Viewing cable 08OTTAWA311, CANADA: EMBASSY OTTAWA 2008 SPECIAL 301

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UNCLAS SECTION 01 OF 04 OTTAWA 000311 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USTR FOR SULLIVAN, MELLE, GARDA 
STATE FOR EEB/IPC (WALLACE) AND WHA/CA (RIOS) 
 
E.O. 12958: N/A 
TAGS: CA ECON ETRD KIPR
SUBJECT: CANADA: EMBASSY OTTAWA 2008 SPECIAL 301 
RECOMMENDATION 
 
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Sensitive but unclassified. This message is part of an 
internal U.S. Government deliberative process regarding the 
annual Special 301 Report and must not be shared outside the 
USG. 
 
¶1. (sbu) Summary and Recommendation: Embassy Ottawa remains 
frustrated by the Government of Canada,s continuing failure 
to introduce - let alone pass - major copyright reform 
legislation that would, inter alia, implement and ratify the 
World Intellectual Property Organization (WIPO) Internet 
treaties. Several recent factors compound this frustration, 
including the fact that: 
 
-- the Prime Minister told the President last August that 
Canada would pass copyright legislation; 
 
-- the November Speech from the Throne laying out the 
government,s Parliamentary agenda stated that it would 
"improve the protection of cultural and intellectual property 
rights in Canada, including copyright reform;" and 
 
-- senior GOC officials, especially Industry Minister 
Prentice, repeatedly assured the Ambassador and senior 
Mission Canada officers that the copyright bill would be 
introduced "soon." Specifically, assurances were given that 
the legislation had been finalized and would be introduced 
prior to the Christmas recess, and then again immediately 
upon Parliament's return in January. Neither of which 
occurred. 
 
In addition to the lack of Parliamentary action on a revised 
copyright bill, the GOC continues to weigh recommendations 
from an interagency task force that reviewed "best practices" 
and regulations over a three-year period for improving 
Canada,s IPR enforcement regime at the border, but has taken 
no action so far. 
 
¶2. (sbu) Despite our frustration, we must acknowledge 
Canada,s close cooperation with the United States on 
intellectual property matters in international fora, as well 
as the excellent working relationship between U.S. and 
Canadian border entities. In June 2007, the Canadian Royal 
Mounted Police (RCMP) hosted the International Law 
Enforcement IP Crime Conference in Niagara Falls, and will 
co-host this year,s conference in Halifax with Interpol in 
June. We also recognize that Canada has taken important 
steps to improve protection and enforcement of intellectual 
property rights over the last year. Last May, Parliament 
enacted a law criminalizing illicit camcording in Canadian 
movie theaters - a specific step that the U.S. sought in the 
2007 Special 301 report on Canada. Throughout the last year, 
Canadian law enforcement entities have carried out a number 
of high-profile raids on pirating and counterfeiting 
operations. We also believe - even in the face of repeated 
delays - that the current government remains committed to 
improving IPR protection in Canada. 
 
¶3. (sbu) However, given the continuing failure of the GOC to 
introduce a copyright bill into Parliament - coupled with the 
apparent lack of significant steps to improve IPR protection 
and enforcement along the border - Post reluctantly 
Qand enforcement along the border - Post reluctantly 
recommends that Canada be elevated to Special 301 Priority 
 
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Watch List in 2008. We would strongly recommend retaining 
Canada on the Watch List if the Conservative government 
introduces its copyright bill into Parliament in the coming 
weeks before the release of the 2008 Special 301 report. 
(Comment: We understand that elevation of Canada to the 
Priority Watch List could adversely affect prospects for the 
introduction and passage of a copyright bill in Parliament. 
End comment) End Summary and Recommendation. 
 
Copyright Legislation 
 
¶4. (sbu) In December 2007, the GOC completed - and printed 
into final bill form - major copyright reform legislation. 
While details remain secret, Post understands that the 
legislation would implement and ratify the WIPO Internet 
Treaties (which Canada signed in 1997), and address Internet 
Service Provider liability, circumvention devices, 
educational use of copyrighted materials, and other 
contentious issues. 
 
