BULGARIA: IPR UPDATE

UNCLAS SECTION 01 OF 02 SOFIA 001365

SIPDIS

STATE FOR USTR LMOLNAR, JCHOE-GROVES
STATE FOR EB/IPE JURBAN, SWILSON, JBOGER AND EUR/NCE MTURNER

COMMERCE FOR SSAVICH

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SIPDIS

E.O. 12958: N/A
TAGS: ECON KIPR BU
SUBJECT: BULGARIA: IPR UPDATE


1. (SBU) Summary: Bulgaria continues to make progress on IPR
after being removed from the Special 301 List in 2007. The GOB's
highly effective inter-agency IPR Council continues to perform well.
The Cyber Crime Unit of the Ministry of Interior continues to take
proactive measures against internet piracy. The Ministry of Culture
has increased its copyright inspections of entertainment
establishments five-fold. The Department of Justice's Intellectual
Property Law Enforcement Coordinator (IPLEC) for Eastern Europe,
based in Sofia, arrived in November and is working closely with GOB
officials on IPR enforcement -- the weakest link in Bulgaria's IPR
regime. End Summary.

IPR COUNCIL BACK TO WORK
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2. (SBU) The GOB's intergovernmental IPR council is charging ahead
after a summer hiatus following the resignation of the council's
chair, Deputy Minister of Culture Ina Kileva, in May. The Council's
productive work, along with Ms. Kileva's strong personal effort,
were instrumental in Bulgaria's removal from the Special 301 List in
April. The new Deputy Minister of Culture is Yavor Milushev, a
former actor and MP from the party of former king Simeon (NMS),a
governing coalition partner. Milushev has experience in ushering
IPR legislation through parliament, and, as one of Bulgaria's most
famous actors, boldly touts his affinity for the IPR cause. With
Mr. Milushev at the helm, for the first time since the Council was
established in January 2006, the U.S. Embassy has been invited to
attend IPR Council meetings as an observer.

INTERNET PIRACY A PRIORITY
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3. (SBU) In a widely-publicized case last March, the Ministry of
Interior's Cyber Crime Unit, led by the professional and energetic
Yavor Kolev, raided the offices of four major torrent sites in
Bulgaria that were providing platforms for peer-to-peer (P2P)
sharing of music, films and software. Since the closure of these
sites, police statistics show a dramatic decrease in the uploading
of new content from Bulgarian-based sites. The police and the
Investigation Service of the Ministry of Justice have launched
investigations of the owners of the sites bol.bg, data.bg,
zamunda.net, and arenabg.com. Our contacts at the Ministry of
Interior tell us that the torrent sections of bol.bg and data.bg are
no longer in operation. The torrent site of zamunda.net continues
to operate, hosted by a Dutch server and registered under a Syrian
name. The torrent site of Arenabg.com continues operation, but
until recently was located in Texas.


4. (SBU) Yavor Kolev tells us that with the closure of the large
torrent sites listed above, his Cyber Crime Unit is now focused on
combating smaller-scale Internet Service Providers (ISPs). A total
of 23 Tera Bytes (equivalent of 38,000 CDs) were seized between
October 18 and November 28, 2007, when police raided the offices of
three local ISPs in Sofia and Bansko (Southwest Bulgaria). Police
launched investigations against all three owners.

COPYRIGHT ENFORCEMENT GAINS PACE
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5. (SBU) The Ministry of Culture increased five-fold its
inspections of cafes, retail establishments and computer halls in
October and November. Inspectors are checking whether contracts for
use of copyright products are in place and whether owners have paid
required fees. To further strengthen contract enforcement, the
Ministry of Culture is planning to meet with importers and producers
of copyrighted products to design an effective mechanism for payment
of copyright fees. The Ministry of Economy and Energy held a
similar IPR strategy session with industry and foreign government
representatives on December 10. In addition, a proposed change to
the copyright law will identify more clearly the roles of the
organizations for collective management of rights, voluntary
membership organizations of authors and producers, and their
involvement in the fee collection. Finally, according to our
contacts, by the end of 2007 the Council of Electronic Media (CEM) -
the government's regulatory authority - will check all radio
stations and TV channels across the country to ensure they have in
hand signed contracts for playing music and other copyrighted
material.


RAIDS AND SEIZURES CONTINUE
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6. (SBU) The Economic Police at the Ministry of Interior reported
they seized 28,000 pirated optical disks (ODs) and 4,000 magnetic
disks between June 1 and October 30, 2007. In the last 3 years the

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Economic Police tracked down five DVDR and CDR production
facilities, with the latest successful raid in the town of Pomorie
(South Black Sea) in August, 2007. In November, the Customs
Administration seized over 2000 illegally imported copies of the
Windows operating system. From January to October 2007, the Customs
Administration seized over 1,300 counterfeited goods for violation
of industrial property rights (logo, brand name, etc.),in
comparison to a total of only 300 counterfeited goods seized in
calendar year 2006.

CHALLENGES REMAIN
--------------

7. (SBU) The local IFPI representative office has informed us that
three of the nine operating CD/DVD production facilities have
refused industry representatives access to their plants. When we
raised this issue in November, Deputy Economy and Energy Minister
Lachezar Borissov said that new legislation would have to be drafted
in order to even make it legally possible for industry
representatives to accompany Economy Ministry officials on their
inspections. Borissov said that his Ministry performs one
inspection approximately every 15 days (for a total of 20 from
January to October, 2007) and they have not found any new illegal
production, although they do discover administrative violations from
time to time.

8. (SBU) The most serious concern on the IPR front is enforcement.
Our industry contacts complain that certain Ministry of Justice
investigators and prosecutors consistently cause unreasonable delays
during pre-court investigations. The majority of IPR cases are
still stuck in the pre-court phase or are argued against "an
undisclosed perpetrator," although the police claim that they have
enough evidence to bring cases against specific individuals. In
addition, judges need to be educated and convinced of the importance
of deterrent sentences issued for IPR offenders. Fortunately, the
U.S. Department of Justice's Intellectual Property Law Enforcement
Coordinator for Eastern Europe, who is based in Sofia, arrived in
November and is beginning to work with GOB officials to enhance
their capability to prosecute IPR crime.


9. (SBU) Comment: Bulgaria continues to improve its IPR regime
following its removal from the Special 301 Watch List in 2007. Our
industry contacts tell us they consider the IPR situation in
Bulgaria relatively stable, although there is much work still to be
done. With the new DOJ IPLEC now in place, we are well positioned
to assist Bulgaria in the area where it needs help the most --
enforcement.

BEYRLE