VZCZCXRO7846
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #3272/01 3641022
ZNR UUUUU ZZH
O 301022Z DEC 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9432
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
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RUEHCHI/AMCONSUL CHIANG MAI IMMEDIATE 7436
UNCLAS SECTION 01 OF 04 BANGKOK 003272
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STATE PASS TO USTR FOR BWEISEL, BKLEIN, RBAE
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SINGAPORE FOR FINATT BLEIWEIS
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SIPDIS
E.O. 12958:N/A
TAGS: ECON ETRD KIPR PREL TH
SUBJECT: AMERICAN IPR OWNERS DISCUSS CONCERNS WITH AMBASSADOR
REF: A. BANGKOK 2984 (FOCUSED ON SPECIAL 301)
B. BANGKOK 2848 (PREPARING FOR LOCKE-ALONGKORN MEETING)
C. BANGKOK 2768 (PRIME MINISTER MEETS APCAC)
D. BANGKOK 1338 (NEW INTELLECTUAL PROPERTY STRATEGY)
E. BANGKOK 1203 (PATPONG RAID)
F. BANGKOK 379 (RIGHT MOVES ON IPR)
BANGKOK 00003272 001.2 OF 004
1. (SBU) SUMMARY: Earlier this month, the Ambassador met with a
group of key American intellectual property rights owners to discuss
their take on the current intellectual property milieu in Thailand.
The Ambassador emphasized that, with high-level Thai government
interest in intellectual property rights issues, now is the time for
the USG and US industry to help direct the Government's efforts
towards meaningful intellectual property reforms. Although
participants were pleased with Prime Minister Abhisit's strong
messages on intellectual property, these rights holders reported
limited progress on specific issues of most interest to them.
Company representatives applauded the government's "Creative
Thailand" initiative to expand the Thai economy into more
innovation-based sectors, but fear that the government's support to
this point is still too narrow to generate broad public support for
IPR. Nonetheless, representatives have been heartened by the recent
effort of Thailand's Department of Intellectual Property to reach
out to industry and hold regular interministerial meetings to
improve Thailand's intellectual property regime. The Ambassador also
plans to meet with rights holders more frequently to further
strategize how we can help improve the promotion and protection of
IPR in Thailand in support of the Thai authorities. Industry
representatives expressed appreciation for the high level embassy
engagement and the Ambassador's expressed interest on complex IPR
issues. END SUMMARY.
Strong Messages from the Thai Government
----------------------------------------
2. (SBU) The Ambassador met with a diverse group of intellectual
property rights owners doing business in Thailand on December 1.
Participants included representatives from the motion picture,
software, music, publishing, and pharmaceutical industries, as well
as law firms and investigators who represent American patent and
brand owners. Ambassador John asked the group to help the embassy
address their intellectual property concerns by providing
practicable suggestions the USG could propose to the Thai
government. Participants praised the accessibility of Deputy
Minister of Commerce Alongkorn Pornlaboot and Prime Minister Abhisit
on IP issues. They are pleased that intellectual property has been
placed on the national agenda.
3. (SBU) Participants praised the Abhisit Government for an
intellectual property reform effort in a series of legal amendments
currently under review by the government. Copyright industry
representatives explained that there are currently three sets of
copyright amendments in the pipeline, each being considered
separately. The first set of provisions would provide for landlord
liability for sales of infringing goods on their premises and
institute buyer liability for purchases of infringing products.
Industry praised these amendments, saying they could go a long way
towards ending piracy at certain "notorious markets" mentioned in
USTR's Special 301 Report. The second set of provisions would
implement certain obligations under the World Intellectual Property
Organization Copyright and Performances and Phonograms Treaties. An
industry representative serving on the Thai working group looking at
these amendments reported that the provisions have not changed
significantly since the 2004 meetings between USTR and the Thai
Government on the then-draft provisions. A third set of amendments
is intended to create a government-regulated collecting society to
administer rights in musical works and sound recordings. These
amendments have been very controversial, because they would require
a change of business practices for Thailand's two largest music
enterprises, RS and GMM Grammy.
4. (SBU) Although industry representatives are encouraged by these
developments, the Cabinet has not yet submitted any of the proposed
legislation to the Parliament for review. The rights holders
encouraged the Ambassador to keep pressure on the Abhisit
Administration to ensure that these amendments do not languish in
the legislative process.
