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09.11.11

Cablegate: US Embassy Recommends That Argentina is Put on Monopolists’ Watch List, Free Software Adoption Noted

Posted in America, Cablegate at 2:36 am by Dr. Roy Schestowitz

Cablegate

Summary: A multi-year attempt to change Argentina through surrender to so-called ‘IPR’ monopolies (not Free software) and the role of a “watch list” (like sex offenders registry)

THE GOVERNMENT of Argentina (GOA) is under attack. Colonists from up north are adamant and determined to change Argentinian law not into something that benefits the population but something that benefits corporations. Argentinian corporations? Of course not. It’s about multinationals. The following cables are good demonstration of a lobby for so-called “IPR”, which is this case is clearly broken down into Patents, Copyrights, and Trademarks.

For those who are just joining us, the other day we covered the United States stating that “42 percent of Argentine firms use Linux on at least some of their computers,” which was the cause of some concern in a “sensitive” cable. Today’s 2006 Cablegate cable helps show another bit of concern about Argentines using copyleft software, which weakens the agenda of copyright maximalists. And for those who wish to know more about Argentina, also see:

In the following cables, watch how US diplomats based in Argentina are trying to pressure Argentina to be more like the US, with patent monopolies and everything. There is lobbying by big pharmaceutical companies that also fund this type of colonisation (yes, funding change of the law overseas). “Argentina amended its patent law (Law 24,481) in December 2003,” it says, “to implement an agreement between the USG and the GOA that had been signed in May 2002.”

A pattern we see in those cables is that they put monopolies before life, knowingly jeopardising the lives of many ill people just so that they can secure the profits of American companies. The tactics are damning to US politics/foreign affairs and also damning to Monsanto with its food embargoes. To quote ¶16, “Argentine farmers have the right to replant — although not to sell — seed generated from a harvest originating from registered seeds without paying royalties. However, Argentine farmers continue to sell “brown bag” seed (as opposed to bags of seed showing brand names) as brand-name product. This is a widespread problem with soybean seed, and it underlies Monsanto’s recent court actions in Europe, which have resulted in ships carrying Argentine soy being stopped and the cargo seized. Monsanto’s actions are aimed at collecting royalties that Argentine farmers are not paying via legal challenges in countries in which Monsanto has patent protection for the Roundup Ready soybean technology.”

And here is something from the Comment and Recommendation section: “the Argentine legal system remains an uncertain ally in the fight to protect intellectual property.”

Free software is mentioned in there too (¶13). To quote: “Use/Procurement of Government Software: The GOA has yet to fully comply with its 1999 agreement with the local software industry to legalize unlicensed software used in offices of the national government, and many GOA offices continue to use pirated software. Ministry of Interior Director of Information Management Eduardo Thill told a local news outlet in January 2005 that 90 percent of GOA agencies employing licensed software are using it illegally. There is a GOA move toward open source software, according to Thill, but there has been no legislation to date to bind the GOA to open source software solutions. That situation held true throughout 2005, although a representative of Thill’s office told the Embassy February 2006 that the percentage of GOA agencies using licensed software illegally had fallen to between 80 and 85 percent.”

They are blending FOSS and “pirated software” again.

The full text follows:


VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0406/01 0482043
ZNR UUUUU ZZH
R 172043Z FEB 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3529
INFO RUEHAC/AMEMBASSY ASUNCION 5344
RUEHBR/AMEMBASSY BRASILIA 5128
RUEHLP/AMEMBASSY LA PAZ FEB MONTEVIDEO 5320
RUEHSG/AMEMBASSY SANTIAGO 4944
RUEHRI/AMCONSUL RIO DE JANEIRO 1875
RUEHSO/AMCONSUL SAO PAULO 2769

UNCLAS BUENOS AIRES 000406 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EB/IPE CLACROSSE AND ANNA MARIA ADAMO 
DEPT PLS PASS TO USTR JCHOE-GROVES 
DOC FOR JBOGER, PLEASE PASS TO USPTO JURBAN AND LOC STEPP 
 
E.O. 12958: N/A 
TAGS: KIPR [Intellectual Property Rights], ETRD
[Foreign Trade], ECON [Economic Conditions], AR [Argentina] 
SUBJECT: ARGENTINA'S 2006 SPECIAL 301 REVIEW 
 
REF: A. STATE 014937 
 
     B. 05 BUENOS AIRES 01566 
     C. 05 BUENOS AIRES 01047 
 
------- 
Summary 
------- 
 
¶1.  Argentine entities responsible for upholding IPR failed 
to translate the momentum from a strong 2004 into tangible 
successes in 2005.  U.S. pharmaceutical companies are still 
waiting for commercially valuable patents; CD and DVD piracy 
rates appear to be rising, despite Argentina's economic 
recovery; and a piece of draft legislation that would have 
bolstered the protection of trademarked goods died in 
committee during the year.  The Embassy therefore recommends 
that Argentina remain on the Special 301 Priority Watch List 
until it can begin to point to concrete results across the 
IPR gamut and, more specifically, until it ensures effective 
protection of confidential and proprietary data developed by 
pharmaceutical companies.  End Summary. 
 
------- 
Patents 
------- 
 
¶2.  Argentina's patent and trademark agency, The National 
Institute of Industrial Property (INPI), made significant 
progress toward streamlining Argentina's patent system over 
the past several years.  That system appeared close to 
breakdown until 2002, with patent applications coming in much 
more quickly than they could be processed.  From 1995 until 
2002, for example, the INPI received 47,573 patent 
applications but was able to resolve only 28,190 of those in 
the queue, for a deficit of over 19,000 applications in those 
eight years alone.  That situation has now turned around, 
with the INPI receiving 14,106 patent applications during 
2003-2005 and resolving 18,334 during the same period. 
Additionally, the rate at which the number of applications 
resolved exceeds the number of applications received is 
increasing. 
 
