Viewing cable 08MADRID1351, SPAIN: IPR PIRACY GETTING MORE ATTENTION

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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #1351/01 3571629
ZNR UUUUU ZZH
R 221629Z DEC 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5815
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3726
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UNCLAS SECTION 01 OF 03 MADRID 001351

SENSITIVE
SIPDIS

STATE FOR EUR/WE, EEB/TPP/IPE, EEB/CIP
STATE PASS USTR DWEINER
USDOC FOR 4212/DCALVERT
USDOC ALSO FOR PTO

E.O. 12958: N/A
TAGS: ETRD KCRM KIPR SP
SUBJECT: SPAIN: IPR PIRACY GETTING MORE ATTENTION

REF: A. MADRID 1346
¶B. MADRID 1318
¶C. MADRID 1194
¶D. MADRID 1150

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SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

SUMMARY

¶1. (SBU) In addition to IPR-related developments reported in
ref A, the Ministry of Culture recently unveiled a new IPR
enforcement manual, prepared in concert with law enforcement
agencies and rights-holders' organizations. Meanwhile, the
country's largest copyright management society has come under
fire for its aggressive and allegedly deceptive practices in
enforcing its members' rights. Recent GOS actions and
declarations concerning internet piracy have attracted
widespread media and public attention and prompted a small
demonstration by anti-regulation internet users December 20.
The amount of recent activity on the internet piracy front
appears to reflect growing expectations that some sort of
regulatory change is in the offing. End Summary.

IPR ENFORCEMENT MANUAL UNVEILED

¶2. (U) On December 11, Ministry of Culture Director General
for Policy and Cultural Industries Guillermo Corral Van Damme
unveiled a Manual of Best Practices for the Pursuit of Crimes
Against Intellectual Property. Coordinated by the Culture
Ministry, the Manual includes input from the Interior and
Justice Ministries, the Prosecutor General's Office
(Fiscalia), the National Police, Guardia Civil, Judicial
Council, Tax Authority, the Federation of Provinces and
Municipalities, and copyright management entities. The
Manual provides background on the phenomena of IPR and piracy
in Spain and provides statistics and charts on enforcement
actions. It also provides a series of guidelines on how to
investigate complaints, obtain and preserve evidence, and
bring offenders to justice. While it refers to "crimes
against intellectual property," the Manual is devoted
specifically to copyrighted cultural content, without
reference to patent or trademark protection. It addresses
"top manta" - the sale of pirated or counterfeit merchandise
on sidewalks and in informal street markets, concealed under
blankets - as well as digital piracy.

¶3. (U) In addition to DG Corral, Jose Antonio Robles
Garrido, Chief Inspector of the IPR Crimes unit of the
National Police; Joaquin Delgado Martin of the Central
Secretariat of the National Judicial Conference; and Jose
Luis Perez Quintero of the investigations and anti-fraud
department of the Music Producers of Spain (PROMUSICAE) spoke
at the launch of the Manual. In his remarks, Corral said the
Manual presents the most common piracy problems, with
suggested and recommended solutions to those problems and
especially ways to coordinate among all affected and
interested parties, from owners, rights-holders, and
intermediaries to technical experts, police, prosecutors, and
judges.

¶4. (U) Perez of PROMUSICAE expressed appreciation on behalf
of rights-holders for the government's work in preparing the
Manual and its efforts to improve protection. He noted with
satisfaction that the Manual stipulates that peer-to-peer
(P2P) file-sharing and downloading without permission of the
rights-holder of the material always constitutes some sort of
infringing activity. The Manual specifically lists, as a
legitimate investigative practice, a police agent's
registering on-line with a false identity in order to gather
evidence of unauthorized P2P file-sharing.

¶5. (SBU) Comment: The Fiscalia's Circular 1 of May 5, 2006
on Crimes Against Intellectual and Industrial Property in
Light of the Reform of Organic Law 15/2003 states that
alleged IPR infringers are subject to criminal prosecution
only when they act "with a profit motive and to the detriment
of a third party," a provision which many internet users and
law enforcement officials have read as essentially
decriminalizing P2P downloads. Rights-holders complain that
one consequence of the Circular's language is a reluctance on
the part of police and prosecutors to act against
unauthorized P2P activity. Furthermore, numerous judges have
rejected criminal complaints involving P2P file-sharing on
the grounds of no established profit motive. The GOS has
thus far shown little interest in amending or clarifying the

MADRID 00001351 002.2 OF 003


Circular, arguing that it is legally correct and leaves open
to rights-holders the option of civil litigation when
criminal prosecution fails. While the Manual does not
correct or even contradict the Circular, rights-holders hope
its unambiguous characterization of unauthorized P2P
downloads as always infringing may spur authorities to pursue
such behavior more vigorously, and judges to punish offenders
more often. End Comment.

