US embassy cable - 05BRASILIA2599

UNCLAS SECTION 01 OF 03 BRASILIA 002599 
 
SIPDIS 
 
DEPT FOR EB/IPE SWILSON, AMADAMO AND WHA/BSC 
DEPT PLEASE PASS TO USTR LYANG AND MSANDLER 
DEPT PLEASE PASS TO USPTO FOR JURBAN 
USDOC FOR 3134/USFCS/OIO/WH/EOLSON 
USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD 
NSC FOR SCRONIN 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: KIPR, ETRD, IPR & Biotech 
SUBJECT: MPA RECOMMENDS TERMINATION OF BRAZIL'S GSP 
REVIEW, WITH CONDITIONS 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED - PLEASE 
PROTECT ACCORDINGLY. 
 
1. (SBU) Summary. According to a Business Software 
Alliance representative, the International Intellectual 
Property Alliance (IIPA) will likely communicate to USTR 
on Monday October 3 the action it recommends taking on 
Brazil's GSP Review.  In a written submission to IIPA, 
the Motion Picture Association (MPA) has recommended 
that Brazil's GSP review be terminated, conditioned on 
an understanding that the GoB will accomplish various 
copyright enforcement measures over the next six months. 
Topping MPA's wish list is a GoB commitment to perform 
raids in certain marketplaces twice a month.  According 
to MPA Vice President for Latin American Operations, 
Steve Solot, a significant clamp down on well-known 
marketplaces could lessen the importance MPA would place 
on the other sought after action items.  Based on a 
discussion with Sao Paulo Consul General September 21, 
representatives of the music, and business software 
industries appear generally to be on-board with this 
approach, although the BSA representative later 
cautioned against assuming IIPA's final position.  End 
Summary. 
 
2. (SBU) During an anti-piracy seminar in Brasilia on 
September 28, Andre de Almeida of BSA told Econoff that 
the International Intellectual Property Alliance (IIPA) 
plans to discuss formulation of its recommendation on 
Brazil's GSP Review with copyright industry 
representatives in Brazil via teleconference on 
September 29.  The IIPA review of Brazil's trade 
benefits under the Generalized System of Preferences 
(GSP) dates back to its 2001 petition in which it 
charged the GoB with ineffective protection of 
copyrights.  The review has been extended three times 
since June 2004; the current review period ends 
September 30 (reftel).  Almeida added that IIPA plans to 
send its recommendation to USTR on Monday, October 3. 
 
MPA Recommends Termination with Conditions 
 
3. (SBU) On September 22, Steve Solot, Senior Vice 
President of the Motion Picture Association's (MPA) 
Latin American Operations, shared with post a copy of 
MPA's recommendation to the IIPA regarding the GSP 
Review.  MPA has recommended that the Review be 
terminated, with the understanding the GoB would achieve 
six enforcement measures within the next six months; 
otherwise, MPA would urge copyright industries to resume 
action against Brazil.  Solot identified crackdowns in 
certain well-known pirate marketplaces as the most 
important action MPA is seeking.  The other five 
measures deal with 1) ensuring Brazilian customs 
provides pirated products with the same high-priority 
treatment as counterfeit products; 2) formulation of a 
strategy for centralizing imports of blank media; 3) 
dissemination of educational campaign materials; 4) 
urging inclusion of IPR courses within studies for 
prosecutors judges, and in police academies; and 5) 
stimulating creation of anti-piracy councils at state 
and municipal levels.  The substantive text of MPA's 
submission to IIPA is provided in para 9. 
 
4. (SBU) Solot confirmed for Econoff that MPA understands 
should the review be terminated, any "resumption" would 
entail industry filing a new petition.  Solot explained that 
termination seemed the best option for ensuring the current 
constructive relationship between the private sector and the 
GOB continues.  Nonetheless, he would hope the dialog 
surrounding a decision to terminate could be used to focus 
GoB attention on needed action in the marketplaces; 
significant progress in this area, he noted, would lessen 
the importance MPA would place on the other action items. 
While Solot acknowledged the progress the GoB has made in 
seizing large amounts of pirated products, particularly at 
the border with Paraguay, he argued that allowing small 
venders to sell undisturbed in the marketplaces sends a 
wrong signal to society-at-large. 
 
5. (SBU) In a conversation September 16, the Executive 
Secretary of the CNCP, Marcio Goncalves, told Econoff that 
 
SIPDIS 
increased action against sale of illicit products in 
marketplaces was in the works.  He explained that the 
Secretary for National Public Security (SENASP) had recently 
 
SIPDIS 
joined the CNCP and was tasked with mobilizing state and 
municipal level actions, including raids on local 
marketplaces; he noted that SENASP does not have direct 
authority over state and municipal level police forces, but 
holds substantial sway.  On September 19, SENASP announced 
that it was coordinating state police actions against 
piracy, beginning with operations in four states; press 
reports followed about crackdowns in a number of markets. 
 