¶3.  INPI's improved efficiency stems from a number of reforms 
that began to be introduced in 2003.  The INPI, via a series 
of resolutions, implemented fast-track procedures to reduce 
what had grown to be a large patent application backlog of 
over 30,000 cases.  Specifically, all persons or companies 
having more than one patent application pending were given 
the opportunity to rank-order their applications, allowing 
them to jump the application of a potentially more-valuable 
product ahead of a less-promising application that had been 
submitted at an earlier date.  U.S. and other research-based 
pharmaceutical companies are also now authorized to present 
studies used in other patent-granting countries to support 
patent requests in Argentina, significantly easing the INPI's 
investigation requirements. 
 
¶4.  The GOA also increased the INPI's budget by 11 percent in 
2004, and kept those gains during 2005.  The extra money 
allowed the hiring of 27 new patent examiners, 10 of them in 
the key pharmaceutical area.  That initiative doubled the 
total number of pharmaceutical examiners to 20.  The INPI has 
instituted a system of in-house training that an INPI 
executive told Econoff has increased the examiners' 
efficiency by up to 30 percent.  One result has been a 
reduction in the time it takes a patent application to 
receive a preliminary examination from fifteen months to 
eleven months.  In another positive development, the INPI 
sent two of its pharmaceutical inspectors to the U.S. Patent 
and Trademark Office's (USPTO) academy for training in 2005. 
That training, arranged by the Embassy and jointly funded by 
the USPTO and research-based pharmaceutical companies, was a 
first for Argentine patent inspectors.  The Embassy also 
arranged for an Argentine appeals court judge specializing in 
IPR cases to attend USPTO training, another first. 
 
¶5. The gains mentioned above, while undeniably positive, 
proceed from a very low baseline.  The right to patent 
pharmaceutical products in Argentina was recognized only in 
1996, and the first pharmaceutical patents were issued 
following the expiration of the TRIPS transition period in 
October 2000.  Even those patents were for approximately 80 
products of marginal commercial value.  A small number of 
other pharmaceutical patents of greater value were granted in 
subsequent years, but only after long and arduous processes. 
Many of the patent applications the INPI counted as 
"resolved" during 2005 were simply discarded after the 
applicant failed to respond to an INPI instruction to 
formally reaffirm the application. 
 
¶6.  The lack of patents for many products, coupled with 
Argentina's devaluation in 2002, which resulted in sharp 
price increases for imported products, increased incentives 
for local pharmaceutical companies to produce unlicensed 
copies of products that had been patented or for which 
patents were pending.  The combination of these factors has 
had a negative effect on the Argentina-derived business of 
U.S.-based pharmaceutical companies.  According to CAEMe, the 
Argentine association that represents U.S. and other 
research-based pharmaceutical companies, local pharmaceutical 
firms now have over 50 percent of the Argentine market and 
have reached almost 50 percent of the export market. 
 
¶7.  Argentina amended its patent law (Law 24,481) in December 
2003 to implement an agreement between the USG and the GOA 
that had been signed in May 2002.  That agreement came after 
approximately three years of consultations under the WTO's 
dispute settlement mechanism.  In a related development, the 
U.S. agreed to give consideration to an Argentine request to 
add specific products to the U.S. Generalized System of 
Preferences (GSP) that allows for duty-free entry into the 
U.S.  The remaining unresolved pharmaceutical patent issue 
relates to the effective legal protection of confidential and 
proprietary data developed by pharmaceutical companies to 
demonstrate the efficacy and safety of new medicines.  U.S. 
and other research-based pharmaceutical companies believe 
this to be a critical issue and Argentina and the U.S. have 
agreed to leave this issue within the WTO dispute settlement 
mechanism for future action.  (Note: The absence of data 
protection has lead research-based pharmaceutical companies 
to complain that Argentine health regulatory authorities 
(ANMAT) rely inappropriately on data supplied by 
research-based companies to approve unauthorized copies of 
innovative medicines.  According to CAEMe, ANMAT interprets 
the public disclosure of partial data as an indicator that 
the data should be regarded as in the public domain.) 
 
¶8.  U.S. pharmaceutical companies also remain concerned about 
the legal implications of two specific clauses in the 2003 
agreement.  Specifically, the amendment mandates an expert 
opinion that can challenge the validity of a patent, and 
requires consideration of the economic impact of an 
injunction on both parties before the seizure of goods 
alleged to violate the patent law.  Since the agreement was 
signed, research-based pharmaceutical companies have feared 
that those clauses could preclude the granting of preliminary 
injunctive relief and limit the success they have achieved in 
protecting their products through the use of preliminary 
injunctions. 
 
¶9.  2005 was the first year during which those fears were 
realized.  A U.S.-based pharmaceutical company discovered 
several competitors trying to sell copies of its most 
profitable drug, and sought injunctions to prevent those 
sales.  In one case, the issuance of an injunction was 
delayed for months, and in another the application for an 
injunction was rejected by a judge swayed by a local expert 
hired by the defense, who claimed that the copycat drug did 
not violate the U.S. pharmaceutical company's patent.  In 
another instance, a different U.S.-based pharmaceutical 
company went to court to remove five copies of one of its 
joint-venture drugs from the Argentine market.  In a 
promising ruling, the judge issued injunctions ordering the 
copies off the market (Reftel B).  More than six months after 
the decision, however, those injunctions have yet to be 
enforced. 
 
¶10.  A frequent complaint of U.S. pharmaceutical companies is 
that there remains in Argentina no regulatory linkage between 
the INPI and the ANMAT.  While such linkage is not required 
by TRIPS, its absence in Argentina allows ANMAT to grant 
local pharmaceutical producers authorization to manufacture 
and sell products that have already been patented or for 
which a patent has been requested.  The Embassy and 
multinational pharmaceutical companies have urged the GOA to 
establish a linkage between ANMAT and INPI that would prevent 
ANMAT from continuing to authorize local pharmaceuticals to 
produce products for which an INPI patent has been granted or 
is pending.  There were hints during 2005 of the beginnings 
of a cooperative relationship between INPI and ANMAT (Reftel 
C), but the Embassy has no evidence that such cooperation has 
developed.  As things stand, U.S. and other research-based 
pharmaceutical companies must incur the legal costs of 
obtaining injunctions to stop the production and sale of 
products produced by local pharmaceutical companies for which 
the research-based companies have INPI patents. 
 