¶5. (sbu) From December 2007 to mid-February, senior GOC 
officials and well-informed private sector contacts assured 
the Embassy that legislative calendar concerns were delaying 
the copyright bill,s introduction into Parliament. Our 
contacts downplayed the small - but increasingly vocal - 
public opposition to copyright reform led by University of 
Ottawa law professor Dr. Michael Geist. On February 25, 
however, Industry Minister Prentice (please protect) admitted 
to the Ambassador that some Cabinet members and Conservative 
Members of Parliament - including MPs who won their ridings 
by slim margins - opposed tabling the copyright bill now 
because it might be used against them in the next federal 
election. Prentice said the copyright bill had become a 
"political" issue. He also indicated that elevating Canada 
to the Special 301 Priority Watch List would make the issue 
more difficult and would not be received well. 
 
¶6. (sbu) On February 26, Liberal party leader Stephan Dion 
made clear that his opposition party would not bring down the 
minority Conservative government over the just-unveiled 2008 
budget. Most political observers now believe that Dion,s 
position pushes possible national elections until at least 
the fall of 2008, and possibly even until October 2009 (the 
next mandatory date). A senior GOC official told the 
Ambassador on February 27 that the disappearing prospect of 
an imminent election should make it easier to introduce the 
copyright bill in Parliament, but offered no definitive 
timetable for doing so. An influential Liberal MP on 
intellectual property issues separately told EMIN on February 
26 that the copyright bill would receive widespread support 
from the Conservative, Liberal, and Bloc Quebecois parties if 
and when the GOC sends it to Parliament. (Comment: James 
Rajotte - chair of the Industry Committee, which would likely 
receive a copyright bill - told the Ambassador on February 28 
that the legislation would not have such smooth sailing. End 
Comment) The Liberal MP stated that he has pressed Industry 
Minister Prentice to release the legislation now, adding that 
Canada is out of step with the rest of the (developed) world 
on intellectual property rights and risks losing future 
foreign investment. The MP dismissed the political 
significance of the public efforts of Professor Geist and 
hinted that Canada,s possible elevation to the Priority 
Watch list would not be seen as a hostile U.S. action, but 
show that its IPR regime is weak vis-a-vis its G-7 partners. 
The MP indicated that other nations, especially France, are 
also lobbying Parliament on a copyright bill. EMIN learned 
Qalso lobbying Parliament on a copyright bill. EMIN learned 
from his French Embassy counterpart that she would be 
briefing Parliamentarians on this issue on March 4. Industry 
Committee chair Rajotte separately confirmed this meeting 
with the Ambassador. 
 
¶7. (sbu) On February 27, EMIN and Econcouns were summoned to 
Foreign Affairs Canada to receive the informal views of the 
Canadian government on the Special 301 process. The meeting 
was chaired by Doug George, the Director of DFAIT,s 
Intellectual Property office and included representatives of 
ten Canadian government agencies, including Industry Canada, 
Canadian Heritage, Canada Border Services Agency (CBSA), and 
the Canadian Embassy in Washington. After the usual 
denouncement of the Special 301 process (which we hear every 
year), George outlined the cooperative measures that Canada 
undertakes with USG agencies and Interpol on IPR enforcement. 
 He stated that this cooperation, together with Canada,s 
federal and local law enforcement efforts, gets short shrift 
in USTR,s description of Canada in the Special 301 report. 
 
¶8. (sbu) However, George and Industry Canada,s Susan 
Bincoletto could not give EMIN any indication of when the 
 
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revised copyright bill would appear in Parliament. CBSA did 
not know whether the C$75 million announced in the recent 
budget over the next two years will be targeted toward 
improving IPR enforcement. There was also no indication as 
to when CBSA officials would get "ex officio" powers to 
improve their enforcement efforts even though many Canadian 
officials believe that this is needed. Finally, George 
cautioned that if Canada were retained on the 301 Watch List 
- or even elevated to the Priority Watch List - it could 
affect future Canadian cooperation on IPR as well as give 
ammunition to Dr. Geist and his acolytes, who see a revised 
copyright bill as a "U