EU PATENT BREAKTHROUGH DURING SWEDISH PRESIDENCY AND

UNCLAS SECTION 01 OF 03 STOCKHOLM 000776 STATE FOR JOELLEN URBAN STATE PASS TO USTR FOR DAVID WEINER AND KIRA ALVAREZ SIPDIS SENSITIVE PLEASE PROTECT TAGS: KIPR EINT ETRD ECON PGOV SW SUBJECT: EU PATENT BREAKTHROUGH DURING SWEDISH PRESIDENCY AND GENERAL IPR/INTERNET PIRACY UPDATE Ref: A) STOCKHOLM 736, B) STOCKHOLM 733, B) STOCKHOLM 676 STOCKHOLM 00000776 001.2 OF 003 ¶1. (U) Summary: The EU Competitiveness Council, chaired by Swedish Trade Minister Ewa Bjorling, managed to broker a deal after over 40 years of efforts to agree on a unified EU patent system. Swedish Minister for Communications, Esa Torstensson discussed Swedish concerns about the ongoing ACTA negations at a meeting at USTR. Sweden is in the process of recruiting a National Coordinator within the Swedish Police, who will coordinate IPR related investigations. This will greatly facilitate the work for Sweden's two specialist prosecutors. Furthermore, the Police authorities plan to have completed the recruitment of the 15 investigative officials during the first half of 2010. Our industry contacts tell us that this is the key issue going forward -- far more important than IPRED. Notwithstanding, the IRPED-legislation (implementation of the EU Enforcement Directive) has spurred a 40 percent increase in DVD sales of newly released movies since the law entered into effect on April 1, 2009. End summary. EU Patent breakthrough -------------- -------------- -------------- ¶2. (U) On December 4 the EU Competitiveness Council battled toward a so-called 'general approach' on a future patent system, together with an agreement on the basis of a draft regulation for European Union patents. The issue has bogged down the European Commission and the Council for over 40 years. Today, the cost of getting an EU-wide patent is eleven times that of getting the same protection in the U.S. The Council conclusions also contain the main elements of a single European Patent Court that will try cases on both the EU patent and existing European patents. In today's system, patent processes for one and the same invention must be conducted separately in each Member State. The establishment of a single court could mean annual savings of up to USD 42 billion for European companies. ¶3. (U) Leading the objections to the Swedish EU Presidency's proposal for a general approach was Denmark. The Danes, though, finally withdrew their legalistic objections after it became clear that changes to the Swedish proposal would not be acceptable. The �0A;Swedish 'general approach' on the EU patent regulation means a real breakthrough. The all important issue of translation will now be left for agreement at a "later" date. ¶4. (U) The agreement paves the way for further discussion, under Spanish and other Presidencies, towards a future patent system. This would be based on two main pillars. Firstly, a unified patent litigation system with exclusive jurisdiction for civil litigation related to patent infringements and validity of EU and European patents. There would be a court of first instance comprised of a central division as well as local and regional divisions (in member states). There would also be a court of appeal. ¶5. (U) Comment. This is a major accomplishment of the Swedish Presidency. It was the top EU Presidency priority of Trade Minister Bjorling. The issue has been blocked for over 40 years. Sweden made a serious effort to break the deadlock during its EU Presidency in 2001. Although the tricky language question remains, it is likely that it will be possible to solve that piece separately. This breakthrough on a European patent is a welcome addition to the Swedish list of accomplishments during the Presidency, which includes the Lisbon treaty, the future leadership, climate financing, and the Stockholm Program. End comment. ACTA -------------- ¶6. (U) Even though Asa Torstensson's Ministry, the Ministry of Enterprise, Energy, and Communication has no ACTA negotiations mandate; she raised the issue of openness and the ACTA during her visit to the United States. She publicly summarized her trip as follows: "I was invited by Peter Cowhey (USTR) to describe the experience of the telecom-package, and the debate and discussion that followed. I also described how a similar debate is now gaining force, as we discuss the ACTA texts -- without even having seen them. That is why openness for the duration of the discussions is so important." Torstensson further said she had explained to Cowhey that it will not be possible to reach ACTA conclusions which go beyond the scope of the telecom package. "I explained the complexity of the issue of streamlining efforts on the telecom market, and the balance between regulations that ensure internet users' interests. I also said that the telecom package has meant reinforcements of the rights of the internet users," Torstensson told reporters. She also told Swedish reporters that she understood the U.S. position that negotiations