Reference ID: 08MEXICO1533

Created: 2008-05-20 20:57

Released: 2011-08-30 01:44


Origin: Embassy Mexico



DE RUEHME #1533/01 1412057


P 202057Z MAY 08





















E.O. 12958: N/A




Summary and Comment


1. (U) This cable reports on Mexican reaction to the Special

301 2008 report on Mexico and the following recent

IPR-related developments in Mexico: the "International Forum

on IPR and the Judiciary" event held in Cancun in February

and the establishment of a specialized IPR tribunal to review

administrative rulings; lobbying efforts for a bill to

provide ex oficio authority to go after pirates; recent

criminal IPR verdicts of interest; government initiatives on

IPR education and cooperation with various industries;

enhanced coordination with Mexican customs; and ongoing

efforts by the State of Mexico and Mexico City to combat

illicit commerce. Piracy and counterfeiting continue to

occur on epic scales here in Mexico, but the federal

government, some of its local counterparts, and the private

sector are clearly devoting more time and attention to

creative and coordinated efforts to strengthen IPR

protection, generating hope that better days lie ahead for

right-holders and their industries. End summary and comment.

Reaction to Special 301


2. (U) Econoff spoke with three key Mexican officials

regarding the 2008 Special 301 report on Mexico (REF A).

They were 1) Jorge Amigo, Director General of the Mexican

Institute of Industrial Property (IMPI - rough equivalent of

the U.S. PTO), 2) Alfredo Tourne, Director for Rights

Protection of the Mexican Copyright Institute (INDAUTOR -

rough equivalent of the U.S. Copyright Office), Jose Luis

Cervantes, chief of the specialized IPR unit of the Office of

the Attorney General of the Republic (PGR - rough equivalent

of the U.S. Justice Department). All three acknowledged the

problem areas identified in the report and committed to

taking concrete action to address them before the 2009

Special 301 drafting process begins. In particular, INDAUTOR

plans to review whether Mexican law is in full compliance

with Mexican obligations under the WIPO Internet treaties,

IMPI plans to work in closer coordination with health

authorities on IP issues related to the pharmaceutical

industry, and PGR intends to continue its focus on higher

quality prosecutions that result in deterrent convictions.

Judicial IPR Forum and Specialized Tribunal


3. (U) The Mexican Federal Judiciary, IMPI, INDAUTOR, a group

of private sector representatives, and the U.S. Embassy

organized the International Forum on the Judiciary and IPR

that was held in Cancun February 26-29. Around two hundred

judges, IPR officials, and attorneys from Mexico, the rest of

Latin America, Europe, and the World Intellectual Property

Organization participated in the forum, as did U.S. federal

judges Ronald Lew and Bernice Donald, Wayne Paugh from DoC,

Oliver Metzger of the U.S. Copyright Office, Marie-Flore

Kouame from DoJ, U.S. PTO's John Rodriguez and Jeff Siew, and

Embassy Econoffs. The Forum was kicked off by Mexican Deputy

Attorney General Felipe Munoz, Governor Felix Gonzalez of the

State of Quintana Roo (of which Cancun is the largest city),

and Jorge Camero, the President of Mexico's College of

Federal Judges. U.S. participants were speakers on the

following five of the twelve panel discussions on the

program: 1) pharmaceutical issues; 2) geographical

indicators; 3) IPR on the Internet; 4) enforcement and

precautionary measures; and 5) penalties/damages for IPR

infringement. There were several non-Mexicans included on

each panel, and the audience (which included a large number

of Mexican corporate lawyers) used the Q&A sessions to draw

attention to areas where Mexico's IPR regime fell short of

international standards. Several Mexican judges who spoke on

various panels were also quick to highlight shortcomings of

their domestic administrative and criminal IPR regimes. The

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Forum was an excellent mechanism for raising the IPR

awareness of the Mexican judges in attendance, and the

importance of IPR was further highlighted by the fact that

Guillermo Ortiz, President of Mexico's Supreme Court,

attended and spoke at the closing ceremony. Embassy is

working with the other Forum organizers to make electronic

copies of all the presentations and distribute them to the

entire federal judiciary of Mexico.

4. (U) Supreme Court President Ortiz made news at the closing

ceremony by announcing that the Federal Tribunal of Fiscal

and Administrative Justice would be forming a specialized IPR

court to handle appeals of administrative rulings made by

IMPI. Accordingly, several weeks after the Cancun Forum,

Mexico's Diario Oficial (functional equivalent of the Federal

Register) published a judicial resolution declaring that such

a court will indeed be established, and that it will have

jurisdiction over all administrative IPR appeals in Mexico.

