Identifier
Created
Classification
Origin
07TALLINN112
2007-02-21 13:10:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tallinn
Cable title:  

ESTONIA: VOLUNTARY INPUT FOR 2007 SPECIAL 301

Tags:  ETRD KIPR ECON EUR EN 
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R 211310Z FEB 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9546
INFO RUCPDOC/USDOC WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS SECTION 01 OF 04 TALLINN 000112 

SIPDIS

DEPT FOR EB/TTP/IPE BOGER, FOR EUR/NB GROVES
DEPT PLEASE PASS TO USTR FOR LMOLNAR
DOC FOR PETERS
DOC PLEASE PASS USPTO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KIPR ECON EUR EN
SUBJECT: ESTONIA: VOLUNTARY INPUT FOR 2007 SPECIAL 301
REVIEW

REF: A) STATE 7944 B) 06 TALLINN 424 C) 07 TALLINN 66

D) 06 TALLINN 156

UNCLAS SECTION 01 OF 04 TALLINN 000112

SIPDIS

DEPT FOR EB/TTP/IPE BOGER, FOR EUR/NB GROVES
DEPT PLEASE PASS TO USTR FOR LMOLNAR
DOC FOR PETERS
DOC PLEASE PASS USPTO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KIPR ECON EUR EN
SUBJECT: ESTONIA: VOLUNTARY INPUT FOR 2007 SPECIAL 301
REVIEW

REF: A) STATE 7944 B) 06 TALLINN 424 C) 07 TALLINN 66

D) 06 TALLINN 156


1. Summary: In 2006, the GOE continued to improve the
country's intellectual property rights (IPR) regime
through legislative changes and cooperation with rights
holders. The long-awaited new Civil Procedure Act that
provides for ex parte searches came into force January
1, 2006. On June 14, 2006, the Estonian Parliament
ratified the World Phonogram Producers Treaty and the
World Copy Right Treaty. The year also witnessed new
cooperation initiatives between law enforcement
agencies and industry. While traditional forms of
piracy continued to decrease, internet piracy in tech-
savvy Estonia is an ever-growing concern that calls for
better training of law enforcement agents. End
summary.

--------------

A. NOTORIOUS MARKETS
--------------


2. There are no notorious markets for counterfeited
goods in Estonia. Smaller collections of shops near
the harbor and in other parts of Tallinn still exist
which continue to sell pirated CDs alongside legitimate
goods. Pirated CDs are seized at shops like these
occasionally. (See para 14).

--------------

B. Optical Media Piracy (CDs, VCDs, DVDs)
--------------


3. In 2006, optical media piracy in Estonia continued
to decline. The days of large-scale trade in pirated
materials are long gone. Post's Economic Specialist
made several visits in 2006 to markets near the harbor
area which cater largely to Finnish tourists. On these
occasions, she observed card tables trading CDs,
videos, and DVDs at relatively high prices. While it
is possible that some of these items may have been
pirated, such vendors are also known to sell legitimate
copies. According to a local anti-piracy NGO, the
Estonian Organization for Copyright Protection (EOCP),
the physical market for pirated audio-video items has
decreased significantly, including around the harbor
area, which over the past year has been under special
police surveillance.

-------------- --------------

B.1. INTERNET PIRACY AND COOPERATION WITH RIGHTS
HOLDERS
-------------- --------------


4. In 2006, the Internet continued to be the biggest
IPR challenge in Estonia, as in other countries with
well-developed IT sectors. While optical media piracy
has shown a vast decline in the past few years, the
internet has become the most troublesome outlet for
pirated material in Estonia, especially File Transfer
Protocol (FTP) servers and peer-to-peer (P2P) systems.
EOCP has entered into memorandums of understanding
(MOU) with ten major Internet Service Providers (ISPs).
Five of the MOUs were signed in 2006, including with
ISPs in Northeast Estonia, where a large number of the
consumers of Russian language media are located. While
these MOUs allow for the removal of illegal copyrighted
materials from public FTP servers, there are still
small, local ISPs that offer server services to swap
music, film and software files. In 2006, the EOCP
closed 2,080 web sites and removed 29,676 files (in
2005, 232 websites and 3136 files were removed). In
May, the EOCP closed down one of the biggest locally
administrated websites that offered direct links to
pirated music. However, most of the music files were
stored on foreign servers. In August, the EOCP closed
two major illegal software forum sites that offered
direct download links to music, movies and interactive
games. Despite the cooperative efforts of industry,
police and local ISPs, internet piracy remains a
significant problem. File sharing and peer-to-peer
networks such as KaZaA, StreamCast, E-Donkey, E-Mule,
and BitTorrent remain the largest sources of internet
piracy in Estonia. These networks are all located
geographically outside of Estonia.

