Summary: Cables shed light on how Hollywood and a Microsoft front group pressured Indonesian authorities, which had also proposed moving to Free/open source software
We previously covered cables from Indonesia, just shortly after we wrote about ODF there and years after we wrote about a Microsoft MOU. According to the following Cablegate cable, Microsoft’s front group, the BSA, complained about “lack resources to move and properly store cumbersome and sensitive optical disk production machinery seized during raids.” It is in the same cable that we found (in ¶8): “Tanduk provided Katz with an impressive, newly-published handbook titled “Optical Disk Regulation Implementation Guide.” The hard-cover, Indonesian language publication caps a highly successful series of USAID-funded training workshops for the OD factory monitoring team. It includes relevant GOI laws and regulations, color photographs, and detailed technical and procedural guidance for the team. The technical advisor who ran the USAID project, a former Business Software Alliance (BSA) and Motion Picture Association (MPA) local representative, has recently agreed to continue his ODR work with the MOI for another year as a Department of Justice ICITAP senior technical advisor.
Just above that it says: “The heads of several agencies — Trade, Research and Technology, Economic Planning (Bapenas) and the DG for IPR — also pledged to replace pirated software in their agencies computers with open source or legal products.”
As we already know with Cablegate aside, Microsoft used the usual tricks to impede the adoption of FOSS in Indonesia (more on that later). In any event, here is the cable in question:
VZCZCXRO2803 PP RUEHCHI RUEHDT RUEHHM DE RUEHJA #8114/01 1790836 ZNR UUUUU ZZH P 280836Z JUN 06 FM AMEMBASSY JAKARTA TO RUEHC/SECSTATE WASHDC PRIORITY 6462 INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS RUCPDOC/DEPT OF COMMERCE WASHDC UNCLAS SECTION 01 OF 05 JAKARTA 008114 SIPDIS SIPDIS SENSITIVE FOR EAP/MTS; EB/IPE/EAP COMMERCE FOR GOLIKE/4430 COMMERCE PLEASE PASS USPTO FOR JOELLEN URBAN DEPT PASS TO USTR DKATZ, JGROVES, RBAE, VESPINEL E.O. 12598: N/A TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], WTO [World Tourism Organization], ECON [Economic Conditions], ID [Indonesia] SUBJECT: IPR Update - GOI Making Steady Progress ¶1. (SBU) Summary: At the first meeting of the Indonesian Government's (GOI) newly-established National Intellectual Property Rights (IPR) Task Force on June 7 Indonesia National Police (INP) Chief General Sutanto and Attorney General Abdul Rachman Saleh pledged to improve IPR enforcement and Minister of Trade Mari Pangestu outlined the importance of IPR to the country's economic development. The Task Force's senior working level committee is drafting short and medium term plans of action, as well as coordinating efforts to collect better IPR enforcement data. The Ministry of Industry (MOI) optical disk (OD) factory monitoring team has registered 26 factories, provided them with source identification (SID) codes, and established a schedule of unannounced factory visits. It is also in the process of registering the remaining three factories that have been identified by the intellectual property (IP) industry. In response to GOI demands, local OD producers have voluntarily surrendered over 180 OD stampers without SID codes. Local OD producers and distributors have agreed with the GOI that, after this year, any optical disk sold without SID code can be considered a pirated copy. Local IP industry representatives report that police cooperation has improved. For the first time, police are conducting vendor and factory raids on their own initiative. Jakarta district and national police have promised to continue raids, particularly against Jakarta's most notorious malls. Police and prosecutor collaboration remains weak and there is a large discrepancy between the number of cases police turn over to the Attorney General's *~cQnzvh-0`eia and Pacific Affairs Director Disited Jakarta June 20-22 to discuss Indonesia's current Special 301 OCR with key GOI officials and IP industry representatives. GOI officials expressed general disappointment with Indonesia's retention on the Special 301 Priority Watch List in May. They welcomed, though, the U.S. Government's (USG) decision to conduct a second consecutive OCR. Katz informed them that the timing of the OCR would depend on GOI efforts and that it could take place as early as the end of August or September. He also stressed to GOI officials and IP industry representatives the importance of providing regular enforcement data and other information in