¶11.  Law 25,649 adopted in 2002 requires medical doctors to 
use a drug's generic name in all prescriptions.  It is 
believed that this law diverts sales from innovative 
medicines to TRIPS-infringing copy products.  U.S. and other 
research-based pharmaceutical companies say that true 
generics do not exist in Argentina because copy products are 
not required to demonstrate their bioequivalence or 
bioavailability with original products, meaning local 
producers can sell drug copies that lack quality and safety 
assurances.  According to Law 25,649, doctors may also 
include a trademarked version of a drug in their 
prescriptions, but pharmacists may still offer a substitute. 
According to Law 25,649, reasons must be indicated on a 
prescription if a medical doctor does not want the 
prescription substituted by a pharmacist.  Another area of 
concern is that Argentina has yet to become a contracting 
state to the World Intellectual Property Organization's 
(WIPO) Patent Cooperation Treaty. 
 
---------- 
Copyrights 
---------- 
 
¶12.  Optical Media Piracy: The incidence of CD and DVD piracy 
in Argentina does not appear to have declined in 2005. 
Problems in this area include the widespread and open sale of 
pirated copies of albums and videos and an apparently 
increasing number of businesses that offer home delivery of 
pirated artistic content.  Argentina's laws provide generally 
good nominal protection.  However, the lack of any real bite 
(pirates have not faced jail time), coupled with the extra 
incentive provided by Argentina's devaluation in 2002, which 
spiked prices for imported media, has spurred piracy.  A 
local attorney working copyright issues told Econoff that his 
clients estimate that losses to U.S. companies due to optical 
media piracy in Argentina exceeded USD 150 million in 2004. 
The same attorney said that while the Argentine legal system 
does not function at a first-world level, it is "not bad for 
the region."  The legal system will generally respond when 
needed to effect the seizure of counterfeit media, the 
attorney said, but the existence of a personal relationship 
with relevant authorities is helpful.  Still, his client (a 
IP content trade association) worked with police to effect 
over 200 raids and seize over 100,000 pirated discs during 
2005. 
 
¶13.  Use/Procurement of Government Software: The GOA has yet 
to fully comply with its 1999 agreement with the local 
software industry to legalize unlicensed software used in 
offices of the national government, and many GOA offices 
continue to use pirated software.  Ministry of Interior 
Director of Information Management Eduardo Thill told a local 
news outlet in January 2005 that 90 percent of GOA agencies 
employing licensed software are using it illegally.  There is 
a GOA move toward open source software, according to Thill, 
but there has been no legislation to date to bind the GOA to 
open source software solutions.  That situation held true 
throughout 2005, although a representative of Thill's office 
told the Embassy February 2006 that the percentage of GOA 
agencies using licensed software illegally had fallen to 
between 80 and 85 percent. 
 
¶14.  Amendments to Existing Legislation: A promising piece of 
legislation to modernize Argentina's quarter-century old 
trademark law (Law 22,362) died in committee in 2005.  That 
draft law, introduced in August 2004, contained several 
measures that would have strengthened Argentina's 
anti-trademark piracy regime.  Specifically, the draft law 
would have: involved Argentina's tax agency (AFIP) in 
trademark piracy (counterfeit merchandise) investigations; 
expanded the authority of Argentina's Financial 
Investigations Unit (UIF) to include trademark piracy among 
the crimes that entity is able to investigate; and increased 
penalties for those convicted of trademark piracy 
(eliminating community service as a possible sentence).  The 
Embassy was told by a local attorney who helped to draft the 
legislation that it will be re-introduced in April 2006.  The 
same attorney blames the failure of the bill on the lethargy 
of local Argentine business chambers, which he said did not 
actively support the effort. 
 
---------- 
Trademarks 
---------- 
 
¶15.  Argentina's trademark law (Law 22,362) fulfills 
international standards, but legislation subsequent to its 
enactment has rendered it relatively ineffective, with 
penalties limited to probation and fines that are not high 
enough to act as a significant deterrent (see paragraph 14). 
The process of renewing trademarks is an area where INPI's 
increasing efficiency has become evident.  Whereas an 
applicant for renewal had to wait five months only a few 
years ago, the process is now completed in less than two 
months.  Raids by local police on flea markets where 
counterfeit merchandise is openly sold have not been frequent 
or widespread enough to lessen the availability of pirated 
goods.  Representatives of industries frequently targeted by 
counterfeiters claim that over forty large, well-established 
markets exist in Buenos Aires alone that are almost 
completely dedicated to the sale of counterfeit goods (in 
addition to innumerable smaller points of sale throughout the 
country). 
 
------------- 
Plant Variety 
------------- 
 
¶16.  Argentine farmers have the right to replant -- although 
not to sell -- seed generated from a harvest originating from 
registered seeds without paying royalties.  However, 
Argentine farmers continue to sell "brown bag" seed (as 
opposed to bags of seed showing brand names) as brand-name 
product.  This is a widespread problem with soybean seed, and 
it underlies Monsanto's recent court actions in Europe, which 
have resulted in ships carrying Argentine soy being stopped 
and the cargo seized.  Monsanto's actions are aimed at 
collecting royalties that Argentine farmers are not paying 
via legal challenges in countries in which Monsanto has 
patent protection for the Roundup Ready soybean technology. 
Farm associations and industry representatives generally 
agree that Argentina must elaborate and enact a new seed law 
that better protects intellectual property, but negotiations 
toward that end have broken down as of this writing.  The 
sale of "brown-bag" seed from Argentina to neighboring 
countries has also led to the significant production of 
unregistered biotech soybeans in Brazil and Paraguay. 
Argentina is a party to the 1978 Act of the International 
Union for the Protection of New Varieties of Plants (UPOV), 
but has not signed the 1991 UPOV convention. 
 