6. (SBU) Looking at the additional actions being sought by 
MPA, Solot thought it should not be difficult to get 
Brazilian customs to issue explicit instructions to agents 
to give the same treatment for pirated products (copyright) 
as counterfeit products (trademark) (action 2).  He 
expressed some doubt about the practicality of a strategy to 
centralize all imports of blank media in a single port 
(action 3) and admitted that it was not an idea that had 
been presented previously to the CNCP and that MPA's 
recommendation included input "from a number of staff."  On 
action item 4, Solot said the ball was actually in the 
private sector's court - he understood that public sector 
funds had been set aside to fund an education campaign, but 
the CNCP was waiting for the private sector to develop the 
content.  The action item (5) that calls for CNCP to urge 
inclusion of IPR in the studies of prosecutors, judges, and 
police is already included in the CNCP's 99-point national 
action plan.  MPA's final action item for the GoB is to 
create state and municipal anti-piracy councils, more or 
less mirroring the national council.  Only Rio and Porto 
Alegre currently have such councils, although additional 
states have already moved to establish specialized 
departments within their police forces to combat piracy. 
Solot said creation of such councils typically depends 
heavily on private sector involvement and they would expect 
to play a large role in development of future councils. 
 
Where Do Other Copyright Industries Stand? 
 
7. (SBU) According to Solot, initially copyright industry 
representatives in film, music and business software had 
planned to formulate a joint recommendation for IIPA. 
However, Solot said BSA sent its own recommendation to IIPA 
the week of September 12, calling for an extension of the 
review.  Nonetheless, in a meeting with Sao Paulo Consul 
General on September 21, representatives from all three 
sectors seemed to support the general approach - termination 
with conditions.  All noted that the GoB reaction to another 
extension would be extremely negative, creating a 
potentially counterproductive environment. 
 
8. (U) Post will review GoB actions to date to combat piracy 
and provide input for Washington agencies' consideration 
septel. 
 
Text of MPA's Recommendation 
 
9. (SBU) "The MPA local recommendation is based not only 
on evaluation of specific enforcement efforts undertaken 
by the GOB, and specifically the National Anti-Piracy 
Council (CNCP), since its creation in late 2004, but 
also on political factors and the important role of 
MPA's local Anti-Piracy Program Manager as a private- 
sector member of that Council. 
 
The recommendation is also based on the successful 
enforcement activities undertaken in Brazil, achieved 
directly or indirectly due to the work of the CNCP, as 
documented in the monthly reports prepared by Carlos 
Alberto de Camargo. 
 
The MPA local recommendation is a result of evaluation 
by Carlos Alberto de Camargo, Marcio Goncalves and the 
undersigned, and has been approved by our MPAA DC 
office. 
 
The local MPA recommendation is an attempt to conciliate 
political and enforcement factors by recommending 
termination of the investigation with the understanding 
that the following 6 items (considered "deliverable") 
must be achieved within the next six months (by March 
30, 2006), or MPA will recommend resumption of the 
investigation and corresponding possible loss of 
benefits for Brazilian exports: 
 
1)  Maintain continued enforcement actions at least 
twice a month, based on recommendations from private 
sector, in each of the well-known pirate markets as 
follows: 
- Sao Paulo: Stand Center, 25 de Marco, Galeria Page, 
Santa Ifigenia, Lapa e Santo Amaro; 
- Rio de Janeiro: Uruguaiana 
- Brasilia: Feira do Paraguay 
- Pernambuco: Feira de Caruaru 
- Campinas: Camelodromo. 
 
2)  Provide specific instructions from the CNCP to 
customs authorities on the Paraguay border to ensure 
that commercialization of pirate products receive the 
same high-priority treatment as contraband of 
cigarettes, arms and drugs. 
 
3)  In conjunction with private-sector representatives, 
CNCP to design a strategy to centralize all imports of 
blank media such as CDR and DVDR in a single port of 
entry, such as Santos. 
 
4)  CNCP to ensure that educational campaigns developed 
in conjunction with the private-sector are disseminated 
as public service announcements by television networks 
and other media. 
 
5)  CNCP to urge the inclusion of intellectual property 
rights and piracy as mandatory subjects of study for 
prosecutors, judges and in police academies. 
 
6)  CNCP to stimulate the creation of state and 
municipal anti-piracy councils in priority capitals and 
states of Sao Paulo, Rio de Janeiro, Minas Gerais, 
Bahia, Distrito Federal, Pernambuco, Rio Grande do Sul 
and Parana (Municipalities - Sao Paulo, Rio de Janeiro, 
Belo Horizonte, Salvador, Fortaleza, Belem, Campinas, 
Ribeirao Preto) with a minimum of three such State 
council and three municipal councils initiated by end- 
2005, based on models currently in existence in Rio 
Grande do Sul." 
 
CHICOLA