TALLINN 00000112 002 OF 004



--------------

C. Use/Procurement of Government Software
--------------


5. The use of software in government offices is in
compliance with national and international copyright
standards. According to the GOE Informatics Center,
every government office has designated a person/section
to be responsible for information systems, including
procurement and development of software. The GOE
implements rules and regulations for government
software procurement.

-------------- --------------

D. TRIPS compliance, FTA Implementation and Other IPR
Related Issues
-------------- --------------


6. Estonia continues to make progress on promulgating
IPR-related legislation. On January 1, the long-
awaited legislation on ex parte searches encoded in the
new Civil Court Procedure Act (CCPA) came into force.
Major changes to the IPR penal policy were introduced
by the Amendment Law to the Penal Code (ALPC) which
passed two readings in 2006 and was adopted by the
Parliament on January 24, 2007. The ALPC classifies
trade in pirated copies as a crime even when it occurs
for the first time - previously it was only a
misdemeanor. However, according to the ALPC, the use
of a pirated copy for a public performance or public
display of the work or for communication is a
misdemeanor, unless committed for commercial purposes.
This classification may pose major difficulties for the
investigation of IPR crimes in the digital environment.
Under Estonian legislation, no criminal procedures such
as the use of undercover officers and surveillance can
be used when investigating misdemeanor acts. The ALPC
will come into force on March 15, 2007.


7. In 2006, the IPR Expert Committee of the Ministry
of Culture (MOC) proposed a process for promulgating a
new Copyright Act. The current Copyright Act dates
from 1992, and has been amended 20 times. The aim of
the new legislation is to harmonize the language,
restructure the Articles, and to strengthen copyright
protections for Soviet-era authors. Observers expect
language for the new legislation to be complete by

2008.


8. In 2006, two optical disc plants continued their
production in Estonia: 'Digibox' in Tartu, and the
Lithuanian-based Baltic Optical Disc (BOD) plant in
Tallinn. The managers of the companies have declared
that their activities fully comply with the copyright
laws, they work very closely with IPR organizations,
and they are actively involved in anti-piracy actions.
The International Federation of the Phonographic
Industry (IFPI) has taken samples of the molds of the
CD/DVD lines of both of the plants located in Estonia
and provided them with mold Source Identification Codes
(SID).


9. While Estonia has no legislation mandating the use
of SIDs on locally manufactured CDs, BOD and Digibox
have each entered into civil agreements with the Nordic
Copyright Bureau (NCB) on IPR protection. According to
the EOCP, such civil agreements between IPR
organizations and producers have proven to be very
effective. While source identification in Estonia is
regulated by civil agreements, the GOE does not
anticipate making SID provisions mandatory by law.
According to the Ministry of Culture however, the GOE
will consider this step if the production situation
changes in Estonia.

--------------

E. DATA PROTECTION
--------------


10. Not applicable in the Estonian market.

-------------- --------------

F. PRODUCTION, IMPORT AND EXPORT OF COUNTERFEIT GOODS
-------------- --------------

TALLINN 00000112 003 OF 004




11. Recent seizures of pirated CDs at local shopping
centers show that there is some domestic supply in
Estonia. However, law enforcement agencies as well as
anti-piracy groups consider Estonia more a transit
country than a source country for counterfeit goods.
According to Estonian Customs, most of the IPR-
infringing goods that have been detected have been in
transit to Russia. Only a small quantity of IPR-
infringing goods was transported from Russia to the
European Union customs territory through Estonia via
'suitcase piracy'.

--------------

G. ENFORCEMENT
--------------


12. In 2006, the Estonian Tax and Customs Board
detected counterfeit trademark goods in 106 cases,
detaining 97,698 items in total. The biggest cases
involved spare parts for cellular telephones (Nokia,
Alcatel, Siemens, Ericsson),in which authorities
seized some 45,819 items. Also, clothes with
counterfeit trademarks form another big category in
Estonian Customs' fight against IPR infringement. In
2006, they seized 31,334 of these items. However,
according to our interlocutors, rights holders rarely
initiate legal proceedings in cases where only small
quantities of their own goods are detected. The
industry considers the proceedings too time-consuming
relative to the perceived benefit of pursuing such
cases.


