MADRID IPR CONFERENCE: GOS MOVES TOWARDS

UNCLAS SECTION 01 OF 04 MADRID 001152 SENSITIVE SIPDIS STATE FOR EUR/WE AND EEB/TPP/IPE STATE PASS USTR FOR D.WEINER AND J.GROVES STATE PASS U.S. COPYRIGHT OFFICE FOR M.WOODS AND M.PALLANTE COMMERCE FOR 4212/DON CALVERT COMMERCE ALSO FOR USPTO E.O. 12958: N/A TAGS: KIPR ETRD ECPS SP SUBJECT: MADRID IPR CONFERENCE: GOS MOVES TOWARDS ANTI-INTERNET PIRACY MEASURES REF: A. MADRID 1137 ¶B. MADRID 1096 ¶C. MADRID 1075 ¶D. MADRID 1052 ¶E. MADRID 982 MADRID 00001152 001.3 OF 004 SUMMARY ¶1. (U) As part of FICOD 2009 (see ref A),on November 18 the Spanish government hosted a Conference on IPR in the Digital Environment. The Conference featured several speeches and a series of roundtables on different aspects of online IPR protection. Michele Woods of the U.S Copyright Office was a panelist in a roundtable on policies and legislative measures. MPAA CEO Dan Glickman delivered remarks outlining the rights-holders' point of view. The Conference was informative, with high-quality presentations The roundtable discussions helped shed light on efforts underway in various countries to address the problem of Internet piracy; the Conference was thus particularly timely as the GOS is expected to unveil a series of measures to combat piracy-promoting websites by the end of the year. ¶2. (SBU) MPAA CEO Glickman told the Charge that his meetings with the two Ministers most responsible for combating Internet piracy were encouraging. Minister of Industry, Tourism, and Trade (MITYC) Miguel Sebastian told Glickman unambiguously that the Inter-Ministerial Commission's recommendations will include an administrative course of action to block or take down pirate websites. MITYC had heretofore been believed to oppose such an approach, and Sebastian's embrace of it may be a sign that the GOS is preparing to implement measures with teeth, though not as much as rights-holders would like to see. End Summary. ¶3. (U) MITYC's Secretariat of State for Telecommunications and the Information Society (SETSI) organized the conference as part of the third annual FICOD. It opened with an address by Paul Brown, Vice-President of Spotify, a free, legal online music service that has recently become available in Spain and that was also featured recently in Economist articles about successes in reducing online music piracy. Spotify is supported by advertising revenue or, for those who wish to avoid the ads, paid subscriptions. The increased �A;prevalence of legitimate vehicles for making content available, and the need for much more legal content online as a means of reducing the temptation to pirate, were major recurring themes of the conference. LEGISLATIVE ISSUES ¶4. (U) The roundtable on policies and legislative measures included government officials from the U.S., the UK, Germany, Sweden, and France, and a WIPO representative. Michele Woods, Senior Counsel for Policy and International Affairs at the U.S. Copyright Office, discussed the Google Books case, its Revised Settlement Agreement, and implications for orphan works. Steve Rowan of the UK Intellectual Property Office (IPO),reported on recent developments in that country, including new draft legislation adopting a "three strikes" approach, which involves cutting Internet service to those who repeatedly download illegally. Representatives of the German and Swiss Justice Ministries addressed various enforcement issues, including implementation of the EU Enforcement Directive and prosecution of the Pirate Bay principals. A French Culture Ministry official updated the audience on the HADOPI law, which after many setbacks is to take effect at the beginning of the year with the promulgation of implementing regulations. It is evident that in the United States and many European countries, there is a great deal of activity taking place on a variety of fronts. APPROACHES TO COMBATING ONLINE PIRACY ¶5. (U) The roundtable on The Fight Against IPR-Infringing Activities on the Internet was moderated by Guillermo Corral, Director General for Policy and Cultural Industries at the Ministry of Culture, who spoke about GOS efforts to encourage negotiations between the Coalition of Creators and Content Industries and the Internet Service Providers' (ISP) association (Redtel). He also alluded to the Inter-Ministerial Commission formed October 9 (ref D) to make MADRID 00001152 002.3 OF 004 recommendations to the government. The first panelist, Aldo Olcese, spoke of changes that have taken place in his first year as president of the Coalition, which previously consisted of copyright management entities and various film and music producers and distributors and audiovisual groups. The Spanish Association