Positive Moves on Enforcement
-----------------------------
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5. (SBU) A representative of the publishing industry noted that
Deputy Minister Alongkorn and Department of Intellectual Property
(DIP) Director General Pajchima Tanasanti were pushing the Royal
Thai Police and Department of Special Investigations to work with
industry closely in investigating the source of counterfeit
textbooks that had been found in the US market. (COMMENT: Pajchima's
recent appointment as DIP Director General was pushed by Deputy
Commerce Minister Alongkorn, during what we have been told was a
contentious reshuffle at the Ministry. Pajchima brings a
pro-enforcement reputation to the job. END COMMENT.) Software
industry representatives highlighted that the high-level attention
from the Thai government has led to greater cooperation by the
Economic Crimes Division (ECD) of the Royal Thai Police in
particular. These representatives praised the initiative of the ECD
Chief Commander Kowit, who signed and sent out thousands of letters
to corporate end-users, warning them to legitimize their software
use or face criminal action. The Business Software Alliance (BSA)
plans to follow through on the ECD letter campaign and start raiding
targets that have not legitimized software since receiving the
letters.
6. (SBU) One impediment to the software enforcement campaign has
been the difficulty of obtaining search warrants from the Central
Intellectual Property and International Trade Court. In early 2009,
the software industry met with the court and demonstrated that only
three percent of its requests for search warrants had been
successful in 2008. Based on that information, a particular group of
judges began to more regularly issue search warrants for
intellectual property cases, while others still refused to do so.
Software industry representatives told the Ambassador that they now
have a 30 to 40 percent success rate in obtaining warrants -- a
marked improvement -- but still face difficulties from some judges.
The difficulty of obtaining search warrants was a problem cited by
meeting participants as a significant impediment to intellectual
property enforcement. (NOTE: One software company filed a civil suit
against an infringer this year and was pleased that the court issued
Anton Piller orders (the right to search and seize evidence without
prior warning) permitting the plaintiffs to gather evidence against
the defendant. The court also awarded significant damages in the
case. This was the first significant successful civil infringement
case reported by US industry. END NOTE.)
Is IPR Enforcement Rising or Falling?
-------------------------------------
7. (SBU) Thai Government figures that show a rise in both quantity
and quality of enforcement actions (ref A). However, rights holders
in the music, motion picture, and pharmaceutical industries, as well
as several lawyers representing a broad array of foreign IP owners,
reported that from their perspective the number of IP enforcement
actions in 2009 has significantly declined from 2008. They explained
that because of the financial crisis and consequent limited
corporate resources, that rights owners have initiated fewer cases,
while in their experience Thai law enforcement authorities rarely
take the initiative to begin cases without prior rights owner
investigation. Therefore, the number of enforcement actions should
be lower in 2009. Moreover, rights owners say they carry the burden
of investigating a suspected infringer, obtaining sufficient
evidence for a search warrant, paying for a raid action, and
following up to be certain that the police hand the case over to a
prosecutor, making it less likely that Thai authorities are acting
on their own.
8. (SBU) For copyright owners, the legal environment is problematic.
Under Thai law, the "compoundable offense" provision in Section 66
of the Copyright Act allows copyright owners to settle criminal
cases out of court and requires the copyright owner to file a
complaint in order to initiate a law enforcement raid, and this is
the route that rights holders are encouraged to take. The copyright
industries believe that there are numerous other laws, including
trademark, labeling, and censorship laws that would permit law
enforcement to take action that would be more effective. The decline
in numbers of enforcement actions has not led to countervailing rise
in the quality of investigations, they believe. Other than one raid
against an optical media factory, there have been no significant
cases brought against major infringers. From industry's perspective,
the thousands of raids each year against small retail targets do not
have sufficient deterrent effect.
BANGKOK 00003272 003.2 OF 004
9. (SBU) Industry reps cited data to make their point. According to
data provided by the Court, nine people were jailed for IP-related
offenses in 2007, two in 2008, and five so far in 2009. Fines,
rather than jail sentences, are preferred by the courts as being
more appropriate for low-level street vendors. Local IP law firm
Tilleke and Gibbins provided statistics demonstrating that 94
percent of fines meted out by the Court are below 50,000 Baht
(approximately $1,500). The largest fine over the past year was
issued in a case involving the state-owned enterprise Thailand
Tobacco Monopoly. Industry reps also noted that the court will
rarely, if ever, grant preliminary injunctions against infringing
activities.
Prescriptions Still Pending for Pharmaceutical IP
--------------------------------------------- ----
10. (SBU) The fight against counterfeit drugs pits industry
interests against the concerns of others distrustful of industry.
While industry would like to bring public attention to the
prevalence of counterfeit medicines in the market, Thai law
prohibits advertising to consumers on drug-related matters. When the
pharmaceutical industry attempted to train officials on
anti-counterfeiting, health activist NGOs protested, claiming that
industry exaggerates the scope of counterfeiting in Thailand and is
trying to block generics rather than actual counterfeit medicines.
