IPR Update: Police Enforcement Campaign Continues

UNCLAS JAKARTA 003296

SIPDIS

SIPDIS
SENSITIVE

FOR EAP/MTS; EB/IPE/EAP
COMMERCE PLEASE PASS USPTO FOR JOELLEN URBAN
DEPT PASS TO USTR DKATZ, JGROVES

E.O. 12598: N/A
TAGS: KIPR ETRD WTO ID
SUBJECT: IPR Update: Police Enforcement Campaign Continues

REF: JAKARTA 3531 "Special 301 Submission"


1. (SBU) Summary: A Local Motion Picture Association (MPA)
representative told us on March 14 that Indonesian police
raided their third optical disc (OD) factory in 2006 on
March 13 and sealed 12 production lines used to produce
pirated ODs. The factory apparently had been in the process
of registering with the Ministry of Industry and had
recently received source identification codes (SID). In
total, the MPA representative told us police have shut down
and sealed 26 production lines in 2006, including seven
lines on February 9 (Ref) and seven lines at another factory
during that same week. End Summary.


2. (SBU) A regional International Federation of Phonogram
and Videogram Producers (IFPI) representative said the raids
are sending a strong signal to other factories. He noted
that each line costs roughly a quarter of a million US
dollars to purchase second hand, and each has the capacity
to produce roughly 100,000 OD's per month (pirate discs sell
for roughly 50 cents on average in Indonesia). The MPA
representative told us that all three factories are owned by
a single individual with reported links to organized crime.
According to the MPA representative, the Attorney General's
Office seems keen to prosecute the owner of the three raided
factories. Police conducted the raids with support from a
local recording industry association (Gapurindo) headed by a
former three star police general. District Police on March
8 also raided pirate vendors at Ratu Plaza again and seized
roughly 100,000 pirated discs.


2. (SBU) A USAID funded project assisting the Indonesian
Government (GOI) on implementation of OD regulations on
March 14 held a well-attended wrap-up workshop that included
representatives from most of the known 22 OD factories,
local and regional IP industry representatives, and key
government agencies. The IFPI regional representative, who
participated in the workshop, told us that many OD factories
are now refusing to accept masters without SID codes. This
has created a short term problem for producers who still
possess older legitimate masters that do not contain SID
codes. To solve the problem, the Ministry of Industry says
it will agree to allow these producers to register their
masters (using their existing bar codes) at the Ministry
until the end of March and use them to produce ODs until the
end of October.


3. (SBU) Comment: We are pleased that the police are
keeping up recent enforcement efforts, but the ultimate
seizure of the 26 lines may be dependent on the successful
outcome of a court case brought against the owner. USAID
assistance has made significant progress in implementation
of the OD regulations. Many registered factories are now
demanding SID Codes on masters, and factories are
negotiating a compromise with the GOI to address the issue
of older legitimate masters without SIDs. We hope to build
on this progress with two EB-funded senior technical
advisors who will come on board soon to support the police
on IPR enforcement and the Ministry of Industry on OD
regulation implementation.
PASCOE