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05BANGKOK1425 SPECIAL 301 REVIEW — EMBASSY RECOMMENDS WATCH LIST FOR THAILAND

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 05 BANGKOK 001425

 

SIPDIS

 

SENSITIVE

 

DEPT FOR EB/IPC SWILSON

DEPT PLS PASS TO USTR JCHOE-GROVES, DOC JBOGER,

USPTO JURBAN, AND LOC STEPP

 

E.O. 12958: N/A

TAGS: ETRD PREL ECON KIPR TH

SUBJECT: SPECIAL 301 REVIEW — EMBASSY RECOMMENDS WATCH

LIST FOR THAILAND

 

REF: A. 2004 BANGKOK 06501

 

¶B. 2004 BANGKOK 04885

 

¶1. (U) Sensitive but Unclassified. Please handle accordingly.

 

¶2. (SBU) Overall IPR protection in Thailand remains woefully

inadequate by any measure. During the past year, however,

the RTG has modestly improved upon its commitments to improve

IPR protection. Minister of Commerce Wattana Muangsuk

initiated an extended anti-piracy campaign in June, and, in

November and December 2004, the Royal Thai Police conducted

dozens of factory and warehouse raids, seizing millions of

pirate ODs and decommissioning several replication machines

used for copyright infringement. The most significant item of

IPR legislation ) the Optical Disk Manufacturing Law ) was

passed by the Parliament in October 2004. Because of these

successes, local industry representatives agree that the

overall IPR enforcement environment has improved slightly

since the beginning of the year ) but much work remains to

be done. The RTG has put other legislative items, such as

Amendments to the Copyright Act and the implementing

regulations for the Trade Secrets Act, on hold pending the

outcome of U.S.-Thai Free Trade Agreement (FTA) negotiations.

Enforcement campaigns are still often linked to timely

political events ) such as the start of FTA talks ) rather

than focused on gradual, sustained reductions. The

proliferation of cable piracy continues to be a major concern

for US rights holders. Nevertheless, most local rights

holders recognize that the IPR situation ) which is, by all

accounts, deplorable ) is no worse than it was last year,

and slightly improved in some areas. Furthermore, urgent

tsunami recovery efforts have diverted some of the RTG’s IPR

 

SIPDIS

protection resources. For these reasons, the Embassy

recommends that Thailand remain on the Watch List.

 

RTG Enforcement Campaign Shows Some Results

 

¶3. (SBU) Under the leadership of Minister of Commerce Wattana

Muangsuk, the RTG initiated a major IPR enforcement campaign

in June 2004. This campaign was sparked by the signing of yet

another Memorandum of Understanding (MOU) between Thai

agencies involved in enforcement efforts, and rights holders

and their representatives. (Note: This MOU, forged between

rights holders and RTG enforcement agencies, is similar to

previous agreements, but details specific obligations to

rights holders, who pledge to cooperate with enforcement

agencies and not to use out of court settlements, and to the

police, who are charged with keeping 36 specified areas free

of pirated goods. The 36 areas are divided into &red8 and

&yellow8 zones, depending on the severity of pirate and

counterfeit retail operations.) The timing of this campaign

was noteworthy, coming just before the opening round of

Thai-U.S. Free Trade Agreement (FTA) talks, and several weeks

before the International AIDS Conference, held in Bangkok,

which brought thousands of government officials, activists,

scientists, and journalists to Thailand.

 

¶4. (SBU) Rights holders acknowledge that IPR enforcement has

improved slightly, and that these enforcement campaigns have

shown long-term progress in some key areas. The focus on the

red and yellow zones has reduced ) though certainly not

eliminated ) retail piracy in many of those areas. Trademark

brand owners and their representatives report increased

cooperation with the police and other enforcement agencies;

as is usually the rule, those brand owners that are most

proactive in protecting their trademarks achieve the greatest

results. In September, Econoff toured four local police

stations with the Secretary to the Commerce Minister, Oratai

Thanajaro, to evaluate progress in improving enforcement in

the red and yellow areas in their jurisdiction. While two of

the four police chiefs were clearly uninterested in cleaning

up retail piracy ) provoking an uncharacteristically heated

argument between Oratai and the police ) the two other

police officials were able to point to measurable successes

in reducing piracy in their jurisdiction. Six months after

this visit, Sukhimvit Road, a major thoroughfare popular with

foreign tourists just a few blocks from the Embassy, is still

largely clear of pirate retailers where before it was the

home of dozens.

 

&Operation Eradicate:8 Major Enforcement Operations

Initiated in Late 2004

 

¶5. (SBU) In October 2004, Royal Thai Police (RTP) Lt. Gen.

Noppadol Somboonsup, currently the Deputy Police Commander

for Legal Affairs, was reappointed head of IPR suppression

operations. Soon after taking on this assignment, Gen.

