US embassy cable - 04TEGUCIGALPA405

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000405 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EB/IPC:SWilson 
DEPT PLEASE PASS TO USTR FOR BPeck 
DEPT PLEASE PASS TO DOC FOR KSchlegelmilch 
DEPT PLEASE PASS TO USPTO FOR JUrban/DLashley-Johnson 
DEPT PLEASE PASS TO LOC FOR STepp 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, KIPR, HO 
SUBJECT: HONDURAS: INPUT FOR 2004 SPECIAL 301 REVIEW 
 
REF: A) STATE 29551  B) STATE 38126 
 
1. (SBU) Summary and Comment: Honduran legislation regarding 
Intellectual Property Rights (IPR) is largely in compliance with 
the WTO Agreement on Trade Related Aspects of Intellectual 
Property Rights (TRIPs).  However, Honduran authorities lack the 
personnel and expertise necessary to wage a truly effective 
campaign against copyright or other IPR violations.  There have 
been no significant moves in the past year by the Government of 
Honduras (GOH) to either strengthen or weaken the protection of 
IPR in Honduras.  Embassy therefore recommends that Honduras 
remain off the Special 301 watch list.  End Summary and Comment. 
 
2. (U) The responses below are keyed to paragraph 17 of Ref A. 
 
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A) Optical Media Piracy (CDs, VCDs, DVDs) 
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3. (U) Although Honduras has yet to experience large-scale in- 
country optical pirating, pirated goods are imported from 
neighboring countries, and the piracy of books, sound and video 
recordings, compact discs and computer software is still 
widespread.  Confiscation has been erratic, and usually involves 
minor seizures of compact discs.  Success in controlling optical 
piracy rests primarily on the GOH's ability to effectively 
implement its current laws, rather than a need for further 
legislation. 
 
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B) Use/Procurement of Government Software 
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4. (U) The number of government agencies which are using legally 
licensed software increased during 2003, largely due to private 
sector efforts to persuade government entities to obtain legal 
license to the software that they were already using.  Several 
government agencies continue to use illegally-procured software, 
or to use multiple copies based on a single legal purchase, 
primarily due to stringent budget constraints.  U.S. software 
companies, working closely with Honduran authorities and the U.S. 
Embassy, hope to whittle down the number of non-compliant 
ministries in the coming months. 
 
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C) TRIPs Compliance and Other IP-Related Issues 
--------------------------------------------- -- 
 
5. (U) No new TRIPs-related legislation was introduced or passed 
by the Honduran Congress in 2003, nor were any amendments to 
existing legislation introduced or passed. 
 
6. (U) Honduras largely complied with the WTO Agreement on Trade 
Related Aspects of Intellectual Property Rights (TRIPs) by the 
January 1, 2000, deadline.  In 1999, the Honduran Congress passed 
two laws to correct deficiencies in previous legislation 
concerning copyrights, patents and trademarks.  The Copyright Law 
added more than 20 different criminal offenses related to 
copyright infringement and establishes fines and suspension of 
services that can be levied against offenders.  The Law of 
Industrial Property, Decree 12-99E, covers both trademarks and 
patents, and includes modifications on patent protection for 
pharmaceuticals, extending the term from seventeen to twenty 
years to meet international standards.  The term for cancellation 
of a trademark for lack of use was extended from one year to 
three years.  To be protected under Honduran law, patents and 
trademarks must be registered with the Ministry of Industry and 
Trade. 
 
7. (U) As soon as two new laws governing the designs of 
integrated circuits and plant variety protection are approved by 
the National Congress, Honduras will be in complete compliance 
with the TRIPs Agreement.  Post has emphasized the importance of 
adoption of these two laws to the Minister of Industry and Trade 
and the Director of the IPR Office within that Ministry.  GOH 
officials assert that the two laws will be passed during 2004. 
 
8. (U) Honduras became a member of the World Intellectual 
Property Organization (WIPO) in 1983, ratified the Paris 
Convention for the Protection of Industrial Property in 1994, and 
became party to both the WIPO Copyright Treaty and the WIPO 
Performances and Phonograms Treaty in 2002.  Honduras and the 
U.S. initialed a Bilateral Intellectual Property Rights (IPR) 
Agreement in March 1999, but substantive issues arose during the 
language conformity process.  Instead, recent efforts to push the 
GOH for additional IPR commitments have been pursued as part of 
the negotiations for a U.S.-Central America Free Trade Agreement 
(CAFTA).  If ratified, CAFTA should significantly improve the 
level of IPR protection in the region.  Approval of CAFTA by the 
Honduran Congress in 2004 is considered very likely. 
 
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D) Enforcement 
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9. (U) Honduran Copyright Law specifies three different avenues 
in the prosecution of copyright infringement cases: 
administrative, civil and criminal.  After confiscating pirated 
goods, the GOH can file an administrative case that may result in 
a fine.  However, the law requires companies whose rights have 
been violated to file civil and criminal charges.  Few U.S. 
companies have asserted their right to file either a civil or 
criminal case, leaving the resource-strapped prosecutor's office 
(Ministerio Publico) responsible for the lawsuits.  As a result, 
many cases are not tried to the full extent of the law. 
 
10. (U) Enforcement of the copyright law relies largely on 
periodic sweeps in the market and on investigations carried out 
after an accusation has been made.  The GOH Customs and Tax 
Authority (DEI) is responsible for impeding the flow of illegal 
goods into Honduras.  IPR officials have commented in the past 
that police and DEI officials lack the skills and resources to 
identify and control the flow of pirated products. 
 
11. (U) The protection of data exclusivity by the GOH is an issue 
that has been raised by some U.S. companies.  In 2002, a U.S. 
pharmaceutical company complained that the Ministry of Health, in 
approving a competing company's pharmaceutical product, did not 
respect their data exclusivity rights as guaranteed under article 
39 of the WTO TRIPs agreement and article 77 of Honduras' 
Industrial Property Law.  (Honduran law provides five-year 
exclusive use of data provided in support of registering 
pharmaceutical products.)  The Ministry of Health approved the 
competing pharmaceutical product despite communication from 
Honduras' IPR Division that the U.S. company's research and data 
were protected under Honduran law.  The U.S. company argues that 
in order for the competing product to be legally registered with 
the Ministry of Health, the company needs to provide the research 
and data to support their application.  When a similar situation 
arose with a separate application in 2003, the Ministry of Health 
recognized that the competing company's product was a copy of the 
U.S. company's protected product, and did not approve the 
competing company's application. 
 
12. (U) Some U.S. companies have expressed concern that attempts 
to prosecute computer software infringement cases have been met 
with inadequate support by officials in the Ministry of Industry 
and Trade's IPR Division and the Attorney General's office. 
 
13. (U) The Ministry of Industry and Trade makes good faith 
efforts to respond to complaints about satellite piracy, and the 
telecom regulatory agency, CONATEL, checks closely on compliance 
with anti-piracy rules before extending cable TV licenses. 
However, the ministries need more staff to ensure full 
enforcement.  In 2003, the Embassy received a complaint from one 
U.S. company which argued that the Ministry of Industry and 
Trade's IPR Division appeared to be singling out the U.S. company 
for investigations of satellite piracy, while ignoring alleged 
violations on the part of the U.S. company's Honduran rival. 
Embassy officials have discussed the issue with appropriate 
Ministry and IPR officials, urging a strong and balanced approach 
to investigations of all IPR violations. 
 
Palmer