Identifier
Created
Classification
Origin
09KOLONIA142
2009-11-13 08:46:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kolonia
Cable title:  

IPR ISSUES IGNORED BY FSM GOVERNMENT; POPULATION DOESN'T

Tags:  ETRD ECON PGOV FM 
pdf how-to read a cable
VZCZCXRO6901
PP RUEHKN RUEHKR RUEHMJ
DE RUEHKN #0142/01 3170846
ZNR UUUUU ZZH
P R 130846Z NOV 09
FM AMEMBASSY KOLONIA
TO RUEHC/SECSTATE WASHDC PRIORITY 2384
INFO RUEHKR/AMEMBASSY KOROR 0360
RUEHMJ/AMEMBASSY MAJURO 0474
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RHHJJPI/PACOM IDHS HONOLULU HI
RUEHKN/AMEMBASSY KOLONIA 2753
UNCLAS SECTION 01 OF 02 KOLONIA 000142 

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON PGOV FM
SUBJECT: IPR ISSUES IGNORED BY FSM GOVERNMENT; POPULATION DOESN'T
ACCEPT THAT PIRATED DVDS ARE ILLEGAL

UNCLAS SECTION 01 OF 02 KOLONIA 000142

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON PGOV FM
SUBJECT: IPR ISSUES IGNORED BY FSM GOVERNMENT; POPULATION DOESN'T
ACCEPT THAT PIRATED DVDS ARE ILLEGAL


1. (SBU) SUMMARY: The only movie theater in the FSM may close
its doors because it cannot compete against readily available
pirated DVDs. Pohnpei State and the National Attorney General
Offices concede that pirated DVDs are easy to obtain, but
neither plans to take any action to limit their distribution.
The state contends that the theater owner should file a
complaint in the courts, which the owner's attorney believes
they could not win. End Summary.

Movie Theater Raises Concerns
--------------


2. (SBU) On November 5, Brian Etscheit, the owner of the only
movie theater within the FSM, Pohnpei Cinema, told Econ/ConOff
that he may have to close. The theater is located approximately
400 meters from the U.S. Embassy in Pohnpei. Etscheit stated
that he cannot compete with the pirated DVDs that are now
readily available throughout Pohnpei. The theater previously
made about $10,000 a month and was able to cover all of its
expenses. Etscheit contemplated projecting pirated DVDs onto
his screens, noting that pirated movies arrive in the FSM before
original movies and the equipment to project the DVDs are
cheaper than operating the current equipment. However, on the
advice of his attorney, he decided not to pursue this option.


3. (SBU) By 2005 the last DVD/VHS store renting licensed
movies, Movie Land, switched to pirated DVDs. The number of
visitors to the theater has dropped to such a point that
Etscheit is now losing money on the theater. His family asked
that he keep the theater open and is providing financial
support. (Note: The Etscheit family owns a number of
businesses that are doing well, including an ACE Hardware and a
grocery store. End Note.) Despite the support, Etscheit is
already cancelling some showings simply due to lack of
customers. (Note: During some showings Econ/ConOff was the
only person in the theater. Others in the expat community cite
similar experiences when going to watch popular movies that are
still playing in U.S. theaters. End Note.)

FSM's IPR Laws
--------------


4. (U) Code of the FSM, Title 35 explicitly protects
copyrighted material. Section 123 of Title 35 states "any
person who infringes a copyright willfully and for purpose of

commercial advantage or private gain shall be fined $10,000 or
imprisoned for not more than one year, or both." Per the World
Intellectual Property Organization, the only IPR related treaty
that the FSM has signed, but not ratified, is the Berne
Convention.

IPR Enforcement Unlikely
--------------


5. (SBU) Econ/ConOff met with Pohnpei State Attorney General
Scott Garvey (Amcit) and representatives for the National
Attorney General's Office, Chief of the Division of Law Johnson
Asher and Daniel Rescue Jr., on November 6. Garvey explained
that responsibility for IPR issues rests at the national level
and that per the FSM Constitution National Attorney General "had
exclusive rights only on what was made in the FSM." There is no
provision regarding materials copyrighted outside the FSM. At
the state level, there is some carry over from pre-1983 Trust
Territory regulations. According to Garvey, Pohnpei carried out
a "codification of the common law," which basically focused on
preventing forgeries. He added, and Asher confirmed, that the
FSM does not have the capacity to address patent issues.


6. (SBU) Garvey went on to say that, in his view, the FSM has
purposefully kept some aspects of its IPR legislation weak. For
example, the FSM has made efforts to limit the ability of
franchises to operate in the FSM. Franchises have no trademark
protections. There is a "Wall Mart" and a "Best Buy" store in
Pohnpei, but they are not affiliated to the U.S. brands. The
local NAPA and ACE Hardware stores, however, are tied to their
U.S. counterparts. If an unaffiliated NAPA or other company
were to open, it is unclear if the original stores would have
any protection on using the name exclusively.


7. (SBU) Asher and Rescue confirmed that there have been no
trademark or copyright infringement prosecutions in the FSM to
date. Commenting specifically on the abundance of pirated DVDs
within the FSM, Rescue stated people just are "not aware of the
law." If the copyright laws were ever enforced, people would
quickly change their habits concerning pirated DVDs. Asher
conceded that perhaps the FSM should put some effort into public
education on the matter. These views coincided with Etscheit's
comments that if the government made some effort to highlight

KOLONIA 00000142 002 OF 002


the illegality of pirated videos he would be able to compete.
Etscheit believes even minimal fines or confiscation of some of
the pirated DVDs would make a dramatic difference.


8. (SBU) When asked why there had been no prosecution of piracy
cases to date, Asher stated that there is no case history for
his office to rely upon. Rescue opined that if Etscheit were to
bring a case to court, it might create the case history on which
the state could base future actions. Asher cautioned, however,
under current FSM law the courts may decide that the original
authors would have to bring the case to court. Etscheit, as a
theater owner, does not have the legal standing to file a
complaint.


9. (SBU) Asher and Rescue agreed that they would like to see a
case brought before the FSM courts on copyright protection,
saying the judiciary needs to address the issue. The only
option they currently see is for producers, of one of the films
shown at Pohnpei Theater, to grant permission to Etscheit to
represent the producer's interests in the FSM courts. Asher and
Rescue, however, are unsure how that would proceed in court.


10. (SBU) Etscheit, through his Attorney Stephen Finnen, tried
to raise his concerns with the National Attorney General. In an
October 23, 2008 letter to FSM Attorney General Maketo Robert,
Finnen asked that the "FSM take action on this issue." At a
minimum, Finnen requested the Attorney General's "opinion on the
enforceability of overseas copyright laws in the FSM." To date,
there has been no response beyond stating that he would instruct
Asher look into the matter.


11. (SBU) During a November 12 meeting, Finnen explained why
Etscheit had not gone to court. He, along with the state and
national Attorney General Offices, were unaware of the FSM's
obligations under any international treaties to protect foreign
copyrights. In addition, in any civil trial Pohnpei Cinema
would have to prove damages. Etscheit would be unable to
provide baseline information comparing Pohnpei Theater ticket
sales when movies are available on pirated DVDs vice when
pirated DVDs are not available (every movie is available prior
to the film's release in Pohnpei). There is also a question of
Etscheit's "standing;" it is not clear that he can bring the
case forward.


12. (SBU) According to Finnen the goal of any case would be for
Pohnpei Theater to be able to operate as a legitimate and
hopefully profitable business. Criminal enforcement against
those pirating DVDs is the one measure he thinks would
accomplish that goal. Given the current legal climate in the
FSM, Finnen does not anticipate positive changes anytime soon.

Comment
--------------


13. (SBU) The local rumor mill is that the FSM does not want to
enforce copyright laws. There is no mechanism to copyright
material within the FSM; therefore, all copyrights are foreign
owned. More to the point, the government seems to see the
multitude of stores selling pirated DVDs as legitimate
businesses that are providing employment in and service to the
local community. Without any push from representatives from
outside the FSM, Post anticipates no movement to protect foreign
copyrights within the FSM. Thus, the only way Pohnpei Theater
will remain open is if the Etscheit family, which is quite large
and extended, decides to keep underwriting the theater on behalf
of the community. End Comment.
DOUGLASSWD