Noppadol and police enforcement teams launched &Operation

Eradicate,8 an initiative directed at factories and large

warehouses. He conducted a raid on a factory in the Eastern

Seabord Industrial Zone, in Rayong Province, seizing one

optical disk replicating line, one printing machine, one ton

or polycarbonate, and 6000 pirated VCDs and CDs. In addition,

the police arrested two Taiwanese nationals, two Burmese, and

one Thai. At the same time, the police raided a warehouse

owned by a connected company in Bangkok and seized 100,000

pirated DVD/VCD/CDs. This combined factory/warehouse raid )

the first since Gen. Noppadol ended his last tenure as IPR

enforcement czar in 2002 ) netted ODs and equipment

estimated at 70 million THB (almost 2 million USD). In

December 2004, Gen. Noppadol and his team again raided a

production facility in a province near Bangkok, seizing 100

CD-R burners, each with a capacity of burning 8000 CD-R disk

per day, and 5000 pirated music CDs. Gen. Noppadol has

invited Embassy officers to accompany him and his officers on

future raids, and we intend to take him up on his offer. (A

note on organized crime: Multinational organized crime has

always been present in the vice trade in Thailand, and since

IPR violations are treated less harshly than drug smuggling,

it is no surprise that foreign criminal gangs appear to be

involved.)

 

¶6. (SBU) Another police Special Task Force appointed by Prime

Minister Thaksin, led by Col. Adul Narongsak, conducted

several raids in and around Bangkok in late 2004. Two major

raids on November 30 netted over 1,000,000 pirated CDs and

DVDs, two replicating lines, and three printing machines. Two

weeks later, these teams raided 17 spots in Bangkok, netting

over 1 million pirated ODs, one replicating line, and two

printing machines. A coordinated raid on the notorious pirate

retailing center, Panthip Plaza, yielded no pirated goods

after a complete search of the premises. (Note: This last

raid underscores the unusual difficulties ) even when raids

are coordinated by motivated authorities ) in shutting down

piracy at Panthip.) The police and other law enforcement

teams ) including teams from the border control police )

conducted further raids throughout the month. According to

Department of Intellectual Property statistics, the RTG

seized over 800,000 ODs in 2004, and arrested 5179 persons.

The Central Investigation Division, under the leadership of

Maj. General Jurumporn Suramani, has also initiated a number

of anti-piracy raids on copyright infringers, earning the

praise of rights holders.

 

¶7. (SBU) Disappointing to rights holders, however, is the

Department of Special Investigations (DSI), which was to take

over responsibility for fighting IP crime from the Economic

Crimes Investigation Division (ECID) and other branches of

the Royal Thai Police (RTP). Although it has been up and

running for over a year, the DSI still lacks significant

personnel, resources, and direction to take on this task. In

addition, a recent administrative decision to divide IPR

crime investigative responsibilities between the ECID and the

DSI ) which gives DSI the right to investigate crimes valued

upwards of 5 million THB ($125,000) ) has created some

confusion in IPR circles. Still not clear is how this amount

will be valued ) street value? retail value? ) or, if even

this division of labor truly exists, since DSI seems to be

doing little in the way of IPR enforcement.

 

Tsunami Tragedy Will Put Some Enforcement Operations on Hold

 

SIPDIS

 

¶8. (SBU) The December 26, 2004 tsunami devastated large

swaths of Thailand’s western coastline and caused over 9000

fatalities. In the days following the tsunami, Thailand’s

security and police forces and government agencies focused

all of their attention in assisting those in need, restoring

a degree of normalcy, and launching reconstruction

initiatives. In Phuket and other places hard hit by the

tsunami, police are still devoted to efforts supporting

 

SIPDIS

reconstruction work, leaving few personnel able to return to

IPR enforcement. Most significantly, Gen. Noppadol was tapped

to oversee the multinational Thailand Tsunami Victim

Identification effort, which is now striving to locate,

identify and repatriate, where necessary, the thousands of

victims. This immense and unprecedented ) and extremely

sensitive — task will take many months to sort out, making

it unlikely that Gen. Noppadol and some of his staff will

return to IPR enforcement activities in the near term.

 

IP Court and RTP Not Working Together

 

¶9. (SBU) Rights holders ) and the RTP ) have both expressed

concern with the search warrant application procedures of the

International Trade and Intellectual Property Court (IP

Court), reporting that some judges have set arbitrary

guidelines and standards for the issuance of search warrants.

In addition, rights holders remain unsatisfied with IP Court

judgments, which they claim are too lenient and do not

provide a sufficient deterrent. IP Court judges have

acknowledged the problems with search warrants, and are in

the process of designing guidelines for the approval of

search warrant applications. Court judges have reported to

Econoff that the police often do not follow proper procedures

in requesting, and carrying out, search warrants (a complaint

echoed by rights holders). Court judges have also said that

police sometimes are not familiar enough with the cases they

bring forward to answer basic questions about the warrant

request, and do not report the results of the search to the

Court afterwards, as required. (This last point is

significant because police are often suspected to use search

warrants to extort money from violators instead of executing

the warrant.) No matter who is at fault, this kind of basic

conflict hinders rights holders in their efforts to quickly

pursue enforcement actions.

