GOI SAYS JUDICIAL REFORM WILL NOT REDUCE IPR

UNCLAS SECTION 01 OF 02 ROME 000328 SIPDIS SENSITIVE STATE FOR EB/TPP/IPE (GREEN/URBAN) STATE PASS USTR FOR SANFORD/ ESPINEL USDOC PASS USPTO E.O. 12356: N/A TAGS: KIPR ETRD EINV IT EUN SUBJECT: GOI SAYS JUDICIAL REFORM WILL NOT REDUCE IPR PROSECUTIONS Ref: A) 05 STATE 207519 B) 05 ROME 3881 C) 05 ROME 1569 ¶1. (U) Summary: The Italian Ministry of Justice, in a written reply to the Ambassador, has firmly rejected U.S. copyright industry arguments that recent judicial reforms will hamper the prosecution of intellectual property crimes. Contrary to the claims of the Recording Industry Association of America (RIAA) and other IP interests, the Ministry contends that, under the reforms, the statute of limitations will actually increase for most IP-related offenses, not decrease as the industries claim. Embassy contacts in the local music and film associations, while still not fully accepting the GOI's interpretation, are more relaxed about the reforms and are taking a wait-and-see attitude. End summary. Background -------------- ¶2. (U) The Italian parliament passed November 29 a broad reform, popularly know as the "ex-Cirielli" law, of Italy's criminal justice system. The law, which supporters say is needed to speed the pace of criminal trials in Italy, reduces the ability of judges to extend trials by restricting the statute of limitations for many types of crimes. The law is also billed as a "get tough" measure because it stiffens penalties for repeat offenders and for serious and mafia-related crimes. ¶3. (U) U.S. copyright industry groups had expressed concern that the new law would make prosecution of IPR crimes (considered a less serious criminal offense punishable by less than a five-year sentence) more difficult and would result in a massive dismissal of current IPR cases. A last-minute amendment to the law exempting most ongoing trials from the new regime, however, eliminated the prospect of a de facto mass amnesty for pirates and counterfeiters. (Note: IPR concerns aside, the law remains very controversial in Italy and magistrates continue to protest their perceived undue interference in the judiciary. End note.) GOI: IPR Statute of Limitations Not Reduced -------------- ¶4. (U) The Ambassador raised the IP industries concerns about "ex-Cirielli" during a November 15 meeting with Justice Minister Roberto Castelli, who promised to respond in writing. We recently received the Ministrys written reply, which maintains that the basic statute of limitations, referred to in Italian law as "prescription," will increase in most cases from five to six years. Meanwhile, the maximum prescription--i.e. the maximum period within which a case must be completed, factoring in procedural interruptions--for IPR cases will remain unchanged at seven-and-a-half years, not six as the copyright associations had feared (ref B). The reply also emphasizes that "ex-Cirielli" will raise penalties for repeat offenders, which should help put more habitual counterfeiters behind bars. Key passages of Castelli's response follow: ¶5. (U) begin informal translation: "With respect to the previous system, crimes against intellectual property will thus be treated more seriously in that the statute of limitations term will be extended. In fact, crimes punished with a jail sentence less than five years or only with a monetary fine were in the past prescribed after five years, now the prescription term will be six years; fines had been prescribed in two or three years, now these are prescribed in four years. "Nor has the "ex-Cirielli determined the reduction of the maximum prescription term, that which takes into account all delays to the proceedings. In fact, while it is true that the prescription term for first offenders has been reduced ... the increase of the minimum term of prescription means that maximum terms remain the same or may even increase. Additionally, prescription terms for repeat offenders have significantly increased and generic extenuating circumstance can no longer be applied when calculating prescription terms. End informal translation. Comment: Different Interpretations -------------- ¶6. (SBU) While the Embassy cannot verify the validity of the Ministry's analysis, we believe RIAA and other industry groups may have misinterpreted the "ex- Cirielli" law, particularly because they formulated their positions based on earlier drafts and not on the version that eventually passed. Determining the exact impact of these judicial reforms on the statute of limitations has proven extremely difficult, even for professional IP lawyers. More importantly, the Federazione Industria Musicale Italiana (FIMI, the RIAA's local representative) and the Federazione Anti- Pirateria Audiovisiva (FAPAV, the movie industry's anti-piracy lobby) are more relaxed about "ex- Cirielli," though they still warn that the law is untested and that the exact effects will only be known in several years. Privately, some of our contacts in the IP industry (some of whom have seen Castelli's response to us) have admitted that they may have cried wolf. ¶7. (SBU) Comment continued: Embassy believes that the eleventh-hour amendment excluding ongoing cases from the "ex-Cirielli" application, has much reduced the original concerns of U.S. copyright interests. We will continue to be in close contact with industry associations as the ex-Cirielli is applied to IPR cases. "Ex-Cirielli" and its potential impact on IPR will be one key item of discussion during the Embassys annual IPR law enforcement and magistrates conference (reftel C) which will take place in May. Spogli