The court will consist of three federal administrative/fiscal

judges with expertise in IPR who have yet to be named --

private sector representatives are understandably anxious

that the judges chosen favor strong IPR protection. Its

operating procedures also remain to be determined --

right-holder reps are hoping they will be designed in such a

way as to help reduce the excessive amounts of time it takes

to reach final resolution of contested administrative cases,

most of which are currently appealed to the circuit court

level of the administrative/fiscal system and spend years in

litigation. One lawyer who represents U.S. firms told

econoff that the ideal solution would be to add another

specialized court at the appeals level, though that proposal

is not currently on the table.

5. (SBU) There is a bill that was passed by the Chamber of

Deputies last year that remains pending with the Senate that,

if passed into law, would nullify the formation of the

specialized IPR court by removing all administrative cases

originating with IMPI from the jurisdiction of the Federal

Administrative Procedure Law and thus the Federal Tribunal of

Fiscal and Administrative Justice, under which the

specialized IPR court would operate. If this bill were to be

passed, appeals of IMPI rulings could only be made before

constitutional courts, which differ from Mexico's

administrative/fiscal courts in two key ways: 1)

constitutional courts can deny requests to hear such appeals,

and 2) constitutional courts cannot over-rule the substance

of IMPI decisions. They can only rule on whether a defendant

was treated fairly and in accordance with proper procedures.

Such a system would clearly strengthen IMPI and thus the

executive branch vis-a-vis the judiciary with regard to

administrative enforcement, though a specialized

administrative/fiscal court made up of judges who understand

the value of IPR protection would also be a clear improvement

over the status quo. Industry is close to unanimous that

either of these two options would be an improvement over the

status quo but is not taking sides publicly over which one is

preferable. The make-up of the new court and its operating

procedures will clearly be the decisive factors in either

winning over right-holders or driving them to lobby for

passage of the bill to remove IMPI from the jurisdiction of

the Federal Tribunal of Fiscal and Administrative Justice.

Lower Chamber Passes Ex Oficio - Internet Piracy Conviction

--------------------------------------------- --------------

6. (U) Under Mexican law, criminal law enforcement

authorities can only pursue pirates and counterfeiters if

they received a formal right-holder complaint. Previous

efforts to amend the law to provide ex oficio authority have

stalled due to conflicting views in the Senate and the

Chamber of Deputies regarding the bill's scope, with the

Senate opposed to criminalizing consumer purchases of

infringing goods and the Chamber of Deputies wishing to

eliminate specific penalties on complicit public officials.

The Embassy, the music and movie industries (which recently

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combined their enforcement efforts under the aegis of the

newly formed APCM, or Protective Association for Movies and

Music of Mexico), and the American Chamber of Commerce

proposed a clean version of the ex oficio bill and persuaded

the Chamber of Deputies' Justice Committee to push the bill

through to a vote before the end of the April legislative

session. Two deputies, including Antonio Diaz-Athie, who

participated in the legislators' IPR Voluntary Visitor

program to Washington that Post organized in February, agreed

to sponsor the bill, and it was passed by the Chamber of

Deputies on April 29, sending it back to the Senate for what

will hopefully be final approval before the end of the year.

The bill is not perfect, but its passage would undoubtedly

strengthen the PGR's hand in taking on organized criminal


7. (U) Through May 16 of this year, PGR had recorded 70

indictments and five convictions for IPR crimes (versus 166

indictments and five convictions for all 2007). Two cases

worth special attention were the conviction and sentencing to

six years in prison of a man who had been selling movies

on-line and the acquittal of multiple defendants who had been

charged with selling counterfeit medicines that had resulted

in the deaths of two children.

Reaching Out to Kids


8. (U) INDAUTOR reports that its proposal to include IPR

awareness materials in primary school civics textbooks has

been approved by the Secretariat of Public Education (SEP),

but predicts that such materials will not be ready until the

2009-2010 school year at earliest, due in part to INDAUTOR's

skimpy budget and fairly complicated clearance process within

the SEP bureaucracy for any changes to textbooks. In the

meantime, INDAUTOR is considering adapting certain WIPO

materials for use in comic books or brochures that can be

distributed in public schools. The State of Mexico, the

country's largest by population and the only state to have

formally signed an anti-piracy agreement with the private

sector and federal government, plans to disseminate a comic

book called "Pirate Town" that was developed by a state

university. IMPI plans to coordinate with the State of

Mexico on this project and perhaps expand it to other states.