-------- 
Training 
-------- 
 
¶17.  Reluctance by the various enforcement entities to 
cooperate with each other is a problem that has long 
contributed to ineffective anti-piracy action in Argentina. 
The Embassy would therefore encourage any IPR training that 
emphasizes a team approach and brings together 
representatives from the full range of GOA institutions 
involved in anti-piracy efforts.  The trust and familiarity 
that would result from such officials being brought together, 
even if only for a short training session, would help to 
foster inter-agency teamwork of the sort necessary to 
effectively combat piracy. 
 
-------------------------- 
Comment and Recommendation 
-------------------------- 
¶18.  The Embassy's Special 301 report for 2005 said: "Most of 
the persons interviewed for this report believe that 2005 
will be the year when it becomes clear whether the legal and 
administrative improvements of the recent past will finally 
manifest themselves in tangible successes."  There was 
evidence of improvement during 2005, but very few of the 
hoped-for tangible successes.  INPI appears to be functioning 
more efficiently, but that procedural improvement has not 
translated into the issuance of patents with significant 
commercial value for U.S. pharmaceutical companies.  Piracy 
has not diminished, despite a significant recovery from an 
economic crisis that was a real spur to piracy.  Neither has 
Argentina's legislature taken the steps necessary to clamp 
down on piracy.  As also noted herein, the Argentine legal 
system remains an uncertain ally in the fight to protect 
intellectual property.  The Embassy therefore recommends that 
Argentina remain on the Special 301 Priority Watch List for 
2006.  End Comment. 
 
¶19.  To see more Buenos Aires reporting, visit our classified 
website at:  http//www.state.sgov.gov/p/wh/buenosaires 
GUTIERREZ


The following cable is from the following year and it says that the “GOA legislation to require use of open source software was introduced in 2001 but never passed.”



VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0335/01 0521641
ZNR UUUUU ZZH
R 211641Z FEB 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 7333
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 5952
RUEHMN/AMEMBASSY MONTEVIDEO 6190
RUEHSG/AMEMBASSY SANTIAGO 0198
RUEHBR/AMEMBASSY BRASILIA 5798
RUEHSO/AMCONSUL SAO PAULO 3171
RUEHRI/AMCONSUL RIO DE JANEIRO 2157

UNCLAS BUENOS AIRES 000335 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
DEPT FOR EB/TPP/IPE JENNIFER BOGER, RACHEL WALLACE AND ROBERT WATTS 
DEPT PLS PASS TO USTR JENNIFER CHOE GROVES, SUE CRONIN 
DOC/ITA/MAC/OIPR FOR CATHERINE PETERS 
PLEASE PASS TO USPTO JURBAN AND LOC STEPP 
 
E.O. 12958: N/A 
TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], 
ECON [Economic Conditions], AR [Argentina] 
SUBJECT: ARGENTINA'S 2007 SPECIAL 301 REVIEW 
 
REF: A. STATE 7944 
     B. 06 BUENOS AIRES 406 
 
------- 
Summary 
------- 
 
¶1.  (SBU) In 2006, Argentine authorities responsible for providing 
"adequate and effective protection to intellectual property rights" 
made few meaningful improvements in IPR legislation, regulation and 
enforcement and there remain serious weaknesses in each of these 
areas.  Proposed legislative amendments and regulations to 
strengthen the IPR regime were not implemented in 2006.  On patents, 
the application process continued to improve, with more and more 
timely adjudications.  However, the application backlog remains 
large, effectively curtailing the period of patent protection, and 
injunctive relief for patent infringement has been slow and variably 
enforced.  On the key issue of "data confidentiality," there has 
been no progress, with proprietary third-country pharmaceutical data 
routinely used by domestic competitors in violation of TRIPS Article 
39.3.  On copyrights, CD and DVD piracy remains prevalent, illegal 
internet downloading/distribution has jumped in line with expanded 
broadband access, and a court decision has sanctioned some 
photocopying of copyrighted printed material.  Trademark 
falsification remains widespread, with illegal markets poorly 
policed.  Minimalist fines and penalties offer little deterrent to 
falsification.  While Customs authorities were granted broader 
trademark enforcement powers in 2006, and there were a number of 
highly publicized seizures of blank and pirated discs, these efforts 
at best had marginal impact.  The Embassy therefore recommends that 
Argentina remain on the Priority Watch List in 2007, where it has 
remained since 1996.  An Embassy IPR action plan will be detailed 
Septel.  End Summary. 
 
------- 
Patents 
------- 
 
¶2.  (SBU) Argentina's patent and trademark agency, the National 
Institute of Industrial Property (INPI), made significant progress 
toward streamlining Argentina's patent system over the past several 
years.  That system appeared close to breakdown until 2002, with 
patent applications coming in much more quickly than they could be 
processed.  From 1995 until 2002, for example, INPI received 47,573 
patent applications but was able to resolve only 28,190 of those in 
the queue, for a deficit of over 19,000 applications in those eight 
years alone.  According to the World Intellectual Property 
Organization (WIPO), in 2005 Argentina ranked 18th in the world in 
patent applications received.  The backlog has since declined, with 
INPI receiving 15,483 patent applications during 2003-2005 and 
resolving 20,118 during the same period.  (Note: This represents 
total resolutions, which include cases rejected for procedural 
reasons or abandoned.  End Note.)  Final approvals and denials after 
full investigation in 2003-2005 totaled 1,061, 1,778, and 2,670 
respectively.  In 2006, final approvals and denials jumped to 4,468. 
 INPI officials are targeting 6,000 final approvals and denials in 
2007. 
 
¶3.  (U) INPI's improved efficiency stems from a number of reforms 
implemented beginning in 2003, including fast-track procedures to 
reduce a patent application backlog of over 30,000 cases. All 
applicants with more than one patent application pending were given 
the opportunity to rank-order their applications (with some 
restrictions), allowing them to jump the application of a 
potentially more-valuable product ahead of a less-promising 
application that had been submitted at an earlier date.  A second 
such opportunity was announced in December 2006.  Since 2003, U.S. 
and other research-based pharmaceutical companies are also allowed 
to present studies used in third country patent applications to 
support patent requests in Argentina, significantly easing INPI's 
investigation requirements. 
 
