Identifier
Created
Classification
Origin
03ROME834
2003-02-28 05:45:00
UNCLASSIFIED
Embassy Rome
Cable title:  

MISSION ITALY INPUT FOR 2003 SPECIAL 301 REVIEW

Tags:  KIPR ECON ETRD IT 
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UNCLAS SECTION 01 OF 02 ROME 000834 

SIPDIS

DEPT FOR EB/IPC WILSON,
DEPT PLS PASS TO USTR ALVAREZ, DOC LASHLEY, USPTO URBAN,
LOC TEPP
USDOC FOR 4220/MAC/EUR/SED/DDEFALCO

E.O. 12958: N/A
TAGS: KIPR ECON ETRD ECON ETRD IT ITKIPR
SUBJECT: MISSION ITALY INPUT FOR 2003 SPECIAL 301 REVIEW
UNCLASSIFIED

PAGE 02 ROME 00834 01 OF 02 280639Z

REF: A. SECSTATE 43684

B. 02 ROME 844

UNCLAS SECTION 01 OF 02 ROME 000834

SIPDIS

DEPT FOR EB/IPC WILSON,
DEPT PLS PASS TO USTR ALVAREZ, DOC LASHLEY, USPTO URBAN,
LOC TEPP
USDOC FOR 4220/MAC/EUR/SED/DDEFALCO

E.O. 12958: N/A
TAGS: KIPR ECON ETRD ECON ETRD IT ITKIPR
SUBJECT: MISSION ITALY INPUT FOR 2003 SPECIAL 301 REVIEW
UNCLASSIFIED

PAGE 02 ROME 00834 01 OF 02 280639Z

REF: A. SECSTATE 43684

B. 02 ROME 844


1. SUMMARY: MISSION ITALY RECOMMENDS THAT ITALY REMAIN ON
THE 301 WATCH LIST. OVERALL FREQUENCY OF COPYRIGHT PIRACY HAS
LEVELED OFF OR FALLEN SLIGHTLY SINCE 2000, WHEN ITALY'S NEW
COPYRIGHT LAW WAS ENACTED. NONETHELESS, TOTAL LOSSES DUE TO
PIRACY ARE MOUNTING AND ITALY'S PIRACY AND COUNTERFEITING
RATES REMAIN AMONG THE HIGHEST IN WESTERN EUROPE. LAW
ENFORCEMENT IN SOME CITIES IS AGGRESSIVE. OFTEN, HOWEVER,
THEY ARE OUTPACED BY ORGANIZED CRIME NETWORKS THAT USE NEW
COPYING AND COUNTERFEITING TECHNOLOGIES AND DISTRIBUTION
MODALITIES TO EVADE THE LAW. TENACIOUS PROBLEMS REMAIN
REGARDING THE JUDICIARY, CERTAIN MUNICIPAL LEADERS, AND THE
SIAE (ITALY'S COPYRIGHT ROYALTY COLLECTION AGENCY).
END SUMMARY.


2. THE IPR SITUATION IN ITALY IMPROVED ONLY SLIGHTLY IN
2002, WITH PIRACY LEVELS REMAINING THE SAME IN MOST SECTORS
ACCORDING TO THE INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE
(IIPA). THE ENACTMENT OF THE 2000 COPYRIGHT LAW IN SEPTEMBER
2001 RAISED CRIMINAL PENALTIES AND LED TO INCREASED AWARENESS
AMONG LAW ENFORCEMENT OFFICIALS AND THE PUBLIC THAT PIRACY IS
A CRIME. 2002 HAS BEEN AMONG THE BEST YEARS FOR PIRACY
ENFORCEMENT IN ITALY. FIFTEEN HUNDRED PEOPLE WERE ARRESTED
AND 2 MILLION CDS WERE SEIZED. HOWEVER, MOST OF THOSE
ARRESTED WERE IMMEDIATELY RELEASED. ALMOST ALL OF THOSE
SENTENCED RECEIVED NO MORE THAN SIX MONTHS AND SERVED NO TIME
IN JAIL. OF MANY RECENT RAIDS, ONE IN NOVEMBER 2002 SHUT
DOWN AN INTERNET PIRACY RING WITH REVENUES OF 60 MILLION USD
UNCLASSIFIED

PAGE 03 ROME 00834 01 OF 02 280639Z
PER YEAR. THE RING WAS PIRATING A LARGE VARIETY OF ITEMS
SUCH AS CAD SOFTWARE WITH A RETAIL VALUE OF 20,000 USD PER
TITLE. MORE ARRESTS HAVE STEMMED CERTAIN FORMS OF PIRACY,
PARTICULARLY IN CITIES WHERE THE MAYORS AND PREFECTS SUPPORT
POLICE EFFORTS. BUT PIRATES ARE ALSO TAKING ADVANTAGE OF
NEW, MORE DISPERSED DUPLICATION TECHNOLOGIES AND DISTRIBUTION

NETWORKS WHICH ARE LESS VULNERABLE TO POLICE SEIZURES.