Agreement on Clean Schools


9. (U) On March 28, the Mexican Book Publishers Association

(CEMPRO) signed an agreement with IMPI and the American

Chamber of Commerce called "Clean Schools" under which IMPI

has committed to conduct inspection visits on copy centers

located close to schools and universities in an effort to

dissuade the illegal copying of textbooks. This program is

similar to the agreement IMPI has with the Mexican music and

movie industries under which it conducts inspection visits to

cyber cafes in Mexico City. IMPI inspection visits do not

result in fines or other sorts of administrative sanctions

versus infringers, though IMPI can begin punitive proceedings

once an inspection visit has uncovered unlawful activity.

Both the copy-shop and cyber cafe initiatives are currently

targeted more at raising awareness and promoting compliance

rather than actually punishing violators, an approach that

the book, movie and music industries seem content with, at

least for now.

Enhanced Customs Cooperation


10. (U) Over the past year and a half we have witnessed

significant improvement in interagency cooperation on IPR

enforcement that has led to numerous success stories, such as

seizures of infringing goods at the Port of Lazaro Cardenas

resulting in both criminal and administrative investigations.

We have heard from numerous official contacts that the

MEXICO 00001533 004 OF 004

participation of multiple agencies in raids and seizures also

reduces the opportunity for corruption by making it harder

for a single official or office to make "deals" with pirates

without arousing the suspicion of other agencies involved in

the case. IMPI and Mexican Customs have recently begun

acting on an initiative to share expeditiously information on

suspicious in-bound shipments of goods bearing the 20 most

commonly counterfeited brand-names (e.g., NIKE, Louis Vutton,

Tommy Hilfiger). IMPI claims it already has one success

story under this new cooperative initiative.

Status of State and Municipal Efforts


11. (U) Through the beginning of 2008 the State of Mexico and

the Municipality of Toluca registered significant progress

under their respective anti-piracy agreements with the

federal government and the private sector. On public

education, an anti-piracy comic book has been developed for

distribution to school children, and seminars have been held

at state universities explaining the importance of IPR to the

creation of quality jobs. The State of Mexico is also

working on a study of the informal economy in the state,

which will include a directory of vendors and prices. State

and municipal police have worked with federal authorities to

close down Toluca's largest black market, Juarez, in part

guided by an organized crime map put together by the state

law enforcement agency. Authorities and participating

private sector groups are working to license the Juarez

vendors, move them to legal venues, and supply them with

legitimate products that will appeal to their clientele.

Momentum was slowed in the first months of this year due to

changes in key leadership positions in the state law

enforcement and interior departments, but econoffs and IMPI

officials met with the state-wide coordinating official in

April to discuss several concrete areas for renewed

collaborative efforts, including a campaign to ensure that

all state government offices are using legitimate business

software. Draft anti-piracy agreements with the states of

Morelos, Tlaxcala, Puebla, and Hidalgo are in one phase or

another of negotiation. Up until now, a coalition of

industries has taken the lead in these state-level

negotiations, but PGR, which has the interagency lead in

federal anti-piracy efforts, has now decided to spearhead

these efforts in close collaboration with the private sector.

12. (U) In Mexico City, the administration of Mayor Marcelo

Ebrard continues to expend substantial efforts in

re-converting the informal vendors who used to rule the

streets of the city's historic center. In April, city law

enforcement forces had several confrontations with black

marketeers who resisted attempts to move them. There have

been newspaper reports that pressure on illegal commerce in

downtown Mexico City has forced some pirates and

counterfeiters to re-locate either to other parts of the

capital or nearby cities such as Puebla. However, Ebrard's

police forces have begun to conduct raids in other parts of

Mexico City in close coordination with federal enforcement

agencies, inlcuding the PGR. In addition to the raids, the

government continues to expropriate real estate and others

assets used by those engaged in all forms of illegal

commerce. The Mexico City police's intelligence efforts are

improving and have led to investigations of five of the most

important bands of contraband/piracy/drug distributors in the

capital. The long-term goal of the Ebrard administration is

to "re-convert" informal vendors into licensed, legal

merchants operating out of authorized locations where the

government can supervise their activities.

Visit Mexico City's Classified Web Site at and the North American

Partnership Blog at /