ID

130577

Etiquetas

ECON, ETRD, KIPR, PGOV, ADCO, SP

Fecha

2007-11-19 09:03:00

RefID

07MADRID2128

Origen

Embassy Madrid

Clasificación

CONFIDENTIAL

Destino

07MADRID1807

07SECSTATE107629

Encabezado

VZCZCXRO9689

RR RUEHAG RUEHROV

DE RUEHMD #2128/01 3230903

ZNY CCCCC ZZH

R 190903Z NOV 07

FM AMEMBASSY MADRID

TO RUEHC/SECSTATE WASHDC 3815

INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

Contenido

C O N F I D E N T I A L SECTION 01 OF 06 MADRID 002128

SIPDIS

SIPDIS

@ELIMINADO@

E.O. 12958: DECL: 11/15/2012

TAGS: ECON, ETRD, KIPR, PGOV, ADCO, SP

SUBJECT: USG REPRESENTATIVES REITERATE INTEREST IN WORKING

WITH SPAIN ON COPYRIGHT ISSUES IN CONNECTION WITH NOVEMBER

7-8, 2007 MADRID CONFERENCE

REF: (A) MADRID 01807 (B) SECSTATE 107629

Classified By: Deputy Charge d'Affaires a.i., Hugo Llorens, for reasons

1.5 b and d.

1. (U) Summary: Associate Register of Copyrights David

Carson, U.S. Patent & Trademark Office Senior Counsel Michael

Shapiro and Deputy Chief of Mission Hugo Llorens used the

Spanish government organized Madrid November 7-8, 2007

"Conference on Intellectual Property Rights in the Digital

Environment" to reiterate to the Spanish government our

continuing interest in working with Spain on

copyright-related intellectual property rights (IPR) issues.

Ministry of Industry, Tourism and Trade Secretary of State

Francisco Ros expressed an interest in judge-to-judge

exchanges on IPR matters. The Spanish government's view

remains that Internet Service Providers (ISPs) and content

providers should engage in self-regulation to limit internet

piracy. However, the government is considering mandating

that ISPs include in service contracts a provision that

service can be cut off if users infringe copyrights.

Moreover, the government is considering making a special

effort to encourage stakeholders to move quickly on an

internet notice system, leaving takedown for later. These

would be positive steps that would begin to address U.S.

concerns. Para 2 provides background. Paras 3-4 report on

the U.S.-Spain bilateral held on the margins of the

conference. Paras 5-6 report on the lunch DCM hosted in

connection with the conference. Paras 7-8 report on an

industry-government meeting held following the conference.

Para 9 summarizes highlights from the conference. Para 10

contains an Embassy concluding comment. End Summary

BACKGROUND

----------

2. (C) The Spanish government is aware that it came very

close to being watchlisted during the latest Special 301

process. This no doubt partly explained Secretary of State

Ros' desire to host the November 7-8 conference. His staff

made a point of inviting David Carson from the Copyright

Office to speak at the conference. The organizers also

invited representatives from the UK, France, South Korea and

the EU, as well as important local stakeholders. The

government is juggling sometimes conflicting objectives.

These objectives include, but are not necessarily limited to:

increasing broadband internet penetration, thereby benefiting

national champion Telefonica; limiting piracy both because

the Spanish government agrees with that objective and also to

keep Spain off the Special 301 watchlist; and containing the

possible political damage caused by consumer groups and

internet surfer ("internauta") groups. There are not many

Spaniards in the latter category, but they have a media

impact out of all proportion to their numbers. With

elections coming up in March 2008, the government is

sensitive to them.

U.S. - SPAIN BILATERAL

NOVEMBER 7, 2007

----------------------

3. (U) Participants: DCM Hugo Llorens, Associate Register of

Copyright David Carson, U.S. Patent and Trademark Office

Senior Counsel Michael Shapiro and Economic Officer Carl

Schonander participated for the U.S. Ministry of Industry,

Tourism and Trade Secretary of State for Telecommunications

Francisco Ros was accompanied by Chief of Staff Juan Junquera

Temprano and Subdirector General for Information Society

Services Salvador Luis Soriano Maldonado.

4. (C) DCM said that the U.S. remained very interested in

working with Spain on combatting internet related copyright

piracy, and that the conference was a laudable initiative.

