TRYING TO FIND NON-PIRATED MOVIES IN SOUTHWEST CHINA

UNCLAS SECTION 01 OF 03 CHENGDU 000030

SENSITIVE
SIPDIS

STATE FOR EAP/CM - PPARK AND EB/IPE - DBUBMAN
STATE FOR EB/TPP - EMAGDANZ AND INL - JVIGIL
STATE FOR EB/CIP - WWITTEMAN AND RDALEY
USTR FOR CHINA OFFICE - AWINTER; IPR OFFICE - RBAE;
AND OCG - SMCCOY, JRAGLAND, AND KALVAREZ
COMMERCE FOR NATIONAL COORDINATOR FOR IPR ENFORCEMENT
COMMERCE FOR MAC ESZYMANSKI
COMMERCE FOR MAC SWILSON, JYOUNG
LOC/COPYRIGHT OFFICE - STEPP
USPTO FOR INT'L AFFAIRS - LBOLAND, EWU, STONG
DOJ FOR CCIPS - MDUBOSE AND SCHEMBTOB
FTC FOR BLUMENTHAL
FBI FOR LBRYANT
DHS/ICE FOR IPR CENTER - DFAULCONER, TRANDAZZO
DHS/CBP FOR IPR RIGHTS BRANCH - GMACRAY, PPIZZECK
ITC FOR LLEVINE, LSCHLITT

E.O. 12958: N/A
TAGS: ECON EIND ETRD KIPR PGOV CH
SUBJECT: TRYING TO FIND NON-PIRATED MOVIES IN SOUTHWEST CHINA

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1. (U) This cable contains sensitive but unclassified
information - not for distribution on the internet.




2. (SBU) SUMMARY: Pirated movies appear to remain readily on
sale in Sichuan Province's capital city of Chengdu. Packaging
is of such a high quality that the average consumer probably
cannot distinguish between legitimate and fake DVDs. Retail
stores along the city's "European Street" prominently display
large quantities of pirated Western DVD movies. U.S. television
shows are also available for sale. In another part of the city,
unboxed DVD copies of Western movies are commonly available from
street-side vendors and in a popular electronics market. END
SUMMARY.



Small Details Raise Questions about Authenticity

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3. (SBU) Many of what appear to be pirated DVD movies for sale
in Chengdu stores we surveyed have high-quality packaging that
looks legitimate. The high-quality color cover graphics and
plastic DVD cases are quite similar to those available at
retailers in the U.S. A number of the movies also have
cardboard slip covers that fit over the outside of the plastic
DVD case. The movies have clear plastic wraps, like DVDs in the
U.S. and some have hologram stickers, ostensibly to show the
authenticity of the product.




4. (SBU) During a recent trip to three stores on Chengdu's
"European Street," Congenoff was impressed that nearly all of
the DVD movies for sale, based on a quick look at the front and
back of boxes, looked as if they might be legitimate.
Descriptions, quotes, and graphics on the back of the boxes
generally looked identical to legal copies of the DVDs. Closer
inspection raised doubts about the authenticity of the products.
In fine print at the bottom of the boxes, Congenoff saw
inconsistencies suggesting the movies were pirated. On the back
of 20th Century Fox Home Entertainment's "Max Payne" and "Mr.
and Mrs. Smith," Congenoff found typographical errors in the
fine print legal text; words were misspelled, improperly
capitalized, or incorrectly run together. Carrefour's flagship
store in Chengdu, also sold Miramax Home Entertainment's "An
Unfinished Life" and Canadian Muse Entertainment Enterprises'
"The Deal" with similar errors in the fine print.




5. (SBU) U.S. television shows on DVD are also widely available
in Chengdu. These are generally sold in box sets that appear
very similar or identical to those in the U.S. Once opened,
however, there is frequently evidence of piracy. Discs are
often sitting loose in a cardboard cavity inside the box. Discs
may have little or no artwork on them, and some may have Chinese
characters near the center of the disc.



Disclaimers and Release Dates Suspicious, Others Hard to Say

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6. (SBU) DVDs of recently-released U.S. movies like "Rock `N
Rolla," "Burn after Reading," and "Body of Lies" that Congenoff
recently saw for sale had lines included in the fine print that
said the movie was not available for sale outside Canada, the
U.S. or its territories. In one instance, a box set of the HBO
series "Rome" had a line indicating it was not available for
sale outside the EU. A customer, however, would need to have
excellent English-language skills and carefully read the back of
the box in order to notice such disclaimers.




7. (SBU) Sony Pictures' "Quantum of Solace," scheduled for
release on DVD in the U.S. in March, was available at local
stores within a few weeks of its November 2008 debut in
theaters. Producers of the pirated version of the film appear
to have used the movie's promotional posters to create a
professional looking box cover. The movie is also sold with a
cover that mirrors the artwork from the movie's soundtrack.
Columbia Pictures' "Seven Pounds" is another movie, yet to be
released on DVD in the US, which is already available in
Chengdu. The DVD box cover retains the line "coming soon,"
suggesting that the cover art was lifted from the movie's
promotional material.




8. (SBU) Congenoff could not determine whether or not some
movies might be legitimate copies. Excel Media, a
Guangdong-based media firm, claims to have partnership
agreements with several major movie studios to distribute their
films in China. Some DVDs that had Excel Media branding on the
back of the package lacked the imbedded holograms in the plastic
that apparently-legitimate copies of Excel DVDs contained. Not
all pirated DVDs for sale in Chengdu, however, are of such a
high quality. Some have packaging with prominently displayed
words that can only be described as "Chinglish," while some
American film DVDs are sold in packages with movie descriptions
written in Russian, Thai, and Spanish.



Local Enforcement of Copyrighted Movies

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9. (SBU) Numerous street-side vendors and hawkers in the local
electronic markets also offer pirated DVD movies. Nearly every
evening, vendors set up on sidewalks near the Consulate to sell
Chinese and Western DVDs. Public security officials commonly
patrol the area, but Congenoff has never seen the officials
question the vendors about their goods. Hawkers in one of
Chengdu's large electronics markets openly approach patrons and
offer DVDs. Congenoff has seen titles like "Quantum of Solace"
available for sale. Congenoff has not observed, during multiple
trips to the market, officials attempting to crack down on these
hawkers.




10. (SBU) The Sichuan Provincial Intellectual Property Rights
Office (SCIPO) does not directly enforce or regulate copyright
infringement of movies or software. When Congenoff raised the
issue of apparently-pirated movies in Chengdu's stores, the
Director of SCIPO said that they would refer any cases to the

CHENGDU 00000030 003.2 OF 003


Copyright Bureau (CB). The CB would follow up on any
allegations of piracy. In the case of alleged DVD or software
piracy, SCIPO officials said that CB would check to ensure the
retailer was authorized to sell the merchandise in stock.
SCIPO's 60 staff members, however, appear to focus primarily on
patent registrations. During a recent visit to SCIPO's office,
officials showed Congenoff where individuals could file patent
applications and obtain information about the filing process.




11. (SBU) COMMENT: SCIPO was formerly the Sichuan Patent
Office. In 2000, the Patent Office changed its name to reflect
broader responsibility for intellectual property rights, but it
does not appear to have direct authority to enforce copyright or
trademark infringement. Post will continue to try to monitor
the piracy situation on the streets of Chengdu and raise our
concerns with local authorities. END COMMENT.
BOUGHNER