 

Legislation: OD Law Passes, but FTA Intervenes

 

¶10. (SBU) The RTG has moved forward to pass legislation

crucial to IP protection efforts. Introduced to the

Parliament in August 2003, the Optical Disk Manufacturing Law

passed both houses on Parliament in October 2004. While this

legislation is not as strong as many rights holders would

have liked ) this draft does not provide for a licensing

system for replication machines, introduce SID codes, or

incorporate &sufficiently deterrent8 penalties ) it will

still enhance the powers of the Department of Intellectual

Property (DIP) and the RTP to monitor and enforce IPR

violations. In late January 2005, a group of Senators

petitioned the Constitutional Court to review a provision

that allowed for the seizure of a replication machine when

manufacturers fail to notify the DIP about the acquisition,

transfer, or movement of a machine. These Senators were

concerned that the penalties for violating an administrative

provision ) making it a criminal offense subject to

forfeiture of the equipment — were too extreme. Arguing that

these penalties violate constitutional rights to the use of

private property, the Constitutional Court removed these

provisions from the legislation. Violators of these

provisions still face fines, however, and proven copyright

violators will, under this law, have their machines seized.

In a February 25 meeting with Econoffs, DIP DG Kanissorn

Navanugraha said that this act, which he believes will

bolster their enforcement powers considerably, will be signed

into law within two months.

 

¶11. (SBU) Amendments to the Copyright Act, which have

undergone several reviews by a government-led committee —

which includes an IP industry representative ) have passed

the juridical council and the Cabinet. However, RTG officials

have said that further revisions and legislative reviews of

this Amendment will await the outcome of the ongoing FTA

negotiations. The Thai Food and Drug Administration (FDA) has

finished drafting implementing regulations for the Trade

Secrets Act, and, in December 2004, invited stakeholder

 

SIPDIS

groups ) such as local and foreign pharmaceutical companies

— to comment on the proposed draft. Multinational

pharmaceutical companies have objected to the proposed 2-year

data exclusivity provisions, but FDA officials and

scientists, some local pharmaceutical manufacturing

companies, and many vocal NGOs oppose extending the

protection period. However, the Secretary-General of the FDA,

Dr. Phakdee Photsiri, has said that these provisions will

also be subject to negotiation in the FTA talks. On April 28,

2004, the Geographical Indications Act came into effect,

completing Thailand’s adherence to TRIPS legal obligations.

 

Cable Piracy: Still a Problem

 

¶12. (SBU) The past year has seen very little movement towards

establishing some kind of order in the cable television

industry. Pirate cable operations continue to proliferate,

mounting a significant challenge to U.S. content providers.

One of the major hurdles in correcting this problem is the

lingering controversy over the selection of the National

Broadcasting Commission (NBC), which, as outlined in the

Telecommunications Business Act of 2001, would regulate the

cable industry. (Note: Civil society activists and industry

representatives have clashed over the qualifications of the

selection committee members; a similar conflict over its

counterpart body, the National Telecommunications Commission,

ended in late 2003.) Currently, neither the Public Relations

Department (PRD), which currently has responsibility for

overseeing the cable industry, nor the DIP, which has

authority over copyright matters, has been willing ) or able

— to take on this issue until the NBC is formed.

 

¶13. (SBU) In the meantime, Prime Minister Thaksin appointed

his Deputy Secretary-General, Squadron Leader Sita Divari, to

organize the various licensed and unlicensed cable providers

into the Channel 11 framework that was originally proposed in

November 2003. (This plan would put all cable providers under

the supervision of state-owned Channel 11, which would hold

and administer licenses with content providers on behalf of

the providers as a stopgap measure.). Several deadlines for

implementing this plan have come and gone ) the most recent

was October 15 ) and it is not at all clear when or if RTG

officials will take on this formidable problem.

 

The Bright Side: Thai Customs

 

¶14. (SBU) Rights holders and representatives report that Thai

Customs has been especially proactive in seizing infringing

goods at Thai ports of entry. Although no statistics are

available, rights holders report that Thai Customs agents

call with increasing frequency to examine suspect shipments

containing a wide array of products ) brand name clothes,

car parts, shoes, cell phones and parts, and other items.

Rights holders note that while these interdictions have

focused mostly on imports, Thai Customs has begun to inspect

outgoing shipments as well, where specific information on

infringing goods is available.

