SRI LANKA: POLICE RAID VENDORS OF PIRATED SOFTWARE

UNCLAS SECTION 01 OF 02 COLOMBO 000461 SENSITIVE SIPDIS STATE FOR SCA/INS AND EB/TPP/IPE DEPARTMENT PLEASE PASS TO USTR NEW DELHI FOR USPTO DOMINIC KEATING E.O 12958: N/A TAGS: ECON ETRD KIPR EAID CE SUBJECT: SRI LANKA: POLICE RAID VENDORS OF PIRATED SOFTWARE REF: 07 COLOMBO 128 ¶1. (SBU) Summary: On May 6, Sri Lankan police raided software dealers in a popular shopping mall in Colombo. The raid was Sri Lanka's first intellectual property rights (IPR) enforcement action against pirated software dealers. With uncommon swiftness, offenders were raided, charged, pleaded guilty, and convicted within 24 hours. Police vowed to continue the fight against piracy, but lack the budget to truly go on the offensive. End summary. ¶2. (SBU) On May 6, the Colombo Crimes Division of the Sri Lanka Police raided three shops in Majestic City, the premier shopping mall in Colombo. The Police acted on a complaint by the Business Software Alliance (BSA) on behalf of Microsoft Corporation. The police seized about 400 illegal Microsoft CDs during the raid. On May 7, less than 24 hours after the raid, the shop owners were produced in court, where they pleaded guilty. They were fined Rupees 450,000 (approximately $4,100) each. In addition, they were sentenced to six months imprisonment, suspended for five years. (Note: Maximum penalties for IPR violations in Sri Lanka include a fine of up to Rupees 500,000 ($4,600) and/or a prison sentence of 6 months, but smaller penalties have been the norm.) The shop owners also agreed to refrain from dealing in counterfeit Microsoft products. The seized goods have been destroyed. ¶3. (SBU) Microsoft's office in Colombo is working with local partners to develop the brand's business here. The firm therefore does not want to be seen as driving the crackdown. As a result, it is working closely with the Business Software Alliance, which is driving the enforcement effort. According to Sudath Perera, Senior Partner of Sudath Perera Associates and legal counsel/representative for the Business Software Alliance, this was the first raid on pirated software dealers in Sri Lanka. A global software piracy study conducted for the alliance in 2007 revealed a very high software piracy rate -- close to 90% -- in Sri Lanka. ¶4. (U) According to industry sources, the intent of the raid was to create awareness of software intellectual property rights among dealers and businesses. Police also said the raid was to send a strong signal to IPR violators of all kinds. Anura Senanayake, Director of the Colombo Crimes Division of the Police, told newspapers that he strongly supported the raid and warned the private sector to stop using pirated software. Newspapers quoted him saying, "I strongly encourage all computer dealers and software resellers everywhere to ensure that they only sell legal and original software to avoid facing the full consequences of the law. We will be conducting continued enforcement against software pirates until piracy is wiped out." He also reminded businesses to respect the law of the country by purchasing and using original software. When contacted by EconFSN, Senanayake affirmed his statements and said he is willing to do more raids. He encouraged rights holders to contact the police with their complaints. ¶5. (SBU) According to Sudath Perera Associates, the local magistrate and police were cooperative in issuing a search warrant, organizing the raid, and prosecuting the accused. According to them, recent IPR awareness-raising programs organized by rights holder groups for judicial and police officers have helped to improve enforcement. In March 2008, BSA organized an awareness program for police officers. The American Chamber of Commerce of Sri Lanka carried out a similar training program for magistrates in ¶2007. Sri Lanka's National IPR office has worked with international experts, including the U.S. Patent and Trade Office and the World Intellectual Property Rights Organization (WIPO),to conduct seminars that have also raised awareness among government officials. ¶6. (SBU) The BSA/Microsoft action followed successful raids by Toshiba Corporation and Polo Ralph Lauren early this year. Toshiba instigated raids on several shops selling counterfeit ink cartridges. Polo has filed several court cases against manufacturers and retailers of counterfeit apparel. In some cases the accused have pleaded guilty. Other cases have proceeded to trial. ¶7. (SBU) Comment: Sri Lanka's overall IPR laws and regulations are strong, yet it remains far too easy to buy pirated goods throughout the country. The arrests this month demonstrate that the government COLOMBO 00000461 002 OF 002 is willing to make arrests and see them through to conviction when prodded by industry and stakeholders; unfortunately, it remains too dependent on such complaints and handholding. To get to the point where its enforcement is routine, rather than exceptional, the government needs to give the police and National IPR office the budgets and the trained staff needed to truly combat IPR violations. Embassy and USG agencies are providing much of the training, but with the government perennially in deficit, IPR enforcement budgets are unlikely to grow soon. BLAKE