support of the OCR. National IPR Task Force Holds First Meetings -------------------------------------------- ¶3. (SBU) Ministry of Justice Director General of IPR Abdul Bari Azed informed Katz on June 20 that the GOI's newly- established National IPR Task Force held its first monthly senior working level meeting in May and quarterly ministerial-level meeting on June 7. Bari reported that on June 7 Indonesian National Police Chief Sutanto and Attorney General Abdul Rachman Saleh along with other key cabinet officials pledged to improve IPR enforcement. (Note: Katz confirmed Bari's account in subsequent meetings with the MOI, MOT and police. End note.) Minister of Trade (MOT) Mari Pangestu, vice chair of the Task Force, explained the importance of IPR protection and enforcement to Indonesia's investment climate and economic development. The heads of several agencies -- Trade, Research and Technology, Economic Planning (Bapenas) and the DG for IPR -- also pledged to replace pirated software in their agencies computers with open source or legal products. ¶4. (SBU) According to Bari, General Sutanto promised INP support for MOI OD factory monitoring team inspections and continued police raids on pirate OD vendors and factories, with emphasis on Ratu Plaza and Mangga Dua Mall, two of Jakarta's most notorious pirate OD markets. Sutanto pointed out the challenges inherent in conducting aggressive raids against Harko-Glodok, Jakarta's primary pirate OD distribution center, noting that it risked social disorder. (Note: Harko-Glodok is located in an ethnic Chinese majority area of Jakarta and is thought to have links to organized crime. A police raid on the area several years ago led to riots, a fire, and several deaths, with police paying compensation for some of the damage. End note.) ¶5. (SBU) Bari, who serves as chairman of the Task Force's JAKARTA 00008114 002 OF 005 senior working level committee, said his group would meet again in July to agree on text of short and medium term plans of action. Priorities will include OD Regulation (ODR) implementation and collecting better data and information on GOI IPR enforcement efforts, particularly from Indonesia's major urban centers (greater Jakarta, Surabaya, Medan, Bandung, Makasar and Denpasar). Bari noted that members of the senior working level committee met recently with officials at the Supreme Court to request data on civil and criminal IPR cases. According to Bari, the committee is also establishing sub-committees to focus on specific issues. One subcommittee, led by Ministry of Trade Senior Advisor Halida Miljani, would liaise with IP industry representatives and associations, and another with donors and the diplomatic community. (Note: Miljani on May 30 briefed American Chamber of Commerce IPR Committee members on the National Task Force. End note.) OD Factory Monitoring Team Sets Schedule --------------------------------- ¶6. (SBU) MOI Directorate General for Chemical, Agriculture and Forestry Based Industry Director Tony Tanduk on June 21 told Katz that the MOI has registered 26 OD factories and distributed SID codes to each of them. It is also in the process of registering the remaining three OD factories identified by the IP industry. The MOI has allocated Rp 300 million (approximately USD 30,000) per year to the OD factory monitoring team. The team, which now includes members of the INP, has set a schedule of six unannounced factory visits per month. The first three inspections occurred on June 13. While all three factories had SID codes engraved in their moulds and stampers, none were producing ODs. Tanduk remarked, somewhat sheepishly, that managers at all three factories claimed that they were waiting to ensure the accuracy of copyright documentation. ¶7. (SBU) Under an agreement with the MOI, owners of stampers without SIDs have agreed to turn them in to MOI by June 15. Tanduk showed Katz one surrendered stamper and said he has collected 186 to date; he expects to receive another 100 in the coming weeks. The MOI plans to destroy the stampers at an IPR public destruction ceremony with the police sometime in July. The agreement also stipulates that, after December 31, 2006, the GOI will consider all ODs sold without SID codes as illegal pirated copies. Some owners of stampers and factories have delayed using SID codes, as it requires them to send stampers and molds to Singapore or Hong Kong for engraving. Katz suggested that Tanduk send a letter to all registered factories warning them that all their molds and stampers must include engraved SIDs codes. Tanduk agreed. ¶8. (SBU) Tanduk provided Katz with an