Cablegate: South China Ipr: Product Identification Seminar

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RR RUEHCN RUEHGH
DE RUEHGZ #1191/01 1930913
ZNR UUUUU ZZH
R 120913Z JUL 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 4533
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RUEAWJA/DOJ WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 GUANGZHOU 021191

SIPDIS

COMMERCE FOR NATIONAL COORDINATOR FOR IPR ENFORCEMENT-
CISRAEL
COMMERCE FOR DAS LEVINE
COMMERCE FOR MAC 3204/ACELICO, LRIGOLI, ESZYMANSKI
STATE FOR EB/TPP AREIAS, ACETO, MASSINGA; EB/IPE - EFELSING
USPTO FOR JDUDAS, TBROWNING, SANTHONY, LBOLAND
USTR FOR CHINA OFFICE-AWINTER; OCG-SMCCOY; IPR OFFICE-
VESPINEL
DHS/CPP FOR PIZZECK
LOC/COPYRIGHT OFFICE-STEPP
DOJ FOR CCIPS-ASHARRIN
FBI FOR LBRYANT
DHS/ICE FOR IPR CENTER-DFAULCONER
DHS/CBP FOR IPR RIGHTS BRANCH-PPIZZECK

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KIPR ETRD ECON WTRO CH
SUBJECT: South China IPR: Product Identification Seminar
Brings Together U.S. Industry and Guangdong Customs

REFERENCE: Guangzhou 20753

(U) This document is sensitive but unclassified. Please
protect accordingly.

1. (U) Summary: Post recently organized a seminar at which
representatives from eight U.S. companies and industry
associations trained 96 working-level officials from
Guangdong Customs on how to distinguish genuine products
from counterfeits. The companies' representatives used
Powerpoint presentations, product samples, and paper
handouts to illustrate their products, including labeling
and packaging, and to highlight characteristics of
counterfeits. Guangdong Customs employs 40 percent of all
of China's Customs officials and the province accounts for
one-third of China's exports. End summary.

U.S. Industry and Guangdong Customs Participants
--------------------------------------------- ---

2. (U) Attending on the U.S. side were representatives from
Nike, Proctor and Gamble, Disney, Mattel, Acushnet (which
owns the Titleist brand), Cleveland Golf, General Motors,
and the Motion Picture Association. Some of the
representatives traveled from Hong Kong for the event. Each
of them spoke for approximately 30 minutes.

3. (U) Attending on the Chinese side were 96 Guangdong
Customs officers, representing all seven Customs
jurisdictions in Guangdong. Guangdong Customs officials
account for 40 percent of all of Customs officials in China,
according to the director of the training center. Most of
the officers in attendance were at the rank of office
manager and thus closely involved in day-to-day enforcement
activities. Most were attentive throughout the seminar and
took notes. Following the event, Guangdong Customs invited
all industry and Customs participants, as well as Econoff
and EconPolAssts, to dinner at the training center
cafeteria.

The Customs Training Center
---------------------------

4. (U) The seminar took place on July 6 at the China Customs
Education and Training Center, located in the outskirts of
Guangzhou. The training center serves all of South China
and is one of three such facilities in China, the other two
being in Shanghai and Beijing. It provides training at all
levels of Customs and consists of several large buildings as
well as dormitories for visiting trainees.

Part of a Mandated IPR Training Course
--------------------------------------

5. (U) The seminar was coordinated to be part of a three-and-
a-half day IPR training course for Guangdong Customs
officials, which was mandated by China Customs in its 2006
action plan. The course includes sessions with Macau
Customs, the Hong Kong trademark office, the Guangdong
Administration of Industry and Commerce, the Guangdong High
Court, and the dean of the Sun Yat-Sen University school of
law.

Presentations: How to Spot Fakes
--------------------------------

6. (U) Most of the industry representatives began their
presentations with background on their companies, including
the brands they own and products they manufacture. They
included photographs of the products, and details of the

GUANGZHOU 00021191 002 OF 003

labeling and packaging, in their Powerpoint presentations.
The representatives also showed photographs of seized
counterfeit products and discussed their identifying
characteristics. Some presenters disclosed where the
counterfeit products were manufactured and their export
destinations. Some also brought samples of legitimate and
counterfeit products for the officials to handle. All of
them left a copy of their Powerpoint presentation with the
training center and also distributed paper handouts with
product and anti-counterfeiting information to each
participant. They also provided the officials with contact
information and encouraged the officials to contact them if
they discover a suspect shipment or have questions about a
particular product.

7. (U) During a question and answer period following the
presentations, only one Chinese official asked to speak. He
noted that Customs regulations now forbid the auction of
seized goods, and as a result the cash reward program for
informants lacks sufficient funding. Some of the
representatives said their companies have reward programs,
which could perhaps be coordinated with Customs. In
addition, they mentioned that China's Public Security Bureau
(PSB) offers cash rewards to informants in IPR cases.

Third Time's a Charm
--------------------

8. (SBU) Post's first two attempts to organize a product
identification seminar were not successful. In March 2006,
Post proposed such a seminar to the Guangdong Intellectual
Property Office, which coordinates IP issues among the
numerous agencies that handle IPR. We requested that
enforcement officials from various IP enforcement agencies
attend the seminar. Guangdong IPO did not move forward with
the proposal, or a follow-up one in April, on the grounds
that the relevant agencies were too busy. Post then decided
to target only one agency, Guangdong Customs, in order to
simplify the approval process and establish a more direct
line of communication.

Comment: Customs -- Cooperative on IPR
--------------------------------------

9. (SBU) Throughout the planning stage for this event,
Guangdong Customs was cooperative and responsive. For
instance, they did not wait for central-level approval
(which came only one week prior to the event) before
beginning arrangements. This stands in contrast to other
South China IPR enforcement agencies, some of which have
declined recent requests for meetings (reftel). The only
significant condition set by Customs was not to include
"discussion" time in the event, as it would require another
set of approvals. Nevertheless, they encouraged Customs
participants to ask questions and were also willing to bring
industry representatives and Customs officials together at
the dinner following the event.

10. (SBU) It is encouraging that working-level Guangdong
Customs officials are required to complete more than three
days of training on IPR -- and that similar courses have
taken place in past years. Guangdong province is
responsible for one-third of China overall trade and is an
engine of China's manufacturing industry -- as well as the
"heart of darkness" for IPR infringement. The export of
counterfeit products to global markets is a growing concern
for U.S. companies. Guangdong Customs, with its reputation
for being well-trained and its significance in terms of
size, will likely remain an important partner in Post's anti-
counterfeiting advocacy and training efforts.

GUANGZHOU 00021191 003 OF 003

MARTIN

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