¶4.  (SBU) The GOA also increased INPI's real budget resources to 
allow the hiring of 27 new patent examiners in 2004, doubling the 
number of pharmaceutical examiners from 10 to 20.  According to 
INPI, improved in-house training has boosted the average number of 
applications resolved per examiner per year from 52 in 2004 and 69 
in 2005 to 84 in 2006, a 62% improvement in two years.  As a 
consequence, the time for a patent application to receive a 
preliminary examination fell from fifteen months in 2004 to eleven 
months in 2006.  In another positive development, INPI sent two of 
its pharmaceutical inspectors to the U.S. Patent and Trademark 
Office's (USPTO) academy for training in 2005.  That training, 
arranged by the Embassy and jointly funded by the USPTO and 
research-based pharmaceutical companies, was a first for Argentine 
patent inspectors.  Post is currently working with INPI to explore 
sending more patent and/or trademark examiners for USPTO training in 
2007, which the pharmaceutical chamber has again agreed in principle 
to support.  Post is also working with Argentine Customs authorities 
to identify appropriate candidates for a customs border enforcement 
training class, also provided by USPTO. 
 
¶5.  (SBU) These gains, while undeniably positive, proceed from a 
very low baseline.  The right to patent pharmaceutical products in 
Argentina was recognized only in 1996, and the first pharmaceutical 
patents for approximately 80 products of marginal commercial value 
were only issued following the expiration of the TRIPS transition 
period in October 2000.  A small number of other pharmaceutical 
patents of greater value were granted in subsequent years, but only 
after long and arduous processes.  Many of the patent applications 
INPI counted as "resolved" during 2005 were simply discarded after 
the applicant failed to respond to an INPI instruction to formally 
reaffirm the application.  CAEMe (the Argentine Chamber of Medicinal 
Specialties, an association that represents U.S. and other 
research-based pharmaceutical companies) estimates this number as 
approximately 4000.  (Note: While INPI declined to share their 
estimate of the current year-end 2006 patent application backlog, 
local industry sources estimate it to be in the 23-24,000 range. End 
Note.) 
 
¶6. (U) With the Argentine 15 year patent protection clock starting 
at the time of application, U.S. research-based pharmaceutical 
companies operating here complain that INPI's extended patent 
processing backlog effectively curtails their period of exclusive 
patent protection.  For example, all patents issued by INPI in 2006 
had been applied for no later than in 2001 (and applications for 
pharmaceutical and other chemical products take longer than average 
to process).  INPI faces the continuing challenge of maintaining 
adequate human resources, with trained examiners frequently hired 
away by the private sector and long in-house training periods 
required to bring newly hired examiners up to competence.  However, 
for 2007, INPI's budget for patent examiners increased 58%, 
including funds for new examiners and incentives for examiners to 
complete more cases. 
 
¶7.  (U) The lack of patents for many products, coupled with 
Argentina's devaluation in 2002, which resulted in sharp price 
increases for imported products, increased incentives for local 
pharmaceutical companies to produce unlicensed copies of products 
that had been patented or for which patents were pending.  The 
combination of these factors has had a negative effect on the 
Argentina-derived business of U.S.-based pharmaceutical companies. 
According to CAEMe, local pharmaceutical firms now have over 50 
percent of the Argentine market and have reached almost 50 percent 
of the export market.  (Note: not all local pharmaceutical firms are 
perceived as patent infringers.  Some of the producers/exporters, 
according to CAEMe, deal only in products which are either licensed 
or have expired patent protection, and therefore are legitimate 
generics.  End Note.)  Argentina amended its patent law (Law 24,481) 
in December 2003 to implement an agreement between the USG and the 
GOA that had been signed in May 2002.  That agreement came after 
approximately three years of consultations under the WTO's dispute 
settlement mechanism. 
 
¶8.  (SBU) The most important remaining unresolved pharmaceutical 
patent issue relates to the effective legal protection of 
confidential and proprietary data developed by pharmaceutical 
 
SIPDIS 
companies to demonstrate the efficacy and safety of new medicines 
(i.e., "data protection").  U.S. and other research-based 
pharmaceutical companies believe this to be a critical issue and 
Argentina and the U.S. have agreed to leave this issue within the 
WTO dispute settlement mechanism for future action.  GoA policies 
have led research-based pharmaceutical companies to complain that 
Argentine health regulatory authorities (in particular ANMAT, the 
National Administration of Medicines, Food, and Medical Technology, 
the equivalent of the FDA) rely inappropriately on data developed by 
research-based companies and presented by companies which did not 
participate in such research to ANMAT to obtain marketing approval 
of unauthorized copies of innovative medicines.  According to CAEMe, 
ANMAT interprets the public disclosure of partial data as an 
indicator that the data should be regarded as in the public domain. 
Article 39.3 of the TRIPS agreement requires WTO members to protect 
data submitted for pharmaceutical marketing approval "against unfair 
commercial use" and "disclosure."  The GoA argument appears to be 
based upon the fact that infringing companies need only present 
publicly-available information, such as an existing FDA approval of 
a product, rather than confidential clinical studies results.  This 
might seem to be protection against "disclosure" on the part of the 
GoA, and also avert the issue of "unfair."  The question remains, 
however, as to what exactly constitutes unfair use of protected 
data.  If an infringer can obtain permission to market their copied 
products doing what is legal, there appears to be no need to even 
attempt "unfair" methods. 
 
¶9.  (U) U.S. pharmaceutical companies also remain concerned about 
the legal implications of two specific clauses in the 2003 
amendment.  Specifically, it mandates an expert opinion, and 
requires consideration of the economic impact of an injunction on 
both parties to determine whether or not goods alleged to violate 
the patent law should be seized.  When the amendment was passed into 
law, research-based pharmaceutical companies feared that those 
clauses could preclude the granting of preliminary injunctive relief 
and limit the success they have achieved in protecting their 
products through the use of preliminary injunctions. 
 
