
attended, including a federal judge, a federal prosecutor, the
Gendarmeria, the Prefectura, the Federal Police, Customs, AFIP
(parent agency of Customs and IRS-equivalent), and prosecutors from
both the Province and City of Buenos Aires. The working group was
the first public/private IPR working group to meet in Argentina in
several years, if not ever. The successful end-product was a manual
on enforcement techniques specific to Argentina, which was published
in October 2008 with DOJ, Post and INL assistance. Dozens of
manuals have since been distributed, including many to the Federal
Police training school at the request of the school's leader. The
printing and distribution of the manual was a key deliverable in
Post's 2008 strategic IPR plan (Ref C).
¶28. (SBU) Another key aspect of Post's IPR plan is public outreach.
Along with editorial pieces under Ambassador's byline on the
benefits for Argentina of increased protection of innovation and
creativity, Post has partnered with the local American Chamber of
Commerce (AmCham) in some of its IP initiatives. The AmCham has an
annual IP conference and an annual IP essay contest for college
students and young professionals, and the Ambassador's participation
in both has helped attract press attention to disseminate a pro-IP
more widely message in Argentina.
--------------------------
Comment and Recommendation
--------------------------
¶29. (SBU) Argentina has been on the Special 301 Priority Watch List
since 1996. The growing success of the GoA's Customs trademark
fraud interdiction program, in effect since 2007, is laudable, and
the increased law enforcement activity in the La Salada market is
significant. However, there has been no positive movement on the
key issues of data protection, patent backlog, injunctive relief,
and trademark and copyright fraud rates. The lack of pharmaceutical
patent data protection is the issue most often called to Post's
attention by U.S. industry participants, and appears to violate
TRIPS Article 39.3. The significant decline in INPI patent
adjudications in 2008, which INPI attributes to budget constraints,
is disappointing and calls into question the organization's ability
to make further inroads into a patent application backlog that
significantly curtails the effective periods of patent protection.
Patents that do get issued carry a questionable legal weight, as
evinced by ongoing problems with copied products, the lack of legal
resolution of some infringement cases, and variable enforcement of
those infringement cases where injunctions have been obtained.
Estimated rates of copyright and trademark violations have not
diminished; Argentina's legislature and enforcement arms have not
undertaken measures necessary to discourage new violations; and the
Argentine judiciary remains ambivalent in the fight to protect
intellectual property. Arguably, positive GoA actions to improve
IPR protection in 2008 were offset by the GoA's action to weaken
legislative protection for imports of patented goods. Given the
persistence of several significant IPR problems here, the Embassy
recommends that Argentina remain on the Special 301 Priority Watch
List for 2009. End Comment.
¶29. (SBU) To see more Buenos Aires reporting, visit our classified
wbsite at: http://www.state.sgov.gov/p/wh/buenosaires.
WAYNE