 

Training, Technical Assistance, and Public Education

 

¶15. (SBU) Over the past year, the USG has provided technical

assistance and capacity building training for a number of RTG

departments and agencies. In October 2004, Econoff and Legatt

Adviser arranged a digital video conference between a U.S.

federal judge in Hawaii and 15 judges from the IP Court to

discuss sentencing options in IPR convictions. The Embassy is

currently in the process of administering a $265,000 grant

from NAS directed at improving IPR enforcement in the Thai

Customs Department. USG Customs and Border Protection

officials have already conducted the first phase of this

program ) a thorough needs assessment ) in November 2004,

and will begin to implement the training, technical

assistance, and capacity building elements of the plan in

mid-2005. In addition, the Embassy plans to purchase an

optical disk forensic testing kit for the Thai police, which

will be under the supervision of Gen. Noppadol and the police

forensic labs. This forensic kit was developed by the

International Federation of Phonographic Industries (IFPI) in

London, and works on the same principles as ballistic

testing: each OD mould leaves unique errors and

characteristic marks which can be used to trace the

manufacturing origins of pirated ODs around the world. This

technology will be extremely useful for producing evidence

leading to increased factory raids. While the USG, through

the Bangkok NAS office, will provide the funds (an estimated

$80,000), IFPI has agreed to set up and install this kit, and

provide all necessary training. This technology has already

been used successfully by the Malaysian and Hong Kong police

to locate and raid factories producing pirated ODs.

 

¶16. (SBU) In addition to organizing two major IP Thailand

exhibitions — which serve to promote the idea of IP to

investors, inventors, manufactures and others — DG Kanissorn

plans to initiate a “No Fakes” certification campaign modeled

on a similar initiative in Hong Kong. In coordination with

retailers and rights holders, this campaign would promote

outlets that sell only genuine items and, at the same time,

build public awareness about IPR protection.

 

The Panthip Plaza Accords

 

¶17. (SBU) The owner of the notorious Panthip Plaza, the

Sirivadhanabhakdi Group (SG) is also the owner of a number of

high-end hotels in Thailand often used by US Embassy

personnel and agencies for TDY visits and events. In February

2003, Panthip Plaza,s resilience as the center of pirate

retailing in Bangkok led the Embassy to take the unusual step

of initiating a commercial boycott of these hotels for all

official purposes. In the following months, Econoffs used

this leverage to engage with SG and the Panthip management on

reducing infringement at their property, with few results.

The Panthip management claimed that they inherited several

dozen tenants with 30-year leases from the previous owners,

preventing them from ejecting shopowners selling pirated

products. In November 2004, the new management of one of

SG,s premier hotels, the Plaza Athenee, sought to end this

impasse and compete again for US Embassy business at their

property. At the suggestion of the Embassy, the management

offered to install closed circuit security cameras throughout

the property in order to discourage overt illegal activity

and to provide rights holders with concrete evidence to be

used in law enforcement actions. As a result of this offer,

and with the cooperation of SG and the Panthip management,

the Embassy agreed to rescind the boycott. We expect the

cameras to be operational by March 2005. While we don’t see

the cameras as a panacea, they are a modest step forward in

that they serve as a deterrent — some customers will think

twice about being recorded on film performing an illegal act,

so transactions will have to be done surreptitiously, e.g.,

in bathrooms, making pirated DVD sales more akin to drug

deals. The hope is that, given these conditions, many

potential customers will choose to stay away.

 

Comment

 

¶18. (SBU) Comment: Despite the ups and downs throughout the

year, overall, IP enforcement is somewhat better now that it

was a year ago. The RTG,s efforts to target enforcement

actions on the most visible and profitable pirate retailing

centers have largely reduced the most egregious markets for

pirated and counterfeited goods. Enforcement actions in the

last few months of 2004 have yielded impressive numbers of

infringing goods and replicating machinery. Similarly, on the

legislative side, the OD manufacturing bill will soon become

law. While weaker than the IP industry wants, it is still the

most effective tool the RTG has at its disposal to address OD

infringement. In addition, FTA negotiations are soon to be

our best forum to take up USG concerns over the Trade Secrets

Act regulations and the Copyright Amendment; we believe the

RTG can make concessions in the FTA context that would be

otherwise difficult. The IIPA 2005 Special 301 Report for

Thailand is accurate in many of its details, and provides an

excellent inventory of the problems rights holders face here.

However, the evidence, as evinced in the IIPA report and

elsewhere, does not in our view support the call to upgrade

Thailand to the Priority Watch List. All local rights holders

agree that IPR protection has improved in one way or the

other, and in no area has the situation deteriorated from

where it was this time last year. We are also mindful of the

fact that significant IPR protection resources have been

diverted to urgent tsunami recovery efforts, something we are

reluctant to criticize, even implicitly. In view of these

considerations, Embassy recommends that Thailand be kept on

the Watch List.

BOYCE

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Written by thaicables

August 26, 2011 at 5:36 am

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