¶10.  (SBU) Those fears have been realized.  In 2005, Eli Lilly 
discovered several Argentine competitors selling copies of its lead 
oncological drug, and sought injunctions to prevent those sales.  An 
injunction against one infringer was issued after an 18 month 
judicial process, but was later revoked when the infringer presented 
what it claimed was an alternate process to produce the medication 
(the patent is based on the process, not the molecule), without 
evidence that the process was in use, or that it even worked.  For 
another infringer, the application for an injunction was rejected by 
a judge convinced by a local expert hired by the defense, who 
claimed that the copycat drug did not violate the U.S. 
pharmaceutical company's patent.  Of the three known infringers of 
Eli Lilly's medication, two had already signed agreements in court 
not to produce copies, and proceeded to violate those agreements. 
In another instance, Merck Sharp and Dohme went to court in 2005 to 
remove five copies of one of its joint-venture drugs from the 
Argentine market.  In a promising ruling, the judge issued 
injunctions ordering the copies off the market.  More than 18 months 
after the decision, however, those injunctions have yet to be 
enforced - despite the fact that the judge in the case ruled the 
legal basis for the copy drug's approval unconstitutional, as well 
as in violation of TRIPS Article 39.3.  (Note: the injunction 
ordered ANMAT to rescind marketing approval of the copied product, 
which ANMAT has not yet done.  According to CAEMe, the only further 
legal recourse available to Merck would be to demand the arrest of 
those responsible for the GoA's failure to comply with the court 
order- the Director of ANMAT and/or the Minister of Health.  Merck 
is unwilling to pursue this course of action.  End Note.) 
 
¶11.  (SBU) A frequent complaint of U.S. pharmaceutical companies is 
that there remains in Argentina no regulatory linkage between INPI 
and ANMAT.  While such linkage is not explicitly required by TRIPS, 
its absence in Argentina allows ANMAT to grant local pharmaceutical 
producers authorization to manufacture and sell products that have 
already been patented or for which a patent has been requested.  The 
Embassy and multinational pharmaceutical companies have urged the 
GOA to establish a linkage between ANMAT and INPI that would prevent 
ANMAT from continuing to authorize local pharmaceuticals to produce 
products for which an INPI patent has been granted or is pending. 
There were hints during 2005 of the beginnings of a cooperative 
relationship between INPI and ANMAT, but the Embassy has no evidence 
that such cooperation has developed.  (Note: the head of INPI told 
Econoff in late 2006 that INPI and ANMAT were in close 
communication; the head of ANMAT told Econoff that there is no 
communication at all between the agencies.  The head of INPI also 
told Econoff that ANMAT's decisions were constrained by applicable 
laws - the most relevant of which doesn't just allow but requires 
marketing approval of drugs already approved in certain other 
countries, including the U.S., and makes no mention of patents - and 
that the proper authority to make decisions over potentially 
conflicting patents was the court system, not ANMAT.  End Note.) 
U.S. and other research-based pharmaceutical companies must incur 
the legal costs of obtaining injunctions to stop the production and 
sale of products produced by local pharmaceutical companies for 
which the research-based companies have INPI patents. 
 
¶12.  (U) Law 25,649 adopted in 2002 requires medical doctors to use 
a drug's generic name in all prescriptions.  Doctors may also 
include a trademarked version of a drug (and no more than one) in 
their prescriptions, but pharmacists may still offer a substitute. 
If a medical doctor does not want a substitute provided, the reason 
must be indicated on the prescription.  U.S. and other 
research-based pharmaceutical companies operating in Argentina 
believe this law diverts sales from innovative medicines to 
TRIPS-infringing copy products.  Some of these firms argue that true 
generics do not exist in Argentina because copy products are not 
required to demonstrate their bioequivalence or bioavailability with 
original products, meaning local producers can sell drug copies that 
lack quality and safety assurances. 
¶13.  (U) Argentina has yet to become a contracting state to the 
World Intellectual Property Organization's (WIPO) Patent Cooperation 
Treaty.  The WIPO treaty's mutual patent recognition provisions 
among 135 Contracting Parties would eliminate much of INPI's current 
patent application backlog. 
 
---------- 
Copyrights 
---------- 
 
¶14. (U) The incidence of Argentine copyright piracy via 
"traditional" CD and DVD copying does not appear to have declined in 
Argentina, while  the frequency of illegal electronic downloads has 
expanded in line with the penetration of broadband access and the 
copying of copyrighted books and documents has acquired some 
domestic legal sanction.  On the positive side, the Argentine 
Customs Service made some large seizures of blank and pirated 
optical disks, and local police raids netted more pirated disks in 
2006 than in 2005. 
 
¶15.  (SBU) Optical Media Piracy: Problems in this area include the 
widespread and open sale of pirated copies of CDs and DVDs, and 
increasing number of businesses offering home delivery (often 
coordinated entirely online) of pirated artistic content. 
Argentina's copyright regime, largely based on the 1933 Copyright 
Act (as amended), provides generally good nominal protection. 
However, the lack of any real enforcement bite (in current practice, 
pirates will only face jail time if their involvement can also be 
defined as organized crime), coupled with the 2002 
devaluation-linked disincentive to purchase legitimate - but now 
more expensive - imported products, has spurred piracy.  A survey 
sponsored by the Local American Chamber of Commerce in 2006 showed 
that, while more than half the population believes that piracy 
precludes job creation and facilitates tax evasion, two thirds of 
Argentines have knowingly bought pirated products.  A local attorney 
specializing in copyright issues told Econoff that, while the 
Argentine legal system does not function at a first-world level, it 
is "not bad for the region."  The legal system will generally 
respond when needed to seize counterfeit media, the attorney said, 
but the existence of a personal relationship with relevant 
authorities is helpful.  Still, his client (an IP content trade 
association) worked with police to effect over 200 raids in 2006 
that seized over 240,000 pirated discs and videotapes (about 4% of 
the estimated piracy market), up from roughly 100,000 in 2005. 
 