impressive, newly- published handbook titled "Optical Disk Regulation Implementation Guide." The hard-cover, Indonesian language publication caps a highly successful series of USAID-funded training workshops for the OD factory monitoring team. It includes relevant GOI laws and regulations, color photographs, and detailed technical and procedural guidance for the team. The technical advisor who ran the USAID project, a former Business Software Alliance (BSA) and Motion Picture Association (MPA) local representative, has recently agreed to continue his ODR work with the MOI for another year as a Department of Justice ICITAP senior technical advisor. Police Continue Raids --------------------- ¶9. (SBU) Jakarta Metropolitan Police (Metropolda) Special Crimes Lieutenant Colonel Police Agus Adriyanto and Chief of Investigation Umar Surya Fana on June 23 provided Katz with a spreadsheet detailing 267 IPR raids on pirate OD vendors that police conducted throughout the greater Jakarta metropolitan area since the beginning of this year. According to the report, police seized roughly 1.2 million pirated ODs, and at least temporarily detained 433. According to a local MPA representative, these figures do not include a raid on Ratu Plaza late on June 23, during which Metropolda police seized roughly 100,000 pirated ODs and arrested several people. The 267 raids also do not include West Jakarta Police's seizure on June 1 of 140 DVD burners and 55,000 pirated ODs and the arrest of two persons. Metropolda also seized 55 burners and 360,000 pirated ODs and arrested two persons in a separate raid on JAKARTA 00008114 003 OF 005 April 27. Based on leads from this raid, police raided a small distribution warehouse where they seized 30,000 pirated ODs and arrested another two individuals. ¶10. (SBU) Umar explained that police had investigated and referred all 267 cases to the AGO. He also showed Katz a wall chart indicating that 16 individuals remained in Metropolda's temporary detention facilities on IPR-related charges. Umar could not say how many of the 433 individuals arrested in 2006 were transferred to AGO holding facilities along with their case files. He complained that once police sent cases to the AGO, it was very difficult to obtain information on their outcomes from the AGO or courts. Katz suggested that joint workshops with the police, AGO and courts on IPR evidence collection, investigations and prosecutions might facilitate greater cooperation between these groups. Both Agus and Umar welcomed the idea. ¶11. (SBU) Katz congratulated Agus and Umar on their successes and noted that reports of their actions had been received in Washington. He encouraged them to continue their efforts, and suggested particular attention be paid to Jakarta's most notorious malls. Umar said his unit would remain focused on Ratu Plaza, Mangga Dua and Harko-Glodok, but added that raids on Harko-Glodok posed risks. On June 22 some Jakarta police ran into physical resistance when they attempted to conduct a limited raid on Harko-Glodok's street vendors, located some distance away from its main wholesale distribution center. ¶12. (SBU) Umar, a son-in-law of Indonesia Anti-Corruption Chairman Taufikurrahman Ruki, said that support for Metropolda's efforts came directly to him from General Sutanto. He provided Katz with a tour of Metropolda's halls and warehouse filled with growing sacks of seized pirated ODs and DVD burners. Sometime in July, the police plan to hold a public destruction ceremony with support from the Motion Pictures Association (MPA). An investigator for a local law firm, who works part-time for MPA and supports Metropolda's raids, has recently accepted a second DOJ ICITAP one-year senior technical advisor position to support INP IPR enforcement efforts. ¶13. (SBU) In a separate meeting on June 23, INP Headquarters Special Economic Crimes Colonel Police Rycko Amelza Danniel told Katz that INP Police Chief General Sutanto has ordered his unit to work with North Jakarta police units to develop a plan for shutting down Harko-Glodok. Rycko added that his unit would also begin collecting data from police raids, seizures and arrests from major urban centers across Indonesia. AGO Remains Weak But Interested ------------------------------- ¶14. (SBU) Although he did not provide detailed information, AGO Acting Deputy Attorney General for Special Crimes Abdul Hakim Ritonga on June 23 informed Katz that the Jakarta AGO had prosecuted roughly a dozen IPR cases over the past year. He admitted that until recently IPR has not been a high priority. He suggested the AGO could raise the profile of IPR by including it under