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### Viewing cable 09MADRID1152, MADRID IPR CONFERENCE: GOS MOVES TOWARDS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MADRID1152 | 2009-12-02 12:12 | 2010-12-03 21:09 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Madrid

`

    VZCZCXRO5150
    RR RUEHIK
    DE RUEHMD #1152/01 3361200
    ZNR UUUUU ZZH
    R 021200Z DEC 09
    FM AMEMBASSY MADRID
    TO RUEHC/SECSTATE WASHDC 1520
    INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
    RUEHLA/AMCONSUL BARCELONA 4248
    RHEHNSC/NSC WASHDC
    RUCPDOC/DEPT OF COMMERCE WASHDC

` `

    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
    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

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