Film Piracy: Austrian Distributors Detail Enforcement

UNCLAS VIENNA 001018

SENSITIVE, SIPDIS

E.O. 12958: N/A
TAGS: ECON EINT ETRD KIPR AU
SUBJECT: Film Piracy: Austrian Distributors Detail Enforcement
Problems, German-Language Piracy Platform "KINO.TO"

REF: Prague 113

Sensitive but unclassified: Protect accordingly.

1.(U) SUMMARY: Austrian film producers and distributors, in
cooperation with the music industry, founded an anti piracy
association (VAP) to fight illegal distribution of DVDs and CDs via
pirated disks and Internet downloads. VAP estimates yearly film
piracy losses in Austria of $4.5 million. The biggest problems are

-- pirated disks produced in the Czech Republic and distributed by
small traders (mainly Chinese and Vietnamese) in Vienna, and --
downloads from the Internet platform KINO.TO where most
international films with German translations are stored (NOTE:
"Kino" is German for "cinema").
A VAP lawyer told us Austria's anti-piracy laws are strong in
principle, but implementation challenges and legal snafus undermine
enforcement. END SUMMARY.


2. (U) Embassy representatives recently met with industry
representatives including VAP (Verein fr Anti-Piraterie der Film-
und Videobranche = Organization for Anti-Piracy in the Film and
Video Industries) General Secretary Werner Mueller, VAP legal
adviser Andreas Manak, and Walt Disney local managing director
Ferdinand Morawetz. In June 2009, VAP drew local attention by
publicly destroying 30,000 pirated copies of movies in Vienna worth
nearly $300,000. VAP blame Chinese and Vietnamese "Mafioso"
networks who distribute the disks, which are mainly sourced in the
Czech Republic.


3. (U) Although film profits in Austria have grown in recent years,
losses remain significant particularly from Internet piracy, say
interlocutors. In Austria and elsewhere in the German speaking
world, the "streaming video" website KINO.TO is the biggest problem
as the origin downloads of films and television series with German
dubbing. Apparently the KINO.TO server is located in Russia; the
internet service provider (ISP) is unknown, and VAP assumes that the
site's "masterminds" are in Germany. Since the domain registration
authority for Tonga refuses to provide data about the domain name
holders, film right holders have no leverage against the site.


4. (U) Morawetz argued the governments should press ISPs to be more
cooperative in cases of alleged copyright infringement and to carry
out aggressive campaigns against illegal downloads. It was
regrettable that illegal downloads are still viewed as a
"peccadillo" rather than a true crime. Morawetz portrayed the
verdict against the "Pirate Bay" activists in Sweden as a model and
praised new French anti-piracy legislation. Morawetz noted though
that Internet platforms can sometimes promote sales (if consumers
like downloaded content, they often buy the DVD or go to a cinema.


5. (U) With regard to pirated disks, VAP representatives said that
the laboratories for optical disks sold in Austria are mostly
located in the Czech Republic and operated there by Vietnamese
immigrants. The police often carry out raids at the Czech-Austrian
border and in illegal warehouses in Vienna (even using sniffer dogs)
but they are only able to catch "smalltime sellers" -- mostly
Chinese. Those caught tend to have strong "clan ties" and never
cooperate with police to send their bosses (who ultimately profit)
to jail. Our interlocutors are aware that the Czech Republic is on
the U.S. Special 301 Watch List and say that nothing has improved
there in recent years. VAP representatives expressed frustration
that Austrian authorities can do little to stop the inflow, since
the Czech Republic belongs to the Schengen area and EU single
market.


6. (U) The enforcement of Austrian copyright law is in line with
"satisfactory" EU directives in this field, but has problems in
practice according to Manak. Manak praised the Austrian system of
"private prosecution" in copyright cases (criminal proceedings can
be initiated by individuals or private organizations),he sees three
serious problems in pursuing police investigations where prosecution
is privately initiated:
-- the police cannot investigate against unknown perpetrators (only
named persons/organizations);
-- it is practically impossible to execute search warrants in
private cases, since defendants must be notified in advance (unlike
in investigations initiated by prosecutors/police);
-- in most private cases, police are not entitled to seize pirated
copies in private houses, nor to clarify identities.
In some private IPR enforcement cases, police have been accused of
breaching the rights of defendants. Manak opined that these
problems could be addressed by introducing slight changes to the
Austrian Code of Criminal Procedure -- or perhaps even through a
different interpretation of current laws by the Ministry of the
Interior.


7. (SBU) COMMENT: Austria's anti-film-piracy representatives express
appreciation that the USG is listening to the industry's concerns.
VAP head Mueller recommended considering Austria for listing under
Special 301 as leverage to convince the GoA to more actively engage
against piracy. While we will be watching the developments, we do
see NOT/NOT see sufficient reason to list Austria in terms of
audiovisual piracy losses (NOTE: the International Intellectual
Property Alliance has not issued a recommendation to list Austria -
END NOTE.) We will press for stronger local enforcement and
prosecution, but Austria remains a relatively small "recipient"
market whereas physical disks are sourced primarily in the Czech
Republic (DVDs, CDs) and websites are operated from Russia and
elsewhere ("KINO.TO" streaming portal). END COMMENT.

HOH