the purview of the AGO's newly created Transnational Crimes Task Force. Katz remarked that detailed data on IPR prosecutions and convictions throughout Indonesia would be very useful for the Special 301 decision- making process. Ritonga said that he could gather such information, provided the U.S. Embassy formally requested it. ¶15. (SBU) Katz showed the Ritonga Metropolda's data on raids, arrests and investigations since the beginning of this year, and asked if the AGO could tell us what happened with each case. Ritonga said it was possible, but warned that, while police have recently referred many IPR-related case files to the AGO, their cases were often poorly investigated, lacked sufficient evidence, or were intended to simply to boost police arrest numbers and impress superiors. Ritonga said he would support joint workshops with the police, AGO and courts on IPR evidence collection, investigations and prosecutions. Draft Customs Law Includes Ex Officio Powers -------------------------------------------- ¶16. (SBU) Ministry of Finance Directorate General of Customs IPR Unit Chief Okto Iranto on June 22 told Katz that the JAKARTA 00008114 004 OF 005 GOI's new draft customs law contained the same ex officio powers contained in the existing 1995 customs law. The new customs law, however, is intended to resolve court jurisdiction issues that held up the issuance of implementing regulations for the ex officio power. Okto said that Indonesia Customs is eager to obtain the new authority, as it will enable customs officers to detain temporarily suspected shipments of pirate or counterfeit goods. He added that Customs has consulted closely with local IP industry representatives on the status of ex officio powers in the draft law, including the American Chamber of Commerce IPR Committee on May 2. The issue was also discussed throughout a May 16-18 USPTO-Indonesia Customs workshop in Jakarta that included presentations and participation by senior Customs officials and IP industry representatives. Okto said that the GOI has set a deadline by the end of this year to enact the new Customs law and accompanying implementing regulations. Other GOI Efforts ----------------- ¶17. (SBU) During their June 21 meeting, Bari informed Katz of several other ongoing IPR related efforts within his office. The Directorate of IPR is cooperating with the Japan International Cooperation Agency (JICA) in conducting 15 IPR public awareness seminars throughout Indonesia this year for officials, academics, students and the press. DG IPR also collaborated with the European Commission-ASEAN IPR Co-operation Program] in holding a May 22-23 workshop in Jakarta on civil and criminal court proceedings. Lastly, DG IPR Abdul Bari Azed on June 6 gave opening remarks at the opening of a BSA representative office in Jakarta. Amcham Members See Improved Enforcement and Cooperation --------------------------------------------- ---------- ¶18. (SBU) At a June 22 meeting with Katz, Amcham IPR Committee members were in agreement that police were improving IPR enforcement and cooperation. An MPA representative said that, for the first time, police were conducting raids on their own initiative and were no longer requiring formal complaints to act. She attributed this to General Sutanto's December 2005 instruction to district police chiefs ordering them to step up IPR enforcement activities, particularly against pirated ODs. The MPA representative noted that Jakarta police raids on Ratu Plaza and Mangga Dua Mall, however, stopped after Indonesia was retained on the Priority Watch List in May, but that police continued raids at other locations across the city. ¶19. (SBU) A representative of a major U.S. cigarette manufacturer said that he has received very good cooperation from police and customs over the last year in seizing large shipments of counterfeit cigarettes. In these cases, customs is able to make seizures without ex officio powers because the counterfeit cigarettes have counterfeit excise stickers that violate Indonesia's tax laws. He added that his company was considering a plan to provide equipment and training to some police units. He noted that one unit he works closely with in the Riau Islands has 70 officers but severely lacks other resources: it has only two vehicles, one telephone line, no internet, and a yearly operating budget of USD 12,000. ¶20. (SBU) A Business Software Alliance (BSA) representative added that police also lack resources to move and properly store cumbersome and sensitive optical disk production machinery seized during raids. Police are scared that if the machinery is damaged while