IPR PROTECTION FOR SOFTWARE: AROUND THE BEND?

C O N F I D E N T I A L SECTION 01 OF 02 MINSK 000831 SIPDIS SIPDIS STATE FOR EB/TPP/IPE STATE PASS USTR E.O. 12958: DECL: 10/01/2017 TAGS: KIPR EINT PGOV SCUL BO SUBJECT: IPR PROTECTION FOR SOFTWARE: AROUND THE BEND? REF: MINSK 656 Classified By: Ambassador Karen Stewart for reason 1.4 (d). Summary -------------- ¶1. (C) A Minsk conference highlighted the need for improved IPR protection for software in Belarus. Despite reasonable legislation, piracy rates for software remain above 80 percent. Previously the small size of the Belarusian market meant little pressure to improve enforcement, but the industry may start pushing for change with the help of the government-backed High Tech Park. End summary. ¶2. (U) This cable is based on presentations and conversations at the September 26-27 conference "Computer Programs as Intellectual Property in Belarus" held in Minsk, as well as a September 27 meeting between State Department-funded speaker Joseph Beck, High Tech Park (HTP) (reftel) Deputy Director Aleksandr Martinkevich, United Nations Economic Commission for Europe IPR Specialist Ralph Heinrich and Deputy Pol/Econ Chief. IPR Enforcement for Software in Belarus still Questionable -------------- -------------- ¶3. (C) A HTP-sponsored conference in Minsk underscored concerns over IPR enforcement in Belarus' IT sector. Martinkevich told us the country's laws met world standards, but Belarus lacked enforcement mechanisms. Beck agreed that Belarusian laws did not differ significantly from those in some developed countries, such as Britain, or from those in outsourcing giant India. ¶4. (U) Head Specialist in the Ministry of Justice's Department of Civil, Environmental, Licensing and Foreign Trade Regulations Vitaliy Sorokin explained that low consumer purchasing power and a weak tradition of buying licensed products contributed to unlicensed software accounting for over 80 percent of programs used in Belarus. Sorokin admitted he did not know how many unlicensed programs he used on his personal computer, provoking a mixture of groans and laughter from the hundred plus conference attendees. Natalya Barkun, Deputy Director of the National Center for Intellectual Property, characterized Belarus' regulations as focused on protecting intellectual property in the industrial sphere. However, she hoped a procedure introduced earlier in the month to register original computer programs would increase protection for software developers. �A;A Vicious Cycle of Small Market and Weak IPR Protection? -------------- -------------- ¶5. (SBU) Participants agreed that the small size of the Belarusian market means less attention from key multinationals to promoting licensed software in Belarus. Martinkevich said that until this summer Microsoft did not offer a local phone number for customer support, thereby providing little incentive to pay more for a licensed product. Natalya Nemkovich, Director of the Belarusian software firm Softklub, noted that many local companies purchasing legal software used the now old-fashioned method of buying CDs in a retail outlet. With major companies only tracking clients that buy direct from the license-holder or authorized partners, companies underestimate the size of the Belarusian market and decide it does not merit their attention. Are Local Players Ready for Change? -------------- ¶6. (C) Martinkevich said the HTP hopes the conference will increase public attention to IPR enforcement, which he sees as vital for attracting further international players to set up shop in Belarus. Martinkevich noted that when the presidential decree for the HTP was signed in 2005 the Park's administration consciously did not seek major international residents for fear they would swallow up fledgling local competitors. With residents continuing to expand -- they hire five to six new employees daily -- the HTP can now confidently seek out more major international firms such as Microsoft, according to Martinkevich. The HTP will even set up a joint training center with India, whom some residents consider a dangerous competitor, in the first building it hopes to open next year (when it ceases to become a completely virtual venture). MINSK 00000831 002 OF 002 ¶7. (U) Some local companies also want to see greater IPR protection for software. While many other companies focus almost exclusively on exports, Softklub supports local financial companies. Nemkovich explained that her company made the switch from selling products to licensing its software in 2001. She noted other local companies would have to make the switch if they ever expected to sell licensed programs outside of Belarus. She expressed amazement that no government agency seemed willing to take the lead to improve enforcement for IPR protection at the same time the government was pushing to create a "Belarusian Silicon Valley." Comment: Can Tsepkalo Drag Along Law Enforcement? -------------- -------------- ¶7. (C) Under the direction of former Ambassador to the United States Valeriy Tsepkalo, the HTP appears determined to meet international standards in IPR protection for its present and future residents. The fact that the HTP took the initiative to host the conference was an important step. However, the underwhelming presentation by the Ministry of Justice representative suggests Tsepkalo will have to do much more to get the rest of the government up to speed. Stewart