IPR IN BULGARIA: MODEST PROGRESS ON A BUMPY ROAD

UNCLAS SECTION 01 OF 02 SOFIA 000522

SENSITIVE
SIPDIS

STATE FOR USTR MOLNAR, JCHOE-GROVES, EEB/TPP/IPE JURBAN,
SWILSON AND JBROGER; COMMERCE FOR SAVICH AND ITA/MAC/OIPR
CPETERS

E.O. 12958: N/A
TAGS: ECON KIPR ETRD BU
SUBJECT: IPR IN BULGARIA: MODEST PROGRESS ON A BUMPY ROAD

REF: 07 SOFIA 1365


1. (SBU) SUMMARY: The GOB continues to make progress on
intellectual property rights (IPR). Industry and government
are working in tandem to draft amendments to the copyright
law, and the Ministry of Culture recently brokered a deal
between rights holders and the tourist industry on royalties.
The Ministry of Interior's Cyber Crime Unit has launched
several significant raids, seizing record numbers of illegal
music and movies in the first half of 2008. But, industry
has effectively lost its seat on the Intergovernmental IPR
Council and major IPR cases still have not made it to court.
End Summary.

INDUSTRY-GOVERNMENT RELATIONS


2. (SBU) The Intergovernmental IPR Council continues to push
through legislation and improve cooperation between
enforcement bodies. It made a misstep in early spring when
Deputy Minister of Culture Yavor Milushev restricted Council
membership to representatives of government entities (NB:
including a U.S. Embassy representative). Instead of meeting
during council meetings, industry representatives now meet
separately with Deputy Minister Milushev a day prior to
intergovernmental meetings. Milushev then raises industry
concerns with the full council the following day. Milushev
took this action because he believed council meetings were
becoming unmanageable and inefficient with multiple industry
and rights holders' participation. He argued that the new
consultative mechanism with industry would offer rights
holders more opportunity to discuss their concerns directly
with Milushev, the intergovernmental Council chair. Industry
disagrees. Ina Kileva, Chair of the Bulgarian Association of
Music Producers, is spearheading industry efforts to regain
Council observer status. We support her efforts.


3. (SBU) Industry-government cooperation is otherwise
improving. Minister of Culture Stefan Danailov recently
withdrew draft amendments to the copyright law that industry
firmly opposed. Now, Kileva and her association are working
closely with the Ministry of Culture to formulate new draft
amendments that would take a more comprehensive approach to
copyright. At industry's urging, Danailov has publicly
called for both wider public debate on the new draft law and
improved cooperation between the government and civil sector.



4. (SBU) Additionally, Deputy Minister Milushev recently
arranged a meeting between the Hotel Business Association
(which includes 80-90 percent of all hotel and restaurant
owners on the Black Sea coast) and the association that
represents music composers and collects copyright fees on
their behalf. Due to Milushev's efforts, the two sides
settled on a Framework Agreement which will compel each hotel
and restaurant to sign an individual contract with the
composers' association. In exchange for signing the
agreement, these businesses will receive a discounted price
on the copyright fee. Until now, these businesses had been
playing music illegally.

ENFORCEMENT EFFORTS


5. (U) The Cyber Crime Unit of the Ministry of Interior
continues to carry out high profile operations. It completed
its biggest raid yet in January 2008, seizing a total of 25
terrabytes (TB) of illegal music and movies in Dobrich
(Northeast Bulgaria.) In May, the Unit searched the office
of an Internet Service Provider (ISP) in Haskovo (Southeast
Bulgaria) and seized a total of 6.5 TB of illegal content.
On June 19, the Crime Unit made yet another large raid in
Varna, seizing illegal software worth USD 200,000, 21
computer terminals, and a server. To date this year, more
than 35 TB of illegal content has been seized, compared to a
total 50 TB in all of 2007.


6. (SBU) Despite these successes, Cyber Crime Unit head
Yavor Kolev tells us he does not have the necessary staff --
the Unit is comprised of 12 officers -- to adequately address
IPR violations in Bulgaria. The MOI is currently undergoing
restructuring and we are urging the GOB to dedicate the
necessary resources to IPR violations.

JUDICIARY: STILL THE ACHILLES' HEEL


7. (SBU) In March 2007, the Cyber Crime Unit shut down four
major torrent sites -- Arenabg.com, Zamunda.net, Data.bg and
bol.bg (reftel). Bol.bg and Data.bg remain closed. The

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owners of Arenabg.com and Zamunda.net were arrested and then
released by the courts after two days detention pending
further investigation. Shortly thereafter, both sites
reopened. Cases against the owners of the two sites are
still in progress. Arenabg.com is the first torrent tracker
case in Bulgaria, but its entry into court has been delayed
by a technical mistake on the part of the prosecution.
Arenabg.com's owner, Elian Geshev, still faces charges of
"aiding and abetting" the illegal distribution of large
amounts of illegal content. The case against the owners of
Zamunda.net remains trapped in the investigation process.
Both sites remain popular. Cyber Crime Unit efforts to shut
them down permanently have been frustrated by zamunda.net's
re-registration in the Netherlands and arena.bg's continuous
relocation of its registration site.

EMBASSY AGENDA


8. (SBU) With courts remaining the weakest link in
Bulgaria's IPR regime, we continue to encourage improved
judicial performance. In addition, DOJ's regional
coordinator for IPR is advising a recently-formed working
group of police, prosecutors and industry representatives to
address key IPR issues. First, the working group will
examine whether the criminal code could be amended to allow
for sampling of seized pirated goods for the creation of
expert reports, as is the current practice in the United
States and much of Western Europe. Second, it will examine
whether Serbia's successful implementation of an expediter
procedure law should be replicated in Bulgaria. This law
allows police to make smaller, street-level raids of pirated
goods. In exchange for immediate confession, the violator
would pay an administrative fine, which acts as a
disincentive for first-time offenders and does not require an
expert report or lengthy trial.


9. (SBU) The Embassy and Department of Justice continue to
offer IPR-related training opportunities for police and
prosecutors. In March of this year DOJ participated in a
government-organized workshop for police on internet crimes.
Forty Bulgarian officers participated in the event, including
at least one cyber-crime officer from each of Bulgaria's 28
districts. DOJ also recently completed a two-day training
session for 20 prosecutors, which included a section on
electronic evidence. Of those in attendance, only one had
ever previously utilized electronic evidence in a case. The
Embassy is also developing an IPR-focused Volunteer Visitor
Program for police and prosecutors for FY 2009.


10. (SBU) Comment: Bulgaria continues to make incremental
progress on IPR issues, with the judiciary stuck in a
stutter-step. We will continue to focus our efforts on
urging better industry-government cooperation, increasing IPR
enforcement capacities within the Ministry of Interior, and
providing training to representatives of Bulgaria's perennial
weak-spot, the judiciary.
Karagiannis