under their custody, the courts may rule that they pay compensation to the owners. Consequently, police customarily seal OD machinery with police tape at factories, and it is often just a matter of days before pirates break the seals move the machinery or simply begin operating again. Comment ------- ¶21. (SBU) The GOI continues to make steady progress on IPR, and high level backing from the Police Chief and Attorney General bodes well. Closer cooperation between the MOI, police and AGO will be important for ensuring effective factory monitoring and greater prosecutions of pirates. Our new senior technical advisors at the MOI and police, and a new Embassy resident legal advisor with considerable IPR JAKARTA 00008114 005 OF 005 experience, should provide valuable new tools for assisting the GOI with these challenges. ¶22. (U) USTR Director David Katz has cleared this cable. SILVER
A separate cable says that “[o]ne of the ICT National Team’s stated objectives is to work towards legalizing all government software, regardless of whether it is open source or licensed.” Here is the full cable:
UNCLAS SECTION 01 OF 03 JAKARTA 000475 SIPDIS SIPDIS SENSITIVE FOR EAP/MTS; EB/TPP/IPE JBOGER COMMERCE FOR 4430/BERLINGUETTE AND PETERS COMMERCE PASS USPTO FOR URBAN AND FOWLER DEPT PASS USTR FOR DKATZ, JGROVES, RBAE, CCOLLEY E.O. 12598: N/A TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], ID [Indonesia] SUBJECT: INDONESIA IPR - ANNUAL SPECIAL 301 SUBMISSION Ref: a) State 07944; b) Jakarta 00011 ¶1. (SBU) Summary: Since Indonesia's upgrade to the Special 301 Watch List in November 2006, the Government of Indonesia (GOI) has continued to make steady progress towards improving its enforcement and protection of intellectual property rights (IPR). A National Intellectual Property (IP) Task Force now holds regular interagency coordination meetings, and President Yudhoyono (SBY) signed a decree in November 2006 committing the GOI to legalize all its computer software. Parliament passed a new Customs Law on November 15 that, when fully implemented, will provide ex officio powers for Customs Officials to seize suspected infringing products. Jakarta Metropolitan Police continue to elicit praise from local and regional International Intellectual Property Association (IIPA) representatives for raids on notorious malls, vendors, distributors and factories. The Ministry of Industry's Optical Disk Factory Monitoring Team (ODFMT) inspected registered factories in November 2006 and February 2007 and issued initial warning letters to some 12 optical disk (OD) factories. The Ministry of Industry (MOI) plans to assign full-time staff to the ODFMT, conduct more regular inspections (including inspections after hours), and begin sanctioning non-compliant factories. A recent Supreme Court ruling in favor of the company Intel in a trademark infringement case case bodes well for future cases. ¶2. (SBU) Summary, continued. Despite these steps, the GOI needs to further improve the operations of the ODFMT and involve the police more closely in the ODFMT's operations. It also needs to step up prosecutions and deterrent convictions of IPR violators and combat book piracy and pharmaceutical counterfeiting. But the GOI is steadily taking ownership over the IPR issue, and our interactions with Indonesia on the issue have grown less confrontational and more collaborative. To further encourage this important U.S. policy success, we recommend that Indonesia remain on the Watch List for the entire 2007 Special 301 regular cycle. End Summary. ¶3. (SBU) In response to Ref A, we reviewed this year's Special 301 submissions from the GOI, IIPA, Intel, PhRMA, and the Phillip Morris Company. In general, we agree with their data, characterizations, and assessments of the state of IPR protection and enforcement in Indonesia. Piracy and counterfeiting rates remain high and, although improving, enforcement remains weak. At the same time, GOI engagement and political will continue to improve and are gaining their own momentum. National IP Task Force Remains Active ------------------------------------- ¶4. (SBU) According to GOI contacts, The National IP Task Force continues hold regularly scheduled quarterly working level meetings, as well less frequent senior and Ministerial-level meetings. At the working level, the Task Force has developed a national IP strategy and strengthened data collection and interagency coordination. However, the lack of a formal budget continues to hamper the Task Force, and it must rely on limited funding from the Ministry of Justice Directorate General for IPR. Nevertheless, the Task Force's regular