¶16.  (SBU) In addition to local police actions, there were also 
notable seizures of materials by the Argentine Customs Service.  In 
August 2006, they seized a million blank discs which had been 
misclassified by the importer.  The importer was also determined to 
have brought in similar shipments previously.  A shipment of over 
500,000 pirated CDs and DVDs was seized in late 2006 in the 
tri-border area (near Brazil and Paraguay) and destroyed.  In early 
2007, another shipment of blank discs was seized, this one with over 
three million discs, which represents approximately half the pirated 
discs sold in Argentina each year.  (Note: Argentine customs 
authorities told Econoff that the majority of the discs, once 
protected materials had been copied on them, would likely have been 
sold in Brazil, so the dent in the Argentine piracy market will 
likely be less.  End Note.) 
 
¶17.  (U) Illegal Downloads:  Electronic delivery of copyright 
infringing materials is on the rise.  CAPIF (the Argentine Chamber 
of Phonograph and Videograph Producers) estimates that there were 
over 600 million illegal song downloads in Argentina in 2006, a 
nearly 50% increase from 2004.  This growth is roughly in line with 
the increase in broadband internet access, which reached 13 million 
lines by the end of 2006.  CAPIF leaders say that the legal 
downloads in Argentina total less than 1% of the illegal ones. 
 
¶18.  (U) Use/Procurement of Government Software: The GOA has yet to 
fully comply with its 1999 agreement with the local software 
industry to legalize unlicensed software used in offices of the 
national government, and many GoA offices continue to use pirated 
software.  GoA sources estimated in 2005 that over 90 percent of GoA 
agencies employing licensed software are using it illegally.  GOA 
legislation to require use of open source software was introduced in 
2001 but never passed. 
 
¶19.  (U) Legal Sanction of Photocopying: A new area of concern in 
the copyright area is based on a 2006 Appeals Court ruling that 
students at the primary Argentine public university could legally 
make copies of copyrighted works (i.e., textbooks).  The ruling, 
which argued that this practice "facilitated the access of study 
materials to all," extended to those who made copies and sold them 
to the students. 
 
¶20.  (U) Artist's Legal Rights: Draft legislation titled the "Law of 
the Musical Performer," introduced in late 2005 but yet to be 
formally considered by congressional committees, created some 
controversy when rumors surfaced that it would receive expedited 
treatment in late 2006.  One potential drawback of the draft (as it 
relates to intellectual property protection) would be its 
restriction of copyright-holders' "right of making available" via 
digital media.  It would also delegate that right exclusively to a 
performers' group, though this could violate Argentina's obligations 
under the WIPO Performances and Phonograms Treaty (WPPT) to provide 
that right to producers as well.  CAPIF is preparing a new bill 
which would codify rights for both producers and performers and 
expects this alternative draft legislation to be submitted for 
congressional review in the first half of 2007. 
 
¶21.  (U) Proposed Augmentation of Copyright Penalties: Motion 
picture and recording industry representatives inform Post that they 
plan to propose to congress a modification of the criminal code in 
2007 that would increase currently nominal criminal penalties and 
fines for copyright violations.  It would also facilitate the 
destruction of pirated goods by providing discretion to the rights 
holder over disposition of infringing goods as well as make updates 
the law to address modern technologies. 
 
---------- 
Trademarks 
---------- 
 
¶22.  (SBU) According to a former head of INPI who continues to work 
in the IPR field, Argentina's 1982-era trademark law (Law 22,362) 
does meet international standards, but amendments to the Penal Code 
limiting penalties to probation periods have rendered it less 
effective, and a schedule of nominal fines have not proven 
significant deterrents to falsification. On a positive note, the 
process of renewing trademarks is another area where INPI's 
increasing efficiency has become evident.  Whereas an applicant for 
renewal had to wait five months only a few years ago, the process is 
now completed in less than two months.  Raids by local police on 
flea markets where counterfeit merchandise is openly sold have not 
been frequent or widespread enough to lessen the availability of 
pirated goods.  Representatives of industries frequently targeted by 
counterfeiters claim that over forty large, well-established markets 
exist in Buenos Aires alone that are almost completely dedicated to 
the sale of counterfeit goods (in addition to innumerable smaller 
points of sale throughout the country).  The largest of these 
markets, which is reputed to be the largest in South America, is 
called "La Salada."  According to reports, 6,000 people work there, 
and 20,000 customers visit and make USD 9 million in purchases 
daily.  (Note: The EU highlighted this market in its October 2006 
301-equivalent report, which received considerable press attention 
in Argentina.  End Note.)  "La Salada" has a dangerous reputation, 
and post IPR contacts tell us that police conduct no enforcement 
operations there due to fear of organized crime elements which 
allegedly operate within the market. 
¶23.  (SBU) Amendments to Existing Legislation: Proposed legislation 
to modernize Argentina's trademark law died in committee in 2005. 
That draft law, introduced in August 2004, contained several 
measures that would have strengthened Argentina's anti-trademark 
piracy regime.  Specifically, the draft law would have: involved 
Argentina's tax agency (AFIP) in trademark piracy (counterfeit 
merchandise) investigations; expanded the authority of Argentina's 
Financial Investigations Unit (UIF) to include trademark piracy 
among the crimes that entity is able to investigate; and increased 
penalties for those convicted of trademark piracy (eliminating 
community service as a possible sentence).  An attorney who helped 
draft the text blamed the failure of the bill on the lethargy of 
local Argentine business chambers, which he said did not actively 
support the effort.  The bill was, in fact, viewed negatively by 
several members of the American Chamber of Commerce's (AmCham) 
Intellectual Property Committee, some of whom preferred that more 
discretion be granted to the trademark holder to determine the 
degree of the penalty and the disposition of infringing goods. 
While the legislation has not been re-introduced, the same 
congressman who originally submitted the draft bill in 2004 proposed 
in September 2006 the creation of a public attorney's office 
dedicated specifically to trademark crimes.  The proposal has not 
moved forward.  Meanwhile, the AmCham committee created a new draft 
trademark law, using the 2004 proposal as a base, which has not yet 
been introduced in Congress.  (Note: An AmCham leader indicated that 
it will likely not be introduced unless it can gain support from 
leading domestic business chambers.  End Note.) 
 