must be kept secret and that she felt that Cowhey understood and respected her position as well. The Swedish Justice Ministry has the lead on the ACTA negotiations, and ACTA was not the reason for Torstensson's visit but she still believes that "it is important to have as open negotiations as STOCKHOLM 00000776 002.2 OF 003 possible. We then avoid speculations on what the texts include or involve. It is beneficial to all parties if negotiations can take place openly, as we then can remove our focus from issues which are not part of the ACTA." Sweden continues to strengthen IPR Enforcement structures -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- ¶7. (SBU) Justice Ministry contacts informally told us about an upcoming change of the organization for the two specialist prosecutors with national IPR competence. The two will work under the International Prosecutors' Chamber at the Prosecutor General's office, together with the Specialist Unit for Corruption issues and the Internal Controls Unit. This organizational change is much welcomed by the rights-holders organizations. Furthermore, Swedish police are in the final stages of recruiting a National Coordinator, who will be responsible for channeling and prioritizing IPR related investigations. This will have a great impact on the effectiveness of the prosecutors. Another key part of the puzzle is the recruitment of additional investigative officials. The Swedes have told as that they intend to have 15 dedicated investigative officials in place by the end of the first half of 2010. A close contact at the Anti-Piracy Bureau told us that "this is all that matters now, IPRED and its effects are nothing compared to this." IPRED legislation works -------------- -------------- -------------- -------------- ¶8. (U) The Sodertorns District Court decided on December 4 that ISP Telia is obliged to hand over the identity of the customer that has been operating the website Swetorrent where thousands of IPR protected works have been made available (illegally) to approximately 20,000 users. A number of Swedish movie corporations have, with the help of The Swedish Anti- Piracy bureau, requested that Telia hand over information about the identity of the persons behind the IP number which operates the Swetorrent site. Swedish Anti-Piracy Bureau has previously warned the website operator but the operator continued its operation. "It is no longer possible to protect illegal activity behind an IP number. Today's decision shows that it is the owner of the copyright protected material who will be protected rather than the perpetrator," says Sara Lindback, Legal Counsel at the Swedish Anti Piracy Bureau, following the decision. ¶91. (U) This is the second District Court ruling where ISPs have been forced to handover information on IP users. The previous decision was turned over on appeal and is currently appealed to the Swedish Supreme Court, which has ordered that the ISP is not allowed to destroy information related to the suspected IP number. IPRED legislation effects felt -------------- ¶10. (U) As previously reported, the IPRED legislation may have caused ISPs to remove IP numbers sooner rather than later, but there have also been benefits. In Sweden sales of newly released DVDs have increased by 40 percent since the IPRED legislation went into effect on April 1, 2009. According to the owner of the legal downloading site for movies, Film2home, downloads of movies have increased six-fold. ¶11. (U) Although 40 percent is a huge number, the increase in sales might not be entirely a result of IPRED regulations. The new movie "Men that Hate Women" have sold in 300 000, which is unusually high for any newly released movie in Sweden. ¶12. (U) The Music Business is also experiencing an increase in sales; 18 percent during the first nine months of 2009. The sale of hard copies increased by 9 percent whereas digital sales increased by 80 percent. During 2008 music sales fell by 7 percent. ¶13. (U) Other IPR news in brief --Portlane tracker still up Stockholm District Court decided not to order Internet Service Provider (ISP) Portlane to remove its tracker pending a legal hearing. "To already prior to the legal hearing order the removal of a tracker would create a too great burden on ISPs," Jonas Forzelius (legal counsel for Portlane) explained following the decision. -- Voddler gets competition as another free streaming movie site is launched As previously reported, Voddler has been well received in Sweden and internet users are lining up to get access. However, their instant success as a result of being the only service provider that provides movies without a cost may be threatened. Another Entertainment Service Provider, HDMT.net, also providing streamed movies without a STOCKHOLM 00000776 003.2 OF 003 cost was recently launched. The site collects and compiles movies and series which are already available online, and stream them over their services. The legality of the service has been questioned. BARZUN