DVD PIRACY: AN INCREASINGLY SERIOUS PROBLEM IN

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SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PINR ECON ETRD KCRM EI
SUBJECT: DVD PIRACY: AN INCREASINGLY SERIOUS PROBLEM IN
IRELAND

REF: STATE 58065


1. (SBU) Summary: Despite strong domestic IPR legislation,
DVD piracy is on the rise in Ireland, a problem that judicial
leniency in IPR court cases has made difficult to combat.
The counterfeit DVD market is now reportedly 1.5 times the
size of the legitimate market, with counterfeiters earning
euro 60 million annually, according to entertainment industry
and police sources. Crime families among the Travellers, an
ethnic Irish community living mainly out of mobile homes, run
the major DVD pirating operations in Ireland. The police
have been active in raiding counterfeiting operations and
open-air DVD markets, but are frustrated by weak judicial
penalties given to IPR violators, often just several hundred
euro. To combat burgeoning DVD piracy and to strengthen
penalties, Justice Minister Michael McDowell on May 5
unveiled a Government inter-departmental working group to
liaise with the entertainment industry. Representatives of
U.S. studios wish to give the working group a chance to act
against IPR violations before deciding whether to make a
"Special 301" submission for Ireland. Post intends to offer
USG IPR training courses to Irish judges, whose tepid
response to piracy runs counter to Irish aspirations for a
vibrant domestic film industry and, more broadly, for a
knowledge-based economy. End summary.

DVD Piracy on the Rise
--------------


2. (SBU) DVD piracy is an increasingly serious problem in
Ireland, notwithstanding strong domestic IPR legislation,
according to entertainment industry and police sources. In
terms of volume, the counterfeit DVD market is 1.5 times the
size of the legitimate market, emboffs were told by the Irish
National Federation Against Copyright Theft (INFACT),a lobby
funded by the Motion Picture Association (MPA) Europe.
INFACT also claimed that DVD pirates earn roughly euro 60
million annually, at a cost of euro 115 million to the
legitimate DVD industry. Separately, the Irish police
informed emboffs that they had seized 173,468 pirated DVDs in
2005, an increase of 43,468 over 2004. Already in 2006,
police have confiscated roughly 40,000 pirated DVDs. The
police believe that DVDs have replaced clothing as the most
popular counterfeit items in Ireland, due to the ease of
manufacturing, the relatively small amount of storage space
required, and high profitability.

Travellers: The Major Pirates
--------------


3. (SBU) Crime families among the Travellers, an ethnic
Irish nomadic community living mainly out of mobile homes,
run the major DVD pirating operations in Ireland, according
to the police and INFACT. Two Traveller families work in
Ireland's northern border areas, a third family dominates the
Midlands, and a fourth family runs the Tralee/Galway market
in western Ireland. The Dublin market is controlled not by
one family, but rather several Traveller individuals. INFACT
estimates that roughly 500 pirates among the various families
supply the Irish market. Police told emboffs that the
Travellers usually secure a master copy of a DVD or CD, often
either from the United States or Thailand, and produce
counterfeit copies in bulk. They then sell the pirated items
at over 600 open-air markets and smaller street-side venues,
from car trunks, and, more recently, door-to-door. Pirated
DVDs sell for euro 5-10, as compared with the euro 20-25
price of legitimate DVDs and daily DVD rentals of euro 4-5.



Police Response
--------------


4. (SBU) The police conduct raids nearly every weekend in
markets across Ireland, according to Detective Sergeant
Martin Mooney of the National Bureau of Criminal
Investigation (NBCI) anti-racketeering unit, which has lead
responsibility for enforcing IPR law. Mooney did not have
year-end figures for 2005, but he told emboffs that his unit
was involved in 1,000 raids in 2004, as opposed to 48 in

2002. He noted that his unit consisted of three sergeants,
including himself, and nine guards - two more guards than
last year, reflecting growing concern about IPR violations.
The most common targets of police raids are the large
Tullamore and Clara markets in the Midlands county of Offaly,
where pirated goods with a market value between euro 250 and
1,000 are regularly confiscated. Mooney said that his unit
coordinated regularly with local police, the Police Service
of Northern Ireland (PSNI),and INFACT representatives to
conduct surveillance, gather intelligence, and carry out

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raids. In the biggest bust of 2005, Mooney's unit raided a
printing laboratory in County Meath, northeastern Ireland,
arresting three individuals and seizing 15 computer towers,
each containing 90 DVD burners with the capacity to produce 3
million DVDs per year (versus total annual legitimate
production of 8 million DVDs in Ireland). In addition, they
confiscated 8,000 pirated DVDs and 25 printers used to copy
and print movie sleeves.