Enforcement actions 
 
¶24. (U) Law 25986, which took effect in January 2005, prohibits the 
import or export of merchandise which violates international 
property rights.  However, regulations to implement this law have 
yet to be issued two years later.  In October 2006, AFIP (the 
Federal Administration of Public Revenue, an IRS-equivalent and with 
authority over Argentina's Customs agency) issued a decree which 
allows Customs to detain potential trademark violating merchandise 
until the holder of the locally registered trademark authenticates 
the shipment, and seize it if the holder does not.  However, while 
regulation of the law would also allow detention and seizure of 
merchandise which violates copyright and patent norms (such as 
copied pharmaceutical products), the decree only applies to 
trademarks. 
 
¶25. (U) There were some notable IPR-related prosecutions in 2006. 
Two music pirates (who operated in the "La Salada" market) received 
two-year prison sentences, albeit three years after their initial 
arrest.  In Rosario, Argentina's third largest city, four people 
were arrested for running a large "home delivery" operation via 
internet sites.  The head of that organization has been charged 
under organized crime laws, as well as tax evasion and money 
laundering statutes.  A six-country effort initiated by the 
international recording industry had a limited impact in Argentina, 
as a judge's ruling in favor of internet cafes (the focus of the 
operation) prevented nearly all planned raids in the country.  Out 
of 213 cafes raided overall, only 12 were in Argentina. 
 
--------------------- 
GMO Rights Protection 
--------------------- 
 
¶26.  (SBU) Argentine farmers have the legal right to replant - 
although not to sell - seed generated from a harvest originating 
from registered seeds without paying additional royalties.  However, 
Argentine farmers have long sold registered seeds without payment of 
required royalties, a practice which continued in 2006.  This is a 
widespread problem with soybean seed, and it underlies Monsanto's 
recent court actions in Europe, which have resulted in ships 
carrying Argentine soy being stopped and the cargo seized. 
Monsanto's actions are aimed at collecting royalties that Argentine 
farmers are not paying via legal challenges in countries in which 
Monsanto has patent protection for the Roundup Ready soybean 
technology.  According to the president of an Argentine seed 
producer association (in which Monsanto participates), 65-70% of all 
soy grown in Argentina is produced from Rounup Ready seeds for 
which no royalties have been paid.  Farm associations and industry 
representatives generally agree that Argentina must elaborate and 
enact a new seed law that better protects intellectual property, but 
negotiations toward that end have not prospered.  The sale of 
registered seed from Argentina to neighboring countries, also 
without payment of royalties, has led to significant planting of 
unregistered biotech soybeans in Brazil and Paraguay.  Argentina is 
a party to the 1978 Act of the International Union for the 
Protection of New Varieties of Plants (UPOV), but has not signed the 
1991 UPOV convention revision.  Monsanto reps have told post that 
they do not intend to introduce the next generation of Roundup Ready 
until a GoA-sanctioned agreement with local growers is signed which 
will ensure that Monsanto receives proper royalty payments. 
Ambassador, Embassy officers and visiting Congressmen have raised 
the Monsanto problem regularly in recent months, but without 
achieving progress. 
 
----------------------- 
Embassy IPR Initiatives 
----------------------- 
 
¶27.  (SBU) Beyond significant regulatory and enforcement 
deficiencies detailed above, reluctance by the various GoA 
enforcement entities to cooperate with each other is a problem that 
has long contributed to ineffective anti-piracy action in Argentina. 
 The Embassy therefore encourages IPR training that brings together 
representatives from the full range of GOA institutions involved in 
anti-piracy efforts.  The trust and familiarity resulting from such 
cooperation would help foster GoA inter-agency teamwork of the sort 
necessary to effectively combat piracy.  One such training 
opportunity is tentatively scheduled for 2007: With the assistance 
of the U.S. Department of Justice, Post hopes to bring GoA and 
Argentine private sector officials together to explore and develop 
innovative IPR enforcement methodologies consistent with Argentina's 
legal and regulatory framework.  A broader Post IPR 2007 strategic 
plan will be detailed septel. 
 
-------------------------- 
Comment and Recommendation 
-------------------------- 
 
¶28.  (SBU) Argentina has been on the Special 301 Priority Watch List 
since 1996, and few meaningful improvements were made in 2006 to 
merit an upgrade in this designation.  There was no movement on the 
key issue of pharmaceutical patent data protection that appears to 
violate TRIPS Article 39.3.  While INPI continues to function more 
efficiently and has won additional budget resources this year, 
procedural improvements to date have only made minor inroads into a 
patent application backlog that significantly curtails the periods 
of patent protection.  Patents that do get issued carry a 
questionable legal weight, as evidenced by ongoing problems with 
copied products, the lack of legal resolution of some infringement 
cases, and variable enforcement of those infringement cases where 
injunctions have been obtained.  The volume of copyright and 
trademark violations has not diminished; Argentina's legislature and 
enforcement arms have not undertaken measures necessary to 
discourage new violations; and the Argentine judiciary remains an 
uncertain ally in the fight to protect intellectual property.  While 
the decree allowing trademark enforcement by Customs, industry 
proposed legislation to increase currently nominal criminal 
penalties and fines for copyright violations, and highly publicized 
2006 seizures of blank and pirated discs are positive signs, 
improvements in Argentina's IPR regime this year weren't 
particularly significant.  The Embassy therefore recommends that 
Argentina remain on the Special 301 Priority Watch List for 2007. 
End Comment. 
 
¶22.  To see more Buenos Aires reporting, visit our classified 
website at: http://www.state.sgov.gov/p/wh/buenosaires 
 
WAYNE

Clearly this is relevant not just to any one aspect of life. What it shows is the US fighting for assimilation in Argentina, in order to benefit American businesses at the expense of Argentina. Who does the GOA represent? Argentinians oughtn’t allow this to happen, but they are probably indoctrinated (Westernised) and programmed to think it’s the right thing to do.

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