11. (SBU) During the meeting with the Ambassador, pharmaceutical
industry reps noted that their counterfeiting problems were
worsening in Thailand. Counterfeit drugs are readily available from
street vendors. The representatives would like the Thai authorities
to adopt a zero tolerance policy for counterfeit drugs and start
proactive enforcement, but the government is also dealing with other
forces who believe that any cooperation with pharmaceutical
companies will result in fewer, more expensive drugs available in
Thailand. The pharmaceutical industry and several Thai law
enforcement agencies signed an MOU to cooperate in tackling
counterfeit medicines in 2008, but the representatives present said
that the Food and Drug Administration of the Ministry of Public
Health still is not cooperating on the MOU, largely, they believe,
because of its position on generic drugs. Company representatives
reported that even though Thai IP laws do not require a
pharmaceutical rights holder to make a complaint in order to
investigate counterfeit drugs, enforcement authorities are reluctant
to take action unless industry brings a completed investigation to
them. When enforcement authorities do conduct a raid, they seize
only the counterfeit products, making it impossible to use records,
computers, or other evidence to investigate the source of the
product.
12. (SBU) On the legislative and administrative front, industry
representatives reported that Thailand does not provide
pharmaceutical test data exclusivity and that patenting drugs in
Thailand has been next to impossible. Although Thailand's Trade
Secrets Law created a trade secrets regime, the law only protects
the pharmaceutical companies' test dossiers from disclosure. To
facilitate wider availability of pharmaceuticals, the Thai FDA
regularly provides marketing approval to generic products based on
bioequivalence testing alone, thereby giving a significant cost
advantage to generic companies that did not invest in testing a
drug.
13. (SBU) Industry representatives explained that the need for data
exclusivity is in part due to the significant problems they face in
patenting their drugs in Thailand. (COMMENT: Over the past three
years, members of the Thai patent bar have been unable to provide
examples of any drug patent application that had been registered in
Thailand during that period. Law firms in Thailand generally advise
their clients that patent protection is unlikely. END COMMENT.) One
law firm provided data to show that although several drugs were
issued Thai patents in 2009, these patent applications had all been
pending for between ten and twenty years. In some cases, lawyers
reported that the patent applications had been fully examined and
approved but stagnated for several years because high-level DIP
officials would not sign the patent grant certificates. Industry
hopes that implementation of the Patent Cooperation Treaty, to which
Thailand recently acceded (ref A), will help overcome this
reluctance and speed patent processing.
14. (SBU) While appreciating the fact that there have been no new
BANGKOK 00003272 004.2 OF 004
compulsory licenses issued by the Abhisit government, the
pharmaceutical sector bemoaned their lack of dialogue with public
health authorities. The industry is especially concerned that NGO
and Ministry of Public Health activists continue to advocate for
greater public access to medicines, despite existing patent
protection. Thailand's National Health Assembly and its
subcommittees do not generally seek industry input on key issues
like patent reform, compulsory licensing, or pharmaceutical
marketing and sales practices. Industry is concerned with the
National Health Assembly's activist tendencies because the Prime
Minister serves as its chair, and there is little review of its
policy recommendations. Industry representatives also mentioned
growing concerns over nontransparent procurement processes for
medicines and the preferential treatment given to the Government
Pharmaceutical Organization, a state-owned enterprise manufacturing
generic products.
Moving Forward
--------------
15. (SBU) Ambassador John told participants that the current
relative political stability in Thailand makes this a key time for
the USG to help direct the Thai Government towards meaningful
intellectual property reform. Participants mentioned several times
that the Abhisit administration is very focused on improving their
placement on the Special 301 Priority Watch List. When one industry
enforcement representative compared the difficulty of working in
Thailand to his company's experience working in Vietnam, China,
Taiwan, and Korea, Ambassador John asked participants to describe
the key differences between the approaches taken by these
governments. Participants opined that only very strong political
will can change the environment for intellectual property owners in
developing countries. From their perspective, Thailand still lacks
the political will to create tangible results.
16. (SBU) Although industry representatives had hoped that the
Creative Thailand initiative might provide them with an opportunity
to partner with the Royal Thai Government in moving towards an
intellectual property-based economy, they now question how effective
the effort will be in broadening support for IPR in general.
Pharmaceutical industry representatives noted that scientific and
technological research and development are not considered part of
the creative economy. Unsurprisingly, DIP and Deputy Minister
Alongkorn are focused initially on the Thai film industry, as well
as areas such as traditional food and crafts and tourism, where
Thailand's economy is already reasonably strong.
17. (SBU) Nonetheless, the moment is ripe to engage further with
Thailand's Department of Intellectual Property which has reached out
to industry to hold regular interministerial meetings to improve
Thailand's intellectual property regime. The first meeting is
expected to be held in January. The Ambassador also plans to meet
with this group of rights holders more frequently to further
strategize how we can help improve the promotion and protection of
IPR in Thailand in support of the Thai authorities. Industry
representatives expressed appreciation for the high level embassy
engagement and the Ambassador's interest on complex IPR issues.
JOHN