3. ENFORCEMENT VARIES FROM CITY TO CITY, DEPENDING UPON
MUNICIPAL OFFICIALS. FOR EXAMPLE, THE MAYOR AND PREFECT IN
ROME HAVE BEEN UNWILLING TO ALLOW POLICE TO ACT AGAINST
STREET VENDORS OF PIRATED MATERIAL. AS A RESULT, SUCH STREET
SALES HAVE CONTINUED UNIMPEDED. OFFICIALS IN CERTAIN CITIES
HAVE ATTEMPTED TO STOP LOCAL CARABINIERI FROM ACTING. ON THE
OTHER HAND, TRIESTE CITY OFFICIALS HAVE BEEN VERY SUPPORTIVE.
AS A RESULT, IN THAT CITY, STREET VENDORS OF PIRATED
MATERIAL HAVE ALMOST DISAPPEARED AND PIRACY RATES ARE
EXTREMELY LOW.


4. PROSECUTORS AND JUDGES VARY IN QUALITY AS WELL. MOST
PROSECUTORS ARE UNWILLING TO BRING CRIMINAL CHARGES AGAINST
STREET VENDORS, FACTORY WORKERS OR SHOP WORKERS. JUDGES ARE
USUALLY UNWILLING TO CONVICT, ARGUING THAT "MINOR" ECONOMIC
CRIMES DO NOT JUSTIFY CRIMINAL TREATMENT.

USE / PROCUREMENT OF GOVERNMENT SOFTWARE
--------------


5. WE HAVE RECEIVED NO COMPLAINTS/INFORMATION REGARDING
GOVERNMENT USE OF PIRATED SOFTWARE.

UNCLASSIFIED

PAGE 04 ROME 00834 01 OF 02 280639Z

LEGISLATION
--------------


6. ITALY AMENDED THE IMPLEMENTING REGULATIONS TO THE 2000
COPYRIGHT LAW IN EARLY 2003 TO PERMIT ROUTINE EXEMPTIONS FROM
THE SIAE STICKER FOR BUSINESS SOFTWARE. THE ITALIAN
PARLIAMENT APPROVED THE 2001 EU DIRECTIVES OMNIBUS BILL,
WHICH DELEGATED AUTHORITY TO THE GOI TO INTEGRATE EU RULES
GOVERNING COPYRIGHT INTO THE ITALIAN LEGAL CODE. IN 2002 THE
ITALIAN GOVERNMENT PASSED LEGISLATION, INITIATED BY THE
MINISTRY OF INDUSTRY, WHICH CALLS FOR THE CREATION OF A DOZEN
NEW SPECIALIZED ADMINISTRATIVE AND CIVIL IPR COURT SECTIONS,
ALLOCATES FIVE MILLION EURO TO THE MODERNIZATION OF THE
ITALIAN PATENT AND TRADEMARK OFFICE, AND CLEARS THE WAY FOR
THE RATIONALIZATION OF ITALY'S PATENT AND TRADEMARK LAW. THE
COMING YEAR WILL TELL WHETHER THESE INITIATIVES WILL BE
EFFECTIVELY IMPLEMENTED.

SIAE: WHERE DO THE COLLECTIONS GO?
--------------


7. WE REMAIN CONCERNED BY THE INEFFECTIVE ANTI-PIRACY
EFFORTS OF SIAE, THE COPYRIGHT ROYALTY COLLECTION ENTITY.
IPR INDUSTRIES ARE WORKING INTENSIVELY -- WITH ACTIVE SUPPORT
FROM EMBASSY ROME AND CONSULATES MILAN, NAPLES AND FLORENCE

UNCLASSIFIED

UNCLASSIFIED PTQ7210

PAGE 01 ROME 00834 02 OF 02 280639Z
ACTION EB-00

INFO LOG-00 AGRE-00 AID-00 AMAD-00 CEA-01 CIAE-00 COME-00
CTME-00 DINT-00 DODE-00 ITCE-00 DOTE-00 SRPP-00 EXME-00
EUR-00 E-00 FAAE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 ITC-01 LAB-01 LOC-01 L-00 VCE-00
AC-01 NSAE-00 NSCE-00 OES-00 OMB-01 OPIC-01 PA-00
PRS-00 ACE-00 SP-00 SSO-00 SS-00 STR-00 TEST-00
TRSE-00 USIE-00 DRL-01 G-00 SAS-00 /009W
-------------- 3CCCEC 280639Z /38
O 280545Z FEB 03
FM AMEMBASSY ROME
TO SECSTATE WASHDC IMMEDIATE 8502
INFO EU MEMBER STATES COLLECTIVE
AMCONSUL FLORENCE
AMCONSUL MILAN
AMCONSUL NAPLES

