Viewing cable 07OTTAWA448, CANADA: 2007 SPECIAL 301 RECOMMENDATION

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UNCLAS SECTION 01 OF 02 OTTAWA 000448 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS TO USTR FOR SULLIVAN, MELLE, ESPINELL, AND GARDE 
STATE FOR EB/TPP/IPE BOGER AND WALLACE AND WHA/CAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR CA
SUBJECT: CANADA: 2007 SPECIAL 301 RECOMMENDATION 
 
REF: A. STATE 7944 
 
 ¶B. 06 OTTAWA 3179 
 ¶C. 06 OTTAWA 3171 
 ¶D. 06 OTTAWA 2021 
 ¶E. 06 OTTAWA 406 
 ¶F. MONTREAL 58 
 ¶G. 06 MONTREAL 1220 
 ¶H. 06 MONTREAL 436 
 ¶I. 06 MONTREAL 365 
 ¶J. 06 TORONTO 2326 
 ¶K. 06 TORONTO 2919 
 ¶L. 06 TORONTO 2908 
 ¶M. TORONTO 45 
 ¶N. TORONTO 60 
 
¶1. (SBU) Summary and Recommendation: Despite optimism after 
the Conservative Party took power in early 2006, Canada's 
track record on strengthening IPR protection has remained 
disappointing. With one notable exception regarding 
pharmaceutical data protection, the GOC has made no 
discernable progress towards addressing USG concerns stated 
in last year's Special 301 report. These include updating 
Canada's out-of-date copyright laws, ratifying and 
implementing the WIPO Internet Treaties that it signed in 
1997, and improving lackluster IPR enforcement. In addition, 
despite growing awareness that Canada has become a major 
international source for pirated DVD movies from U.S. 
studios, the GOC appears disinclined towards criminalizing 
the act of camcording in theaters. In essence, there have 
been numerous meetings, numerous Canadian promises, and 
seemingly no substantive action on the part of the GOC. 
Therefore, the Embassy recommends that unless there is 
substantial progress by the GOC in the next few weeks, Canada 
should be elevated to the Special 301 Priority Watch list. 
End Summary and Recommendation. 
 
--------------------------------------- 
Copyright Legislation ) Still Not Ready 
--------------------------------------- 
 
¶2. (SBU) The GOC continues to discuss proposed copyright 
legislation in preparation for introduction in Parliament. 
Although Embassy contacts report that the legislation should 
be presented "this spring," the expected introduction date 
has been delayed numerous times from the original target date 
of the fall of 2006. There appears to be a lack of consensus 
between Canadian Heritage and Industry Canada officials on 
the substance of the legislation. Canadian Heritage and 
Industry Canada officials responsible for drafting the 
copyright bill decline to discuss details of the legislation 
because of Cabinet secrecy rules - but tell us that USG views 
are well known, including our concerns with C-60, the Liberal 
government's copyright bill that failed to pass Parliament 
because of the early 2006 Federal election. 
 
¶3. (SBU) Building on USTR Schwab's October 11th letter to 
Industry Minister Bernier on IPR protection, the Ambassador 
raised our concerns regarding the delay in introducing 
copyright legislation in meetings with Bernier and Heritage 
Minister Oda. The Ambassador also wrote to Prime Minister 
Harper, stating that improving IPR protection in Canada is 
the USG's top priority in our bilateral economic agenda and 
urged the quick introduction of a copyright bill in 
Parliament. The Ambassador subsequently met and discussed 
the importance of a strong copyright bill with both the Prime 
Minister's policy advisor and his political advisor. 
Attempts by the Ambassador to personally discuss this matter 
with the Prime Minister's Chief of Staff were unsuccessful. 
EMIN also discussed the importance of effective IPR 
protection with the Prime Minister's office, and Embassy 
officers have repeatedly raised IPR concerns with their GOC 
contacts. Additionally, Tom Donahue, President of the U.S. 
Chamber of Commerce, expressed U.S. industry's concern about 
QChamber of Commerce, expressed U.S. industry's concern about 
Canada's lax IPR protection to Prime Minister Harper in 
January. Mission Canada personnel are starting to speak out 
publicly on the IPR issue. The Ambassador routinely 
highlights U.S. concerns regarding Canada,s copyright laws 
in his speeches and plans to issue an op-ed on this subject 
in the coming weeks. 
 