13. Local industries have made some progress
submitting annual applications to Customs which allow
Customs to seize suspected pirated goods on their
behalf. (Note: These applications are required in
accordance with European Council Decision number
1383/2003 of July 2003. End Note.) To date, about 300
applications have been submitted, the vast majority of
which come from trademark representatives. While EOCP,
representing music and film industry, has submitted
applications for some companies, a number of them have
expired. The Business Software Alliance has not
submitted any applications. Without such applications,
Estonian Customs can only seize suspected goods for
three days, which is generally insufficient time to
determine if the goods are pirated or counterfeit.


14. In 2006, Estonian Police seized 4,234 pirated
optical media items; a decline of almost 70% compared
to 2005. According to our police contacts, the
reduction in seizures of pirated audio/video materials
is due to falling demand on the local market.
Customers who seek pirated materials consider the
prices too high, when they can often get the same
products over the internet for free.


15. In December 2006, after EOCP made some test-
purchases, police raided shops on the site of a former
notorious market and seized 680 CDs and DVDs containing
pirated games, movies and music. Police arrested the
vendor and initiated a criminal investigation.


16. The police tell us that the Internet is clearly
the most common outlet for pirated audio/video media.
Limited resources do not allow police to wage large
scale operations against internet piracy. Currently,
about ten police officers from the IT crime groups in
Estonia are working on internet piracy under EOCP
supervision. Only the North Police Prefecture (Tallinn
region) is able to carry out sustained internet
monitoring on its own. In 2006, their efforts resulted
in the filing of 12 criminal cases in criminal court
against IPR violations in the digital environment. In
addition, the South Police Prefecture seized 1,000
copies of pirated audio/video materials as a result of
internet ads analysis. However, according to our
police contacts, the biggest obstacle in the fight
against ever-growing IPR violations in the digital
environment is a lack of training.


17. In 2006, cooperation on IPR-related cases between
various law enforcement agencies improved. The police
organized several successful raids together with

TALLINN 00000112 004 OF 004


Customs. Police cooperation with IPR NGOs also
improved. SNB-REACT training on trademark was
particularly useful, and resulted in effective raids in
the Tallinn harbor area and central market. Counterfeit
spare parts for cellular phones and cosmetics were
seized in large quantities. (Note: SNB-REACT is a non-
profit coalition of rights owners operating jointly
against the trade in counterfeited goods in Europe. End
note.)

--------------

H. TREATIES
--------------


18. On June 14, 2006, the Parliament ratified the two
WIPO treaties which had been pending since Estonia's
accession to the EU: the World Phonogram Producers
Treaty (WPPT) and the World Copyrights Treaty (WCT).
However, according to a March 2000 EU decision, the
WPPT and WCT ratification letters from member states
and the European Community should be submitted
simultaneously. Our contacts at the Ministry of
Culture tell us that the current holder of the EU
Presidency, Germany, plans to submit all ratification
letters in May 2007.


--------------

I. POST'S ACTIVITIES
--------------


19. Promoting effective Intellectual Property Rights
protection remains a priority for Embassy Tallinn. The
Embassy remains engaged with the GOE on the need to
continue to upgrade Estonia's IPR regime. In 2006,
Post selected a Senior District Prosecutor for
participation in an International Visitors Program on
Protection of Intellectual Property Rights.


20. In January 2006, two lawyers from the Estonian
Patent Office attended a course on patents at the U.S
Patent and Trademark Office (USPTO) Global Intellectual
Property Academy (GIPA). In September, two Estonian
Police Officers received training on law enforcement at
GIPA. Following the course, one of the police officers
was chosen to supervise an Estonian team advising EU
candidate countries on accession.


21. On April 27-28, 2006, Embassy Tallinn and the
USPTO hosted an international workshop on 'Copyright
Infringement in the Digital Environment'. More than
eighty people - police, prosecutors, government
officials and industry representatives - from 16
countries attended. The conference featured
practitioners from the USPTO, the FBI, the Department
of Justice, and industry representatives. Participants
exchanged best practices on gathering evidence and
prosecuting intellectual property crime on the internet
and discussed the need for closer cooperation on
internet piracy cases. The workshop offered a forum
for sharing best practices between the United States,
EU Member States, and industry on this new and growing
form of IPR violation, and also for raising public
awareness about internet piracy. (REF B) A follow-up
workshop was held in Tallinn on January 17-18, 2007
(REF C).


22. In August 2006, under Econoff's initiative, the
American Chamber of Commerce in Estonia established an
IPR Sub-Committee. The goal of this committee is to
contribute to Estonia's IPR efforts by bringing
together the Business Software Alliance, private
companies, the EOCP and other interest groups on a
regular basis. In 2007, the AmCham IPR Committee has
hosted two seminars to raise public awareness and
promote IPR education, - one for teachers and another
for small and medium businesses.

GOLDSTEIN