COPYRIGHT MANAGEMENT SOCIETY CRITICIZED

¶6. (SBU) According to Clara Mapelli, Ministry of Culture
Deputy Director General for Intellectual Property, the
Ministry plans to undertake a campaign to improve the public
image of copyright management societies. These societies,
which collect royalties on behalf of artists, entertainers,
and other creators and producers, are widely perceived as
rent-seeking social parasites. Many ordinary Spaniards
resent them for the "private copy levy" ("canon digital") on
blank recording media and recording and playing devices,
which emerged briefly as an issue in national elections
earlier this year.

¶7. (U) The largest copyright management society, the General
Society of Authors and Publishers (SGAE), has some 91,000
members and reported revenues in 2007 of approximately 380
million euros. SGAE has come under critical media attention
recently for an incident in late 2007 in which the society
allegedly paid an undercover detective to crash and
surreptitiously video-record a private wedding party in
Sevilla to gather evidence that the organizers were having
copyrighted music performed without having paid the required
fees. This led in turn to an expensive judgment against SGAE
for violation of the newlyweds' privacy rights, and to a
series of articles in major media, led by daily of record "El
Pais," aiming to expose SGAE's aggressive enforcement
practices.

¶8. (U) At the unveiling of the Best Practices Manual, DG
Corral was asked whether SGAE's methods of enforcing its
members' rights constituted the sort of good practice the
Manual strove to encourage. He replied that enforcement of
the law is the sole competence of duly constituted
authorities, and that while private entities like SGAE may
provide the authorities with information and ask for their
help in protecting their rights, they may not take the law
into their own hands. Culture Minister Molina, likewise
queried about SGAE at his press breakfast (ref A), noted that
it is a legitimately established and well-respected entity
with a long history, and which is entitled to defend its
members' interests, so long as it conforms to the law in so
doing; otherwise, he averred, it may expose itself to legal
problems.

SPOTLIGHT ON DIGITAL PIRACY AND POSSIBLE REMEDIES

¶9. (U) A series of recent GOS actions and statements (see
refs A-B) - e.g., the launch of the Ministry of Culture's
public awareness campaign; Culture Minister Cesar Antonio
Molina's announcement that new anti-piracy regulations may be
coming soon; and Minister of Industry, Tourism, and Trade
Miguel Sebastian's remarks at the late November digital
content conference (FICOD) on the importance of IPR
protection - have generated increased media attention to the
internet piracy issue and possible remedies. Following its
critical expose of SGAE's activities, El Pais published an
IPR-related news article or op-ed piece every day during the
week of December 15. Contributors included Jose Manuel
Tourne of the Federation for the Protection of Intellectual
Property (FAP), laying out the rights-holders' perspective;
Miguel Perez Subias, president of the Internet Users'
Association, arguing for total legalization of P2P activity;
Jesus Nunez Banegas of the Information and Communications
Technology Business Association (AETIC), warning of the
complications and perils implicit in graduated response
regimes; Javier Ribas of business law firm Landwell-PWC,
outlining legal underpinnings of a graduated response system;
and Secretary of State for Telecommunications and the
Information Society Francisco Ros Peran, reiterating the
government's position that Internet Service Providers (ISPs)
and rights-holders need to reach a mutually acceptable
agreement that recognizes the competing rights and
responsibilities of the different stake-holders. On December
21, El Pais published an inverview in which Didier Lombard,
worldwide president of France Telecom - which operates in

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Spain under the name "Orange," one of the four members of the
ISP association Redtel - expressed support for the
implementation in Spain of a graduated response regime
similar to one currently contemplated in legislation under
consideration by France's parliament.

¶10. (U) On November 20, a group estimated at about 30
"cyber-activists" held a brief demonstration outside the
Madrid headquarters of the Spanish Socialist Workers' Party
(PSOE - ruling party) in favor of free, legal P2P downloads.
The demonstrators set up two computers on which they
downloaded copyrighted material. Activists unfurled banners
and waved signs with such messages as "Digital culture should
be free" and (playing on the Ministry of Culture campaign
slogan, "If you're legal, you're all right") "Be legal:
Create, copy, share, modify." The demonstrators' choice of
the party headquarters was reportedly a reaction to the
possibility of a more vigorous government response to
internet piracy.

COMMENT

¶11. (SBU) Fellow members of the Anti-Piracy Coalition
recognize that the copyrights management societies' bad
public image sometimes hurts rights-holders' efforts to
secure better IPR enforcement. According to Jose Manuel
Tourne, the election-related flap earlier this year over the
digital canon - in which SGAE and similar organizations were
portrayed as heavies - made the societies nervous about
possibly losing significant revenues and thus reluctant to
press the government too hard to amend the Fiscalia's
Circular. The most recent spate of bad publicity involving
SGAE could potentially damage the rights-holders' cause in
the court of public opinion and strengthen the hand of the
telecoms and the internet users' associations. At the same
time, the lively debate in the pages of Spain's largest
circulation daily newspaper and the demonstration may be seen
as signs of expectations that some sort of regulatory change
is in the offing. End Comment.
AGUIRRE