Ros emphasized that the problems discussed at the conference

were "important" and "difficult." He expressed pleasure that

the attendees were "first level." Ros said that the internet

had to accomodate different business models, including those

who favored traditional copyright protection and those who

were interested in other models. Junquera said that it was

very difficult to change the "mentality" of Spaniards with

respect to internet downloading even though the government

had conducted several anti-piracy campaigns. He also said

that legal instruments were available to rights-holders to

protect their their intellectual property. Carson emphasized

that the U.S. experience was that public awareness campaigns

MADRID 00002128 002 OF 006

had to be accompanied by the prospect of "personal

consequences" for those who engaged in internet piracy. Ros

said that Spanish law did, in fact, permit action against

internet pirates, although the law had not been used

adequately by rights-holders. He also explained that his

ministry's proposed notice and takedown legislation had been

struck down because the Council of State found that the

proper consultation procedures had not been followed.

Shapiro recounted that a conference participant had said that

the cultural industry accounted for 4% of Spain's GDP and

that this should be kept in mind in framing internet piracy

policy. Ros reiterated that Spanish law provided for ways in

which rights-holders could protect their property, although

his Chief Staff added that the law was very "garantista,"

which in practice made it difficult for rights-holders to

protect their intellectual property. Shapiro suggested the

possibity of meetings between U.S. judges and Spanish judges

to compare experiences on how to deal with internet-related

piracy matters. Ros said he would talk to his Ministry of

Justice counterpart about this possibility. Soriano

mentioned that in the last two months, Spanish police had

shut down two internet portals and that the owners were being

prosecuted. (Note: Rights-holders typically have nothing but

praise for the police. Rights-holders' complaints center on

the judiciary, as well as a Justice Ministry "circular" to

prosecutors that effectively decriminalizes peer to peer file

sharing unless there is a commercial profit motive.) Ros

concluded by saying that his ministry would focus on judge to

judge meetings and more publicity campaigns.

DCM-HOSTED LUNCH

NOVEMBER 8, 2007

----------------

5. (U) Participants: Industry Ministry Subdirector General

Salvador Soriano, Industry Ministry Advisor for EU Trade

Policy Carmen Jordan Asensi, Promusicae Chairman and CEO

Antonio Guisasola, Federacion Antipiratera (FAP) Director

General Jose Manuel Tourne, Spanish General Society of

Authors and Publishers Corporate Relations Director Pedro

Farre Lopez, Microsoft Iberia Director Arnedo Txema, National

Association of Electronic and Telecommunications Industries

(AETIC) President D. Edmundo Fernandez participated from the

Spanish side. DCM Hugo LLorens was accompanied by Economic

Counselor James Dudley, David Carson, Michael Shapiro and

Carl Schonander.

6. (C) DCM opened by saying that the USG remained committed

to working with Spain to find ways to combat internet piracy,

and that he hoped the conference and the lunch would prove to

be two fora that contributed to achieving this goal. The

lunch exposed once again the divisions between the content

providers and the ISPs. The AETIC representative (AETIC

represents major ISPs such as Telefonica) emphasized that no

notice and takedown system for the internet could be

developed without "legal security." Content providers

complained that it was virtually impossible to obtain

information from ISPs on customers suspected of trafficking

in pirated property, and that ISPs were too slow to act

against internet piracy. Complaints from the content

providers were then directed to the Ministry of Industry,

Tourism and Trade representative, Salvador Soriano. He said

that the government remained committed to self-regulation

among the stakeholders. Soriano acknowledged, however, that

in the meantime a tremendous amount of piracy was taking

place on the internet. He suggested that the government and

stakeholders focus on developing a notice system for the

internet, leaving takedown for later.

CONFERENCE GENERATES MOMENTUM

IPR INDUSTRY - GOVERNMENT MEETING

NOVEMBER 13, 2007

---------------------------------

7. (C) Chief of Staff Juan Junquera Temprano and Subdirector

General Soriano met with FAP Director General Jose Manuel

Tourne and Promusicae President Antonio Guisasola on

11/13/07. (Note: EconOff received a read-out on this meeting

from Tourne.) Tourne said that Junquera had agreed to work

on the following measures:

a) An amendment to the 2002 Information Society Law in

Article 16.1 that would absolve ISPs of liability with

respect to rights-holders if they acted pursuant to voluntary

agreements with rights-holders. This would provide a measure

MADRID 00002128 003 OF 006

of legal security for ISPs with respect to lawsuits generated

by rights-holders, although presumably ISPs would still be

liable for "consumer" generated lawsuits. The point of this

legal amendment would be to encourage content provider-ISP

anti-piracy agreements.

b) Contracts between ISPs and customers would include a

clause stating that ISPs can suspend service to customers who

are found to be infringing copyrights.

c) A government-sponsored "urgent" negotiation on a notice

process, leaving takedown for later.

d) Assess the current "private copy" exception's negative

impact and make clear to the public that peer to peer

downloads are illegal.

e) Encourage sectoral meetings with a view to creating a

climate favoring the protection of content on the internet.