¶4. (SBU) Despite our efforts, we have no firm indication of 
either the content or expected introduction date of the 
copyright bill. 
 
--------------------------------------------- ---- 
Border Enforcement Improvements ) Still No Action 
--------------------------------------------- ---- 
 
 
OTTAWA 00000448 002 OF 002 
 
 
¶5. (SBU) A Canadian interagency group set up more than two 
years ago continues to examine "best practices" and 
regulations for improving IPR enforcement on Canada,s 
borders. GOC officials are vague when formal recommendations 
will be made to Cabinet, but have said that the work of the 
group is "far advanced." GOC officials acknowledge that 
Canada is the only G-7 country yet to update its border 
enforcement regime, and appear to recognize that border 
officials should receive "ex officio" powers to seize 
suspected counterfeit and pirated goods. Officials also 
acknowledge that current arrangements between customs 
officials and the Royal Canadian Mounted Police (RCMP) for 
seizing illegal goods are cumbersome. Fortunately, law 
enforcement officials in some parts of Canada are 
occasionally willing to investigate and shut down illegal DVD 
operations, such as occurred in August 2006 in Toronto where 
local police arrested four individuals, seized over 140 DVD 
burners, and confiscated more than 20,000 counterfeit movie 
DVDs (ref J). In December, Toronto police raided counterfeit 
DVD and CD outlets, seized thousands of copies, and arrested 
three (ref K). But such raids have been rare. Counterfeit 
DVD manufacturing and piracy distribution centers continue to 
thrive in parts of Canada, including Toronto (ref N), because 
local courts are back-logged on IPR cases, and there is 
limited law enforcement and judicial resources dedicated to 
the problem (ref L). 
 
--------------------------------------------- ------- 
Camcording ) GOC Unwilling to Recognize as a Problem 
--------------------------------------------- ------- 
 
¶6. (SBU) Camcording a movie in a Canadian theater may be 
technically illegal, but enforcement has been effectively 
non-existent. In the rare instance where a case moves 
through the Canadian justice system and the perpetrator is 
found guilty, he usually receives a light fine and no jail 
time. This is a key reason why Canada has become a 
significant source of international pirated DVDs, mostly of 
first-run movies from U.S. film studios. Despite extensive 
and growing media coverage of the camcording issue, Twentieth 
Century Fox's public threats to delay the release of its 
movies in Canada, and industry estimates that 20 to 25 
percent of pirated movies sold worldwide are sourced in 
Canada (see refs F, G, and I), Justice Minister Nicholson 
states that existing laws are sufficient to prevent 
camcording in Canadian theaters. RCMP officials also admit 
that cracking down on theater camcording is a very low 
priority due to limited resources. 
 
¶7. (SBU) Camcording a movie for commercial use is a federal 
criminal offense, but proving commercial intent is a giant 
legal hurdle that makes convictions difficult. The current 
law also denies theaters immediate legal recourse against 
patrons caught camcording movies. Police will not arrest 
anyone caught camcording and the theater operator cannot 
confiscate or erase the recording of the movie. 
 
----------------------------------- 
Data Protection ) The only good news 
----------------------------------- 
 
¶8. (SBU) As reported in ref D, the GOC published new data 
protection measures for pharmaceuticals in October, 2006. 
These new regulations provide eight years of data exclusivity 
for new drugs. The U.S. pharmaceutical industry is generally 
pleased with the new data protection regulations and 
considers them a significant step forward. 
Qconsiders them a significant step forward. 
 
----------------------------------- 
Recommendation: Priority Watch List 
----------------------------------- 
 
¶9. (SBU) Although the new data protection regulations are a 
notable step, the GOC has failed to improve IPR protection in 
other areas of concern. Given the lack of action on 
copyright legislation, continued poor enforcement, and the 
growing camcording problem, the Embassy recommends that 
unless there is substantial progress by the GOC in the next 
few weeks, Canada should be elevated to the Special 301 
Priority Watch list. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS