US embassy cable - 02ROME1072

UNCLAS SECTION 01 OF 02 ROME 001072 
 
SIPDIS 
 
DEPT FOR EB/IPC:CCONROY, DEPT PLS PASS TO USTR: 
BURCKY/ALVAREZ, DOC FOR LASHLEY, USPTO FOR URBAN, LOC FOR 
POOR 
 
E.O. 12958: N/A 
TAGS: KIPR, ECON, ETRD, ECON, ETRD, IT, ITKIPR 
SUBJECT: 2002 SPECIAL 301 REVIEW: ITALY 
                       UNCLASSIFIED 
 
 
PAGE 02        ROME  01072  01 OF 02  281834Z 
 
REF: A. STATE 12512 
     B. ROME 844 
     C. 01 ROME 6406 
     D. 01 ROME 5916 
 
 1.  SUMMARY:  EMBASSY ROME RECOMMENDS THAT ITALY REMAIN ON 
THE 301 WATCH LIST.  COPYRIGHT PIRACY LEVELS HAVE FALLEN 
SHARPLY SINCE 2000, WHEN ITALY'S NEW COPYRIGHT LAW WAS 
ENACTED.  LAW ENFORCEMENT IS FAR MORE AGGRESSIVE.  HOWEVER, 
PROBLEMS PERSIST, PARTICULARLY WITH THE JUDICIARY, CERTAIN 
MUNICIPAL LEADERS, AND THE SIAE (ITALY'S COPYRIGHT ROYALTY 
COLLECTION AGENCY).  END SUMMARY. 
 
2.  THE IPR SITUATION IN ITALY IMPROVED DURING 2001, WITH 
PIRACY LEVELS DROPPING BY OVER 30 PERCENT FROM 1999, 
ACCORDING TO THE IIPA.  THE ENACTMENT OF THE 2000 COPYRIGHT 
LAW IN SEPTEMBER 2001 RAISED CRIMINAL PENALTIES AND LED TO A 
NEW AWARENESS AMONG LAW ENFORCEMENT OFFICIALS AND THE PUBLIC 
THAT PIRACY IS A CRIME.  LAW ENFORCEMENT COOPERATION WITH THE 
IPR INDUSTRY HAS BEEN VERY GOOD, PARTICULARLY AMONG THE 
CARABINIERI (NATIONAL POLICE WITHIN THE DEFENSE MINISTRY) AND 
THE GUARDIA DI FINANZA (FISCAL POLICE WITHIN THE FINANCE 
MINISTRY).  FAR MORE ARRESTS HAVE MEANT LESS PIRACY, 
PARTICULARLY IN CITIES WHERE THE MAYORS AND PREFECTS SUPPORT 
POLICE EFFORTS. 
 
3. RESULTS HAVE VARIED FROM CITY TO CITY, DEPENDING UPON 
MUNICIPAL OFFICIALS.  FOR EXAMPLE, THE MAYOR AND PREFECT IN 
ROME HAVE BEEN UNWILLING TO ALLOW POLICE TO ACT AGGRESSIVELY 
AGAINST STREET VENDERS OF PIRATED MATERIAL.  AS A RESULT, 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01072  01 OF 02  281834Z 
SUCH STREET SALES HAVE CONTINUED UNIMPEDED.  OFFICIALS IN 
CERTAIN CITIES HAVE ATTEMPTED TO STOP LOCAL CARABINIERI FROM 
ACTING.  ON THE OTHER HAND, TRIESTE CITY OFFICIALS HAVE BEEN 
VERY SUPPORTIVE.  AS A RESULT, IN THAT CITY, STREET VENDORS 
OF PIRATED MATERIAL HAVE ALMOST DISAPPEARED AND PIRACY RATES 
ARE EXTREMELY LOW. 
 
4.   PROSECUTORS AND JUDGES VARY IN QUALITY AS WELL.  MANY 
PROSECUTORS ARE UNWILLING TO BRING CRIMINAL  CHARGES AGAINST 
STREET VENDORS, FACTORY WORKERS OR SHOP WORKERS.   JUDGES ARE 
OFTEN UNWILLING TO CONVICT, ARGUING THAT "MINOR" ECONOMIC 
CRIMES DO NOT JUSTIFY CRIMINAL TREATMENT.  ON THE OTHER HAND, 
AS THE EMBASSY AND CGS HAVE HELD CONFERENCES AND SEMINARS 
WITH THE JUDICIAL COMMUNITY, WE HAVE SEEN A GROWING NUMBER OF 
MAGISTRATES TAKE THIS CRIME MORE SERIOUSLY.  SOME JUDGES HAVE 
BECOME IMPORTANT ALLIES IN OUR EFFORTS. 
 
5.  THE TYPE OF PIRACY HAS VARIED AS WELL.   ACCORDING TO 
FAPAV (THE AUDIO-VISUAL ANTI-PIRACY ASSOCIATION), CASSETTE 
PIRACY HAS DROPPED DRAMATICALLY.  HOWEVER, PIRATED DVDS HAVE 
JUST BEGUN TO APPEAR, AND COULD BECOME A FAR MORE SERIOUS 
PROBLEM.  "SMART-CARD" PIRACY -- COUNTERFEIT PAY-TV CARDS -- 
IS EQUAL TO AT LEAST 50 PERCENT OF THE PAY-TV MARKET IN ITALY 
(REF B).  ON THE OTHER HAND, THE BUSINESS SOFTWARE ALLIANCE'S 
PRELIMINARY EVALUATION OF THE ITALIAN PIRACY RATES INDICATES 
THAT THERE MAY BE A DECLINE IN WHITE COLLAR IN-FIRM ILLEGAL 
DUPLICATION OF SOFTWARE.  REGARDING THE MUSIC INDUSTRY, THE 
FIMI REP INDICATED THAT IT IS DIFFICULT TO ESTABLISH HOW MUCH 
OF THE DECLINE IN CD SALES IS ATTRIBUTABLE TO PIRACY AND HOW 
MUCH TO OTHER FACTORS SUCH AS THE HIGH PRICE OF CDS (OR JUST 
"NOT VERY GOOD MUSIC").  HOWEVER, FIMI CONFIRMED THAT PIRACY 
                       UNCLASSIFIED 
 
PAGE 04        ROME  01072  01 OF 02  281834Z 
IS A KEY PROBLEM WITH STREET VENDORS SWARMING CITY STREETS 
WITH PIRATED CDS. 
 
SIAE:  INSPECTING FOR STICKERS, NOT PIRACY 
--------------------------------------------- ---------- 
 
6.  WE REMAIN CONCERNED BY THE INEFFECTIVE ANTI-PIRACY 
EFFORTS OF SIAE, THE COPYRIGHT COLLECTION ENTITY. IPR 
INDUSTRIES ARE WORKING INTENSIVELY -- WITH ACTIVE SUPPORT 
FROM EMBASSY ROME AND CONSULATES MILAN, NAPLES AND FLORENCE 
-- TO IMPROVE ENFORCEMENT AND EDUCATION.  HOWEVER, SIAE HAS 
BEEN MORE AN OBSTACLE THAN AN ALLY. 
 
7.  IN ACCORD WITH ARTICLE 11 OF THE 2000 COPYRIGHT LAW, SIAE 
IS RESPONSIBLE FOR ANTI-PIRACY EFFORTS IN ITALY.  BECAUSE 
SIAE RECEIVES ALL REVENUES FROM ITS STICKER, WHICH IS 
REQUIRED FOR COPYRIGHTED MATERIALS UNDER THE LAW (WITH THE 
EXCEPTION OF BUSINESS SOFTWARE), IT HAS ADEQUATE RESOURCES 
FOR THESE EFFORTS.   HOWEVER, WE UNDERSTAND THAT SIAE HAS TO 
DATE DIRECTED ITS EFFORTS SOLELY AT INSPECTING LEGITIMATE 
COPYRIGHTED GOODS TO ENSURE THAT THESE CARRY A SIAE STICKER. 
 SIAE HAS DONE NOTHING, TO OUR KNOWLEDGE, TO ACT AGAINST 
ILLEGAL COPYRIGHTED GOODS. 
 
8.  WE HAVE REPORTED  (REF C AND PREVIOUS) ON THE SIAE 
STICKER ISSUE, AND OUR EFFORTS TO RESOLVE IT.   IN LATE 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ2683 
 
PAGE 01        ROME  01072  02 OF 02  281834Z 
ACTION EB-00 
 
INFO  LOG-00   AGRE-00  AID-00   AMAD-00  CEA-01   CIAE-00  CTME-00 
      INL-00   DINT-00  DODE-00  ITCE-00  DOTE-00  SRPP-00  DS-00 
      EXME-00  EUR-00   E-00     FAAE-00  UTED-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   LAB-01   LOC-01   L-00 
      VCE-00   AC-01    NSAE-00  NSCE-00  OES-01   OMB-01   OPIC-01 
      PA-00    PC-01    PRS-00   ACE-00   SP-00    SSO-00   SS-00 
      STR-00   TEST-00  TRSE-00  USIE-00  SNIS-00  NISC-00  DSCC-00 
      DRL-02   G-00     SAS-00     /012W 
                  ------------------6D700D  281834Z /38 
R 281802Z FEB 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 2509 
INFO EU MEMBER STATES COLLECTIVE 
AMCONSUL MILAN 
AMCONSUL FLORENCE 
AMCONSUL NAPLES 
USDOC WASHDC 
 
UNCLAS SECTION 02 OF 02 ROME 001072 
 
SIPDIS 
 
DEPT FOR EB/IPC:CCONROY, DEPT PLS PASS TO USTR: 
BURCKY/ALVAREZ, DOC FOR LASHLEY, USPTO FOR URBAN, LOC FOR 
POOR 
 
E.O. 12958: N/A 
TAGS: KIPR, ECON, ETRD, IT 
SUBJECT: 2002 SPECIAL 301 REVIEW: ITALY 
                       UNCLASSIFIED 
 
PAGE 02        ROME  01072  02 OF 02  281834Z 
 
JANUARY, BSA OFFICIALS MET WITH UNDER SECRETARY LETTA IN THE 
PRIME MINISTER'S OFFICE, WHO PROMISED THAT THE REGULATIONS 
WOULD BE REVISED TO PERMIT ROUTINE EXEMPTIONS FOR BUSINESS 
SOFTWARE.   BSA AND SIAE HAVE HELD FOLLOW UP MEETINGS ON THE 
SPECIFIC WORDING OF THE NEW REGULATION AND THE SPECIFIC 
WORDING OF THE EXEMPTION REQUIREMENTS.   WE ARE MONITORING 
THESE AND URGING SIAE TO MOVE QUICKLY. 
 
9.   INDUSTRY AND EMBASSY EFFORTS AT IPR EDUCATION AND 
ENFORCEMENT, WHILE EXTENSIVE, ARE NOT ENOUGH.   OUR COMBINED 
EFFORTS HAVE IMPROVED THE SITUATION, PARTICULARLY WITH LAW 
ENFORCEMENT AND, IN SOME CASES, WITH THE JUDICIARY.  HOWEVER, 
SIAE HAS THE NATIONAL RESPONSIBILITY AND THE RESOURCES.   WE 
HAVE PRESSED SIAE TO INVOLVE ITSELF IN EDUCATION AND 
ENFORCEMENT EFFORTS, BUT HAVE SEEN NO ACTION YET. 
 
WIPO TREATIES 
--------------------- 
 
10.  ITALY HAS NOT YET RATIFIED THE 1996 WIPO INTERNET 
TREATIES. 
 
AMENDMENTS TO EXISTING LEGISLATION 
--------------------------------------------- --- 
 
11.  ITALY HAS NOT AMENDED ITS 2000 COPYRIGHT LAW AND THE 
IMPLEMENTING REGULATIONS ENACTED IN 2001.  AS STATED ABOVE, 
WE ARE PRESSING FOR AN AMENDMENT TO CERTAIN REGULATIONS TO 
PERMIT ROUTINE EXEMPTIONS FROM THE SIAE STICKER FOR BUSINESS 
SOFTWARE. 
                       UNCLASSIFIED 
 
PAGE 03        ROME  01072  02 OF 02  281834Z 
 
12.  THE ITALIAN PARLIAMENT HAS RECENTLY APPROVED THE 2001 EU 
DIRECTIVES OMNIBUS BILL, WHICH DELEGATED AUTHORITY TO THE GOI 
TO INTEGRATE EU RULES GOVERNING COPYRIGHT INTO THE ITALIAN 
LEGAL CODE . 
 
GOVERNMENT SOFTWARE 
------------------------------ 
 
12.  WE HAVE RECEIVED NO COMPLAINTS/INFORMATION REGARDING 
GOVERNMENT USE OF PIRATED SOFTWARE. 
 
COMMENT 
------------- 
 
13.  THE INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE (IIPA) 
RECOMMENDS THAT ITALY REMAIN ON THE WATCH LIST.  IPR INDUSTRY 
REPRESENTATIVES HERE SHARE THAT ASSESSMENT.  WE AGREE. 
PIRACY HAS FALLEN BY OVER 30 PERCENT IN THE LAST TWO YEARS -- 
SINCE ITALY PASSED ITS TOUGH COPYRIGHT LAW IN 2000 -- BUT 
MUCH REMAINS TO BE DONE. 
 
SEMBLER 
 
                       UNCLASSIFIED 
 
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 2002ROME01072 - Classification: UNCLASSIFIED