of Video Game Publishers and Distributors (aDeSe) joined the Coalition in January, and Spain's major book publishing industry association joined later in the year. Awareness on the part of the government and the general public has grown, Olcese said, and the content providers don't feel as isolated as they did before. He characterized continuing efforts to finalize an agreement between the Coalition and Redtel as "difficult" and predicted that such an agreement will only be realized "at the last minute." ¶6. (U) Olcese outlined what he called the "Spanish model" for combating piracy, a model which he characterized as "more democratic" than the approach in other countries, as it seeks to reduce online availability of pirated material while leaving the end user alone. The Spanish model is focused on the producers and distributors of pirated content, the pirates' "supermarket." Per ref D, on October 19 the Coalition delivered a list of 200 alleged commercial-scale pirate websites to the MITYC to be passed to the Prosecutor General's Office (Fiscalia) for investigation and prosecution, and also urged MITYC to take independent action against the sites. (Comment: It remains unclear what authority MITYC may have beyond the ability to levy modest fines, nor are we aware whether the any GOS entity is contemplating action against any of the listed websites. End Comment.) At the same time, the Coalition has been actively developing a "business model' approach and plans to launch a "macro website" to help users in Spain gain access to legal content online so that they will be less inclined to download it without authorization. Both MITYC and the Ministry of Culture have expressed the intention to provide financial support to the macroweb. Olcese noted that identifying the right mix of incentives and sanctions to deter Internet piracy is still a matter of trial and error; nobody knows which model will work best. ¶7. (U) Maria Teresa Arcos, Executive Director for ISP association Redtel, hailed the creation of the Inter-Ministerial Commission and said the ISPs seek the continued growth of a legal online market and an end to the dichotomy between technology and culture. She also cited the European Parliament's recent approval of the telecom package" and the importance of finding a balance between competing rights. While acknowledging the importance of dissuasive measures, Arcos focused on the need for attractive legal offer with flexible prices and said Redtel looks forward to the launching of the Coalition's macroweb. ¶8. (U) Jesus Rubi of the Spanish Data Protection Agency (AEPD) stated that data protection is not inimical to intellectual property protection. He noted, however, that under Spanish law, Internet Protocol addresses and their association with individual users are personal data and thus protected from disclosure in most circumstances. Under the European Court of Justice's January 2008 ruling in Promusicae v. Telefonica, ISPs are not required to disclose users' identities in civil litigation, and governments are not obliged to compel them to do so. Governments are only required to seek a balance between privacy and property rights. Rubi noted that the Congressional Sub-committee on Intellectual Property had recently sent a questionnaire to AEPD, which had replied by suggesting several points to be taken into account if Congress wishes to consider amending existing legislation. RIGHTS-HOLDERS' CONCERNS ¶9. (U) Juan Junquera, Chief of Staff to Secretary of State for Telecommunications and the Information Society Francisco Ros, moderated the panel on the rights-holders' point of view. Olivia Regnier of the International Federation of Phonographic Industries (IFPI) cited figures showing that 95 percent of peer-to-peer (P2P) downloads of music are unauthorized and thus illegal. She also pointed to figures showing a steady decline in traditional music sales in Spain since 2001 and said called for more cooperation on the part MADRID 00001152 003.3 OF 004 of ISPs in combating illicit downloads. ¶10. (U) Dan Glickman, Chairman and CEO of the Motion Picture Association of America (MPAA),referred to President Zapatero's October 21 speech to the American Business Council (ref D) in which he outlined the concerns of both the USG and the GOS over IPR protection in Spain. Calling piracy a "dagger through the heart" of creators, Glickman noted that great quality works of art require both a conduit and an artist. The Internet can be a powerful tool for the dissemination of culture but also poses unique challenges for which there is no magic solution. Voluntary agreements with ISPs are welcome but are not enough in themselves; government has a necessary role to play. The digital environment will continue to grow as a medium for cultural transmission, but the physical environment should not be overlooked. The notion of "free content," while seductive to some, is an invitation to anarchy. Legal online offers of content will not work unless they are well-implemented within an adequate legal infrastructure. Glickman stressed the importance of a constructive, balanced solution and said MPAA looks forward to the GOS announcement of concrete measures by year's end. ¶11. (U) Antonio Guisasola of the Music Producers of Spain (Promusicae),in an oblique reference to State Secretary Ros's characterization (ref E) of Spain's Internet piracy problem as an "urban legend," sought to dispel two urban legends of his own. The first is that the music industry wants to do away with the Internet; the second is that a lack of legal online alternatives is the reason piracy flourishes in Spain. There are, he said, 370 legal music services in Europe, with more appearing all the time. Consumers are able to choose from among a range of options and are increasingly getting better deals. Guisasola announced the launch of Promusicae's own portal, www.elportaldemusica.es, to link Spanish users to prominent legal sites. But legal offer, he said, is not enough. He cited a Jupiter Research Study showing that 32% of users in Spain frequently use P2P facilities, compared to an average of 15% for Europe. Of those, 52% say that free downloading has reduced their purchases of original music. Also, only 32% of Spaniards surveyed said they thought P2P activity was illegal, compared to 64% in France, 79% in Germany, and 70% in Europe as a whole. Guisasola said more cooperation is needed from ISPs, and there must be a credible risk of real punishment to deter wrongdoers. Carrots can help, but sticks are needed as well. Responding to Junquera's reminder that P2P is not illegal per se, but is a technology that can be put to legal or illegal uses, Guisasola countered that almost all P2P downloads of music are illegal. ¶12. (U) During the question-and-answer period, one questioner asked whether the Inter-Ministerial Commission will recommend dissuasive action only against websites that house infringing material, or also against P2P portals. Junquera replied that the GOS is constrained from going after P2P activity by the basic Constitutional principle protecting private communications from government interference. IFPI's Olivia Regnier demurred, pointing out that P2P activity is a form of public, not private, communication. Junquera, however, reiterated that the focus of GOS enforcement efforts will be on websites that host or provide links to infringing content. He also sought to clarify State Secretary Ros's "urban legend" remark, which has been much-criticized by content providers. The GOS, he said, does not deny that Internet piracy is a serious problem in Spain, deserving of government attention. The GOS does, however, take issue with assertions that Spain has significantly higher rates of Internet piracy than its European neighbors, and that it is among the worst in the world in this regard. ¶13. (U) The Conference included one final roundtable, on implications for IPR of online social networks, and a speech by Duke University Law Professor James Boyle. COMMENT ¶14. (SBU) Though 2009 has been a frustrating year for right-holders, there is a good chance it will end on a positive note. In a meeting with Charge, MPAA CEO Dan Glickman expressed satisfaction with his meetings with Industry, Tourism, and Trade Minister Miguel Sebastian and MADRID 00001152 004.3 OF 004 Minister of Culture Angeles Gonzalez-Sinde. Sebastian, he said, was quite forthright and specific about the Commission's work: It will deliver its recommendations by year's end; these will include amending the law to give government more tools to combat piracy; and one component will be "an administrative course of action" to block offending websites. According to various sources, State Secretary Ros (who reports to Sebastian and was present at his meeting with Glickman) and his staffers had been opposing such an administrative remedy in the Commission's discussions (refs B-C),but have apparently been brought around by the other Ministries represented. Rights-holders, however, remain concerned that the government may implement only half-measures. Promusicae staged a demonstration in front of MITYC on December 1 and presented Minister Sebastian with a peition signed by 2,500 music professionals calling on the government to take "valiant measures, as the French and British governments have already done, to protect their culture and jobs." End Comment. CHACON