interagency meetings, particularly those of senior and ministerial level officials, are encouraging greater GOI focus on IPR. Following the first Task Force meeting last year, for example, the Minister of Justice and National Police Chief collaborated in developing a clever, animated TV spot emphasizing the costs of piracy on Indonesia's culture and creative arts. SBY Leads Efforts to Legalize GOI Software ------------------------------------------ ¶5. (SBU) There are other recent examples of growing GOI initiative and high-level political will to improve IPR protection. On November 13, SBY signed a decree establishing an Information Communication Technology National Team. The team consists of academics, business leaders and GOI officials and aims to create an IT regulatory regime that can contribute to economic growth, job creation and poverty alleviation. One of the ICT National Team's stated objectives is to work towards legalizing all government software, regardless of whether it is open source or licensed. Further, the Team will also pursue approaches to cracking down on the use of pirate software in internet cafes, universities and the private businesses. The ICT team will report directly to President SBY and work out of an office at the Ministry of Communication and Information Technology. ¶6. (SBU) Two months after SBY signed the decree, Minister of Communication and Information Sofyan Djalil signed an MOU with PT. Microsoft Indonesia, under which the software maker will help GOI ministries legalize and upgrade their MS Windows products at a significantly discounted price. Although there has been some public JAKARTA 00000475 002 OF 003 criticism of the MOU, including by State Minister for Research and Technology Kusmayanto Kadiman, SBY has stood behind the agreement. PT Microsoft Indonesia President Director Tony Chen recently told us he was "astonished" by the GOI's growing commitment to legalize its software and recommended we encourage the GOI by maintaining Indonesia on the Special 301 Watch List. Customs Law Enacted with Ex Officio Powers ------------------------------------------ ¶7. (SBU) Parliament passed a new Customs Law on November 15, 2006, that, when fully implemented, will provide ex officio powers for Indonesian Customs officials to seize suspected infringing products without a court order. The new law retains ex officio powers that existed in the old law, but also clears up court jurisdictional issues that had blocked their implementation. Indonesia Customs expects to promulgate the new law's implementing regulations, including those pertaining to ex officio powers, by the end of 2007. Jakarta Police Sustaining Enforcement ------------------------------------- ¶8. (SBU) As noted in the GOI's submission, and confirmed by local IIPA representatives, the Jakarta Metropolitan Police have sustained enforcement actions against malls, vendors, distributors and factories of pirated optical discs. Ratu Plaza, Indonesia's most notorious modern market for pirated ODs, has been the subject of repeated raids, and one Motion Pictures Association (MPA) regional representative told us recently that some of Ratu's vendors have given up or moved to other, less-centrally located malls. That same MPA representative described the Jakarta Police's continuing police cooperation as "brilliant" and he too recommended Indonesia remain on the Watch List. Our EEB-funded senior IPR technical advisor has been instrumental in training and encouraging the Jakarta Police to step up their IPR enforcement. Looking forward, the advisor will work to encourage greater police collaboration with the ODFMT and prosecutors, as well as greater police enforcement actions beyond the boundaries of metropolitan Jakarta. Monitoring Team Yielding Some Results ------------------------------------- ¶9. (SBU) As noted in ref b, the ODFMT, with training and planning support from our second EEB-funded advisor, conducted monitoring visits to all registered optical disc factories in November 2006. The MOI subsequently sent 12 warning letters to factories observed to have irregularities. However, the letters highlighted only minor infractions, and there has been little ODFMT follow-up. Although the visits revealed weaknesses in the ODFMT's capacity and security procedures, they also gleaned useful baseline data on the capacity and activities of registered optical disc factories. More importantly, the visits allowed the ODFMT to collect forensic exemplars from a majority of the known production machines in Indonesia's registered factories. The International Federtion of the Phonographic" Industry (IFPI) continus