US embassy cable - 04MADRID4299

UNCLAS SECTION 01 OF 02 MADRID 004299 
 
SIPDIS 
 
DEPT FOR EB/IPC WILSON, DEPT PLEASE PASS TO USTR BPECK, DOC 
JBOGER, USPTO JURBAN/MSMITH, DOJ KDORSHOW, DHS RBAE 
 
E.O. 12958: N/A 
TAGS: ETRD, KIPR, SP, Trade Issues 
SUBJECT: SPECIAL 301 MID-TERM REVIEW WITH COPYRIGHT 
INDUSTRIES 
 
REF: MADRID 00736 
 
1. This is an action cable.  See para. 6.1. 
 
2. Summary: Spanish copyright industry representatives said 
at a 10/29/04 DCM-hosted lunch that it was too soon to tell 
where the Zapatero government was going with respect to IP 
protection.  The majority said they had no view at this time 
whether Spain should be put on the Special 301 list next 
year.  The Business Software Alliance (BSA) representative 
said, however, that the U.S. should strongly consider putting 
Spain on the list because IP internet protection was very 
weak, i.e. internet providers (principally Telefonica) were 
not being made sufficiently responsible for protecting 
content from unauthorized downloading.  The participants 
agreed Spanish Customs should crack down on imports of blank 
CDs; that the GOS needed to make a combined public effort 
with internet providers and content companies to deal with 
internet piracy along the lines of a recent French government 
initiative; and, that Spain needed to pass implementing 
legislation for the internet treaties soon.  End Summary 
 
3. The DCM-hosted lunch included Asociacion Fonografica y 
Videografica President Antonio Guisasolo, Pedro Farre Lopez 
(SGAE), Federacion para la Proteccion de la Propriedad 
Intelectual de la Obra Audiovisual (FAP) Legal Coordinator 
Salvador Esteban, Business Software Alliance Director of 
Institutional Relations Carlos Manuel Fernandez, and FEDICINE 
Secretary General Estela Artacho.  EconCouns, Trade Policy 
 
SIPDIS 
Officer, and Econ FSN also participated. 
 
PROBLEMS IDENTIFIED 
------------------- 
 
4. Participants agreed that Spanish police continued to 
conduct an impressive number of raids against IPR pirates, 
and that local police forces especially in Madrid, Catalonia, 
and the Basque region were becoming particularly active in 
this regard.  The new penal code establishing stiffer 
penalties entered into force on October 1, 2004 so industry 
needed to wait to see what effect the new code would have. 
All five IP representatives complained about the lack of IPR 
knowledge among judges and a sense among many members of the 
judiciary that IPR offenses were trivial.  They said they did 
not see a big shift in policy with the Zapatero government. 
However, the SGAE representative said that he thought the new 
government would probably be reluctant to engage forcefully 
in this area because the "social cost" would be too high, 
meaning the political cost incurred by cracking down further 
on the largely immigrant "manteros" (street pirates), and the 
growing generation of younger people who believed downloading 
movies and music and the internet for free was   appropriate. 
 
5. Although street piracy remains a problem, internet piracy 
is fast becoming a more significant issue.  Although Spain 
has signed the WIPO internet treaties, it has not passed 
implementing legislation because the EU Copyright Directive 
(this Directive provides the legal framework for implementing 
the WIPO internet treaties) has not been implemented yet. 
According to a Ministry of Culture contact, the Ministry is 
poised to send to parliament implementing legislation, but he 
would not say when this would happen.  The BSA representative 
complained that the "killer applications" sold by Telefonica 
(by far and away the most important internet provider in 
Spain) allowed subscribers to download movies and music from 
the internet with ease.  He claimed that although Telefonica 
recently, for instance, started offering Apple's iTunes music 
for fee service, it remained unreceptive to discussions on 
how to prevent unauthorized downloading from the internet. 
Separately, a Spanish lawyer told EconOff that the 
fundamental problem was that without appropriate implementing 
legislation, peer to peer operation cannot be effectively 
prosecuted. 
 
WHAT CAN BE DONE? 
----------------- 
 
6.  There was consensus on the desirability of working on the 
following issues. 
 
1) Get Spanish Customs to track and in certain cases prevent 
the unauthorized importation of blank CDs.  Embassy in 
coordination with industry will encourage the GOS to do so. 
Embassy requests information from Customs and Border 
Protection (CPB) regarding whether it has experiences that 
might be worth sharing in this regard with Spanish Customs. 
Such information sharing/training could conceivably be done 
in partnership under the auspices of the USG's recently 
announced Strategy Targeting Organized Piracy. 
 
2. Encourage GOS Ministries of Finance, Commerce, Justice, 
and Interior to announce together with internet service 
providers and content providers a commitment and strategy to 
prevent unauthorized downloading from the internet.  The 
copyright industry representatives agreed that the French 
initiative in this regard announced last July was a "model". 
 
3. Stress the importance to the GOS of passing implementing 
legislation for the internet treaties. 
 
4. Do more to train and sensitize Spanish judges to the 
importance of IPR.  Embassy will explore what can be done 
additionally in terms of speakers and IVs.  In July this 
year,  through the Joint Vistor Program (JVP): "U.S.-Spanish 
Judicial Cooperation", the Embassy nominated and sent two 
Barcelona-based judges to the U.S. for exposure to the 
American IPR system.  Our understanding is that the judges 
had a succesful trip to the U.S.  Unlike in some other 
countries, many Spanish judges are receptive to participating 
in U.S. exchange programs so we will work to identify other 
judges we might potentially nominate for similar trips. 
 
5. Encourage the GOS to launch a public campaign on the 
importance of respecting intellectual property.  All 
copyright industry representatives said this was important 
because such campaigns have until now largely been conducted 
by industry. 
 
 
ARGYROS