Weak Judicial Action
--------------


5. (SBU) Whereas Ireland's Copyright and Related Rights Act
2000 is considered model IPR legislation within the EU, the
weak penalties levied by judges hamper enforcement efforts,
said Mooney and INFACT. On a summary conviction without
jury, the law allows for the maximum fine of euro 1,900 for
each infringing pirated copy, article, and device, or a
maximum prison term of twelve months. On a conviction before
a jury, the Act permits a maximum fine of euro 127,000,
and/or a maximum prison term of five years. In practice
however, judges typically impose sentences far below the
maximum allowed. In 2005 for example, the police pursued the
prosecution of 150 individuals for IPR violations, 70 of whom
were convicted, with the remaining cases ongoing. The
average fine imposed was euro 100-250, and Mooney was not
aware of any conviction involving incarceration. In one case
in 2005, police seized euro 300,000 worth of pirated DVDs
from two brothers. Following arrest and conviction under the
Copyright Act 2000, one brother, previously convicted and
fined under the law, was fined euro 250, while the other
brother, never before convicted under the Copyright Act 2000,
was fined euro 300.


6. (SBU) Irish judges apparently view DVD counterfeiters as
doing little harm to society, emboffs were told by INFACT
Director General Brian Finegan. A part of the problem, he
explained, was that Ireland had no separate court circuit to
handle economic crime specifically. Judges often heard cases
of violent or narcotics-related crime the same day that they
handled DVD piracy prosecutions, and they were thus inclined
to mete out comparatively less serious penalties for
sentenced counterfeiters. Finegan noted the irony, however,
that the street value of pirated DVDs in IPR court cases
regularly exceeded the worth of narcotics involved in drug
cases. An upshot of inconsequential judicial fines, he
added, was the large number of repeat offenders processed by
police and the courts. INFACT legal counsel Michael Hinkson
explained further to emboffs that the bench's tradition of
"sacred independence" and judicial activism limited the
influence of industry and the Irish Government on the
severity of the sentences.

Government Response
--------------


7. (SBU) On May 5, Minister of Justice, Equality, and Law
Reform Michael McDowell announced the formation of an
Inter-departmental Working Group (IWG) to address burgeoning
DVD piracy. The IWG will be chaired by Department of Justice
Secretary General Sean Aylward and will include

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representatives from the following departments: Enterprise,
Trade, and Employment; Social and Family Affairs; Arts,
Sports, and Tourism; Environment, Heritage, and Local
Government; Office of Revenue Commissioners; and, the police.
Minister McDowell noted in his announcement that DVD piracy
was not a victimless offense, but rather a form of theft that
threatened Ireland's 5,000 cinema industry workers and funded
other sorts of organized crime, including drug trafficking.
He added that the IWG would soon meet with, and take
submissions from, affected industry groups on steps to combat
DVD counterfeiting. These discussions would focus in part on
ensuring the severity of sentences related to piracy crimes.

Industry Response
--------------


8. (SBU) Recent months have seen stronger efforts by
entertainment industry groups to overcome rivalries and to
coordinate their government lobbying efforts, according to
INFACT Director General Finegan. The two major lobbies are
INFACT, the local voice of the MPA and U.S. studios, and the
Intellectual Property Alliance, an Irish organization
representing local DVD retailers, including, most
prominently, XtraVision, a Blockbuster subsidiary. In April,
INFACT and IPA created the Anti-Piracy Steering Committee
with representatives from both organizations to act as an
advisory body to the Government. Minister McDowell's May 5
announcement, in fact, came at an entertainment industry
seminar hosted by the Anti-Piracy Steering Committee, which

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decorated the venue with posters depicting children watching
DVDs with men in hooded, terrorist garb. On May 12,
moreover, the Committee met with the IWG in the first of a
series of discussions. Finegan said that the Committee would
press the IWG for supplemental IPR legislation that would
include mandatory minimum sentences for IPR violators. He
added that whereas the MPA had considered making a Special
301 submission on Ireland due to increasing DVD piracy, the
MPA now wished to give the Working Group a chance to act
against IPR violations (a view that MPA Europe
representatives repeated to emboff at the May 5 seminar).

Comment: Judicial Training Available?
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9. (SBU) In light of DVD piracy trends, Post intends to
consider Irish judges as potential candidates for future IPR
training courses of the sort offered in reftel. We would
appreciate knowing of any IPR training that is designed
specifically for members of the judiciary. Judicial leniency
is not unique to DVD piracy cases, but is a publicly lamented
hallmark of the Irish bench, as seen in the relatively light
sentences given to high-profile violent criminals. In the
case of DVD piracy, weak judicial penalties encourage those
who would rip off not only U.S. studios, but also Irish
film-makers, who have recently begun to attract international
acclaim. An Irish film, "Six Shooter," took this year's
Oscar for best short film, and another film, "The Wind That
Shakes the Barley," won the Palme d'Or at Cannes on May 28.
The judiciary's tepid response to IPR violations runs counter
to Ireland's aspirations for a more vibrant domestic film
industry and, more broadly, for an economic future that
hinges on knowledge, research, and creativity -- in short,
intellectual content.
KENNY