UNCLAS SECTION 02 OF 02 ROME 000834

SIPDIS

DEPT FOR EB/IPC WILSON,
DEPT PLS PASS TO USTR ALVAREZ, DOC LASHLEY, USPTO URBAN,
LOC TEPP
USDOC FOR 4220/MAC/EUR/SED/DDEFALCO

E.O. 12958: N/A
TAGS: KIPR ECON ETRD ECON ETRD IT ITKIPR
SUBJECT: MISSION ITALY INPUT FOR 2003 SPECIAL 301 REVIEW

UNCLASSIFIED

PAGE 02 ROME 00834 02 OF 02 280639Z
-- TO IMPROVE ENFORCEMENT AND EDUCATION. SO FAR, SIAE HAS
BEEN MORE AN OBSTACLE THAN AN ALLY.


8. IN ACCORD WITH ARTICLE 11 OF THE 2000 COPYRIGHT LAW, SIAE
IS RESPONSIBLE FOR ANTI-PIRACY EFFORTS IN ITALY. BECAUSE
SIAE RECEIVES ALL REVENUES FROM ITS STICKER, WHICH IS
REQUIRED FOR COPYRIGHTED MATERIALS UNDER THE LAW (WITH THE
EXCEPTION OF BUSINESS SOFTWARE),IT HAS ADEQUATE RESOURCES
FOR THESE EFFORTS. HOWEVER, SIAE APPEARS TO DIRECT ITS
EFFORTS SOLELY AT INSPECTING LEGITIMATE COPYRIGHTED GOODS TO
ENSURE THAT THESE CARRY A SIAE STICKER. SIAE HAS DONE
NOTHING, TO OUR KNOWLEDGE, TO ACT AGAINST ILLEGALLY PRODUCED
COPYRIGHTED GOODS.


9. INDUSTRY AND EMBASSY EFFORTS AT IPR EDUCATION AND
ENFORCEMENT, WHILE EXTENSIVE, ARE NOT ENOUGH. OUR COMBINED
EFFORTS HAVE IMPROVED THE SITUATION, PARTICULARLY WITH LAW
ENFORCEMENT AND, IN SOME CASES, WITH THE JUDICIARY. HOWEVER,
SIAE HAS THE NATIONAL RESPONSIBILITY AND THE RESOURCES. WE
HAVE PRESSED SIAE TO INVOLVE ITSELF IN EDUCATION AND
ENFORCEMENT EFFORTS, BUT HAVE SEEN NO ACTION YET.

WIPO TREATIES
--------------


10. ITALY HAS NOT YET RATIFIED THE 1996 WIPO COPYRIGHT
TREATY NOR THE WIPO PERFORMANCE AND PHONOGRAMS TREATY.

OPTICAL MEDIA PIRACY (CDS, VCDS, DVDS)
--------------

UNCLASSIFIED

PAGE 03 ROME 00834 02 OF 02 280639Z

11. OVER THE PAST YEAR, THE LEVEL OF PIRACY HAS REMAINED
ALMOST UNCHANGED, BUT THE METHOD OF PIRACY HAS CHANGED FROM
LARGER VENUES TO SMALL-SCALE OPERATIONS USING COMMERCIAL CD-R
BURNERS. PIRACY ACCOUNTS FOR AN ESTIMATED 23 PERCENT OF THE
OVERALL MARKET IN ITALY, AND 50 PERCENT IN THE SOUTH OF
ITALY. BURNED DVDS ARE QUICKLY REPLACING PIRATED VIDEOS. THE
ESTIMATED LOSS TO THE U.S. MOTION PICTURE INDUSTRY DUE TO
AUDIOVISUAL PIRACY IN ITALY IS ESTIMATED TO BE 140 MILLION
USD. DVD PIRACY IS EXPECTED TO GROW IN 2003, REQUIRING
GREATER VIGILANCE BY THE POLICE AND DETERRENT SENTENCES BY
THE COURTS. ILLEGAL IMMIGRANTS ARE OFTEN EMPLOYED TO SELL
THE PIRATED GOODS ON STREET CORNERS THROUGHOUT ITALY. THERE
HAS BEEN INCREASED MEDIA COVERAGE OF THE ISSUE, AND JUDGES
ARE BEGINNING TO HAND DOWN SERIOUS SENTENCES FOR PIRACY.

COMMENT
--------------


12. THE IIPA RECOMMENDS THAT ITALY REMAIN ON THE WATCH LIST.
IPR INDUSTRY REPRESENTATIVES HERE SHARE THAT ASSESSMENT. WE
AGREE. AS ITALY BEGINS TO IMPLEMENT ITS TOUGH COPYRIGHT LAW,
THE SITUATION IS IMPROVING, BUT MUCH REMAINS TO BE DONE. WE
NEED TO KEEP OUR MARKER DOWN AND VISIBLE. END COMMENT.
SEMBLER

UNCLASSIFIED

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2003ROME00834 - Classification: UNCLASSIFIED