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Cable reference id: #07SAOPAULO1001
“All of them, those in power, and those who want the power, would pamper us, if we agreed to overlook their crookedness by wilfully restricting our activities.” — “Refus Global“, Paul-Émile Borduas

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VZCZCXYZ0026 OO RUEHWEB DE RUEHSO #1001 3551359 ZNY CCCCC ZZH (CCY ADDED CAPTION AD04181F2 MSI3697 508) O 211359Z DEC 07 FM AMCONSUL SAO PAULO TO RUEHC/SECSTATE WASHDC IMMEDIATE 7773 INFO RUEHBR/AMEMBASSY BRASILIA IMMEDIATE 8916 RUEAWJF/DEPT OF JUSTICE WASHDC IMMEDIATE RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
Hide header C O N F I D E N T I A L SAO PAULO 001001 SIPDIS SIPDIS (C O R R E C T E D C O P Y: ADDED SIPDIS CAPTION) E.O. 12958: DECL: 12/20/2017 TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], ECIN [Economic Integration and Cooperation], PREL [External Political Relations] SUBJECT: MICROSOFT SEES GOB ATTACKS AGAINST IPR Classified By: Econ/Pol Chief James Story for reasons 1.5 b and d. ¶1. (C) SUMMARY: In a December 20 meeting in Sao Paulo with Ambassador Sobel, Microsoft Brazil President Michel Levy stated that current GOB policies are antagonistic towards Intellectual Property Rights (IPR). According to Levy, the GOB through the Foreign Ministry (Itamaraty) has mounted an international campaign to discredit Microsoft's proprietary XML format and is pushing for countries to adopt the ODF (Open Document Format) at the expense of XML at the March meeting of the International Standards Organization in Geneva. Levy sees both ideological issues as well as commercial interests at work in the GOB position. END SUMMARY. ¶2. (C) Microsoft Brazil President Michel Levy requested a meeting with Ambassador Sobel on December 20 to discuss ways forward on working with what he characterized as an antagonistic GOB. According to Levy, Itamaraty has pressured the purportedly independent Brazilian Technical Standards Agency, ABNT to adopt a more aggressive posture against using XML as one of two possible standards, along with ODF, in Brazil. In addition, Levy stated that he is in the possession of unsigned letters from Itamaraty to various foreign governments requesting that the governments work together to support only the open source ODF as the international standard. ¶3. (C) Levy believes that this issue has turned ideological and is a manifestation of anti-Americanism within Itamaraty. He cited President Lula's Chief of Staff Dilma Rousseff as well as high-ranking advisor Celso Alvarez as being the chief architects of an anti-IPR, anti-royalties strategy within the GOB. According to Levy, these advisors have convinced President Lula that there is no difference between ODF and proprietary XML software. His main concern is that the GOB will use the ABNT to adopt an ODF only standard by decree rather than going through Congress where Microsoft would at least have an opportunity to explain the differences between the software systems. Levy used as an example that all of Embraer's designs are created through XML and that the current ODF software simply can't do the same job. If ODF is the only standard, Levy argued, there could be economic ramifications for Brazil. ¶4. (C) Levy then pointed out that commercially Microsoft faces an uneven playing field in Brazil. He stated that in addition to several bills in the Brazilian Congress that would deny the GOB the ability to buy proprietary software, there are reports that many recent bids that went to tender had specific, if unwritten, instructions that disallowed any Microsoft bids. He further stated that the issue of cross-retaliation on IPR from the cotton subsidies case is alive and well and could potentially come to pass in 2008. ¶5. (C) While Levy made it clear that Microsoft is not asking for any USG advocacy at this point, and in fact requested that our communication be kept strictly confidential, Ambassador Sobel did offer advice on various SIPDIS approaches Microsoft could take in generating support for standards that would have room for both ODF and XML software. Specifically, the Ambassador thought Mircosoft should work through various trade groups to begin a discussion with the GOB on this issue. The Ambassador also indicated that Microsoft should get Brazilian companies to put this issue high on the agenda of the CEO Forum meetings to take place with Department of Commerce Secretary Gutierrez early next year. ¶6. (C) COMMENT: The debate among various international standards (GPS, telecommunications, etc.) is not new in Brazil, and Levy's concerns about an anti-American ideology in the Brazilian Foreign Ministry are not only Microsoft's concern. Microsoft's concerns that the GOB is seeking to adopt one standard that does not allow for proprietary softwear, bears watching. A multi-industry push for a strategy that allows for Congressional debate over the relative merits of the software systems will certainly yield better results than Microsoft fighting this issue alone. END COMMENT. WHITE

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