to analyze tthese exemplars in its forensic laboratory in London, and already they are yielding important information. ¶10. (SBU) The ODFMT still requires considerable institution and capacity building to be fully effective. The ODFMT does not have full-time monitors, and relies largely on MOI and Police officials temporarily seconded from other positions. t needs direct support from the police, particulrly if it is tt c"n*duct visits at night and to wlll guarded factories. The ODFMT also needs to impe ment a more credible system of warning and sanctioning factories in violation of laws and regulations. ¶11. (SBU) MOI Director General for Downstream Chemical Industries Benny Wahyudi told us on February 20 that the ODFMT visited seven factories on February 17, and inspected the five that were open and operating. He promised to provide us with the results of those visits as soon as they were compiled. Wahyudi agreed that the Monitoring Team needs at least one full-time staff member. He noted, though, that this person might have to be a contractor, as the MOI did not have a specific budget and position set aside to staff the ODFMT. Wahyudi also agreed that the MOI would need to work closer with the police and develop a more effective system of warning and sanctions. He suggested that the Embassy senior advisor for the ODFMT would be instrumental in helping the MOI address these challenges. Glimmer of Hope in Intel Case ----------------------------- ¶12. (SBU) The Supreme Court's February 1 ruling in favor of Intel in JAKARTA 00000475 003 OF 003 the Intel Jeans case is also a favorable development. In the case, the court cancelled the trademark of a local brand of jeans, Intel Jeans, and ruled that Intel is entitled to trademark protection as a well known brand. The ruling bodes well for the Supreme Court's upcoming decision in the appeal of Intel's Panggung case (the Indonesian firm PT Panggung produces a number of electronics products under the registered trademark "Intel"). While the Commercial Court's previous rulings against Intel in the Panggung case have been setbacks, Intel's legal counsel recently described the case as an aberration in the Commercial Court's otherwise respectable record in handling civil IPR cases, particularly those involving trademarks. Significant Concerns Remain --------------------------- ¶13. (SBU) Despite the clear momentum on IPR issues, there are remaining concerns. Indonesia's record on IPR prosecutions remains poor. Frequent prosecutor rotations, lack of transparency, and corruption make this a daunting task; and high level political will and support will be critical to making headway on IPR convictions and prosecutions. Pharmaceutical counterfeiting and book piracy also remain largely unchecked. GOI officials tell us frequently that they consider pharmaceutical counterfeiting to be a serious health concern for the country, as well as a potential rallying point for greater public support for IPR protection and enforcement. Key GOI officials have endorsed a University of Indonesia study revealing alarming pharmaceutical counterfeiting rates and its high cost to the Indonesian economy. The GOI, however, has yet to effectively engage the pharmaceutical industry on these issues. Book piracy remains rampant in universities and local bookshops. Indonesia has yet to develop an association or other means through which publishers and authors can collect and distribute book royalties. The GOI would very likely welcome U.S. technical assistance in this area. Watch List is the Best Option ----------------------------- ¶14. (SBU) Over the past two years, the combination of a reform-minded government in Indonesia and five regular or out-of-cycle Special 301 reviews has done much to change our interactions with the GOI on IPR issues. GOI leaders are pursuing initiatives to promote IPR that were a only short time ago beyond our expectations. At the same time, our relationships with working level contacts have become much more collaborative, particularly following Indonesia's removal from the Priority Watch List last November. Four months later, although much work remains, the GOI is moving forward on IPR issues largely under its own steam. With the GOI taking increasing ownership of the issue and steadily improving its IPR enforcement and protection, we believe a third consecutive OCR would be counterproductive. Accordingly, Embassy Jakarta recommends strongly that Washington agencies retain Indonesia on the Special 301 Watch List for the 2007 regular Special 301 cycle, with no OCR. HEFFERN
We will cover some more Indonesia cables in a separate post. █