8. (C) Comment: In principle these measures are positive.

However, we have seen the Ministry of Industry, Tourism and

Trade promise action to the content industry in the past and

then fold when faced with opposition. Indeed, Tourne

received an 11/14/07 phone call from Junquera saying that

Senate approval would be difficult to obtain for the first

measure. Rights-holders and the government have agreed on a

low key approach for now. However, if the government wants

to do something serious to protect content on the internet,

it will have to withstand some criticism.

HIGHLIGHTS FROM

THE CONFERENCE

---------------

9. (U) For those who are interested in a conference agenda,

please contact Carl Schonander at SchonanderCE@state.gov.

Conference highlights follow below.

Secretary of State

SIPDIS

for Telecommunications

Francisco Ros

----------------------

Ros opened the conference. He spent a lot of time talking

about the vast quantities of information on the internet.

The Secretary of State emphasized the need for

self-regulation among the stakeholders. He called for

internet regulation which respected different business

models, including a model based on traditional copyright law.

Douglas Lippoldt

Directorate for

Science, Technology

and Industry, OECD

-------------------

Lippoldt mentioned the OECD's emphasis on fostering

innovation and shared tentative empirical findings suggesting

a positive relationship between protection for IPRs and the

flow of FDI.

Michael Keplinger

Deputy Director General

WIPO

-----------------------

Keplinger went through the fundamental tenets of the internet

treaties and mentioned that WIPO has posted a guide to the

treaties on its website. He said WIPO was committed to

creating an IPR "culture".

Tilman Luder

Unit Chief

DG Internal

Market and Services

European Commission

-------------------

Luder said that his Commissioner, Charles McGreevy, firmly

believed that "less is more" and that the EU was therefore

currently in an "evaluation mode" with respect to IPR

legislation in Europe. He spent quite a bit of time

reviewing a number of European cases that have to do with

MADRID 00002128 004 OF 006

defining what a reproduction is. He said that the Commission

was reviewing how effective ISPs were in preventing their

services from being abused to commit copyright policy

violations.

Helen Montluc

Head of Intellectual

Property Office

Ministry of Culture

France

--------------------

Montluc said that President Sarkozy was interested in

reducing internet piracy. The head of France's biggest music

retailer, FNAC, was working with stakeholders on proposals.

Montluc acknowledged that peer to peer file sharing caused

"grave damages". She said that peer to peer file sharing

must be curbed. The French government is considering whether

to reform the criminal code to provide for "proportional

sanctions" more along the lines of traffic fines, rather than

the maximum of three years in jail and/or a euros 300,000

fine that the law currently permits.

David Carson

Associate Register

U.S. Copyright Office

---------------------

Carson gave two presentations focusing on the main provisions

of the Digital Millenium Copyright Act (DMCA) and ISP

liability. He reviewed other legislation affecting ISP

liability and the Napster and Grokster cases. Carson

emphasized that consumers must believe that there will be

consequences for illegal downloading if piracy is to be

stemmed. He also suggested that because ISPs are now getting

into the content business, their traditional reluctance to

accomodate rights-holders' concerns may be receding.

Pedro Farre

Corporate Relations Director

Society of Authors and Editors

(SGAE)

------------------------------

Farre made an impassioned plea for understanding that

"content is king" on the internet, i.e. without content

nobody would buy internet services. He noted that cultural

industries represented 4% of Spain's GDP. Farre complained

that the government was not doing enough to stop internet

piracy. He said that the copyright levies that SGAE collects

on the sales of blank CDs and some electronic devices were

only a "palliative" compared with the losses his members were

suffering as a result of piracy.

Barbaro Navarro

Antipiracy Director

NBC Universal Spain

-------------------

Navarro shared information on successful anti-piracy

publicity campaigns in the UK.

Txema Arnedo

IP Development Director

Microsoft Spain

and Vice President

Business Software

Alliance (BSA)

Spain

-----------------------

Arnedo said that Spain's software piracy rate of 46% compared

unfavorably with 20% in the U.S.

Georg Herrnleben

Director for Central and

Eastern Europe, BSA

------------------------

Herrnleben said that the software piracy rate in Spain in

2006 was 10% higher than the EU average, 12% higher than the

western European average, 11% higher than the world average,

and 25% higher than the U.S. average. Herrnleben attributed

this to the fact that small and medium sized businesses are

dominant in Spain, and that they do not take software

MADRID 00002128 005 OF 006

seriously. He also said that retailers, eager to sell

computers, often loaded machines with free software to entice

customers. However, the BSA representative mentioned that

the Spanish government had conducted with BSA awareness

campaigns, and that the police had been cooperative.

Thierry Desurmont

Vice President

SACEM

France

-----------------

Desurmont called peer to peer file sharing "hugely

detrimental". He emphasized that nothing could be done about

the problem without real ISP collaboration. He said the EU's

2000 E-commerce directive needs to be "reopened" because it

does not impose effective responsibility on ISPs.

Luis Javier Martinez

Director of Pixbox

Distribution Platform

Telefonica

---------------------

Martinez acknowledged that content providers (Martinez was a

former Walt Disney executive before taking his current

position at Telefonica) had been slow to pass on some of the

savings that the new technologies made possible to consumers,

thereby contributing to engendering a consumer backlash

against content providers. However, he insisted that the

current culture of "gratis total" (totally free product over

the internet) was not sustainable.

Antonio Guisasola

President

Promusicae

-----------------

Guisasolo noted that in 2006 there was only euros 22 million

worth of legal internet music sales in Spain, and that 87% of

those sales were in the cell phone market. He said this was

because cell phone P2P file sharing does not work so

consumers were compelled to go the legal route for music.

Guisasola said that the big French music retailer, FNAC, did

no internet busines in Spain because internet piracy levels

were too high.

Victor Domingo

President

Internet Users

Association (AI)

Spain

----------------

Domingo said he wanted to issue a "declaration of innocence"

on behalf of internet users. He rejected the notion of

illegal internet downloads, saying that the levy system

compensates creators. Besides, judges had consistently ruled

in favor of internet users. He rejected the notion that

consumers believed in totally free content and referred to

the relatively high prices Spanish consumers pay for internet

service connections.

Juan Junquera Temprano

Chief of Staff to

Secretary of State for

SIPDIS

Telecommunications

Francisco Ros

Ministry of Industry, Tourism

and Trade

-----------------------------

Temprano made it very clear that the levy system did not

compensate for peer to peer file sharing. (Note and Comment:

The levy system theoretically exists to compensate

rights-holders for the private copies that consumers are

allowed to make in Spain. However, the copy has to be from a

legally acquired product. Material obtained through peer to

peer file sharing is not legally acquired so by definition it

is not a copy and therefore outside the levy system.

Temprano's statement was important because there is a

tremendous amount of damaging misinformation in Spain about

the levy system. End Note and Comment)

Jose Manuel Tourne

MADRID 00002128 006 OF 006

Director General

Antipiracy Federaton (FAP)

--------------------------

Tourne said that certain aspects of Spanish law had created a

"perfect storm" for the copyright-based industries. Notably,

he said that the "effective knowledge" requirement, i.e. a

court order rather than information provided by a

rights-holder, for ISPs to act against infringers puts

an undue burden on the movie and music industries. Tourne

said that in the UK, Germany and France, the law permitted

rights-holders to provide "effective knowledge" to

rights-holders. In Italy, "effective knowledge" is not

defined according to Tourne. The FAP representative said

that within the EU, Finland has a functioning notice and

takedown system.

Edmundo Fernandez

Electronics and

Environment Director

(AETIC)

--------------------

Fernandez, representing ISPs, said his organization remained

willing to discuss internet issues with rights-holders.

However, he said that AETIC demanded "legal security" for its

members.

COMMENT

-------

10. (C) Clearly, there are limits as to what can be achieved

between now and Spain's national elections, which will be

held in March 2008. However, we will be consulting closely

with industry and the government to see what can be done.

Certainly the kinds of actions described in para. 8 would be

welcome. Embassy appreciates David Carson's and Michael

Shapiro's participation in the bilateral and conference as

they helped highlight the USG's intense interest in internet

piracy. While the GOS will continue to cite political limits

on what it can achieve, the government is aware that it needs

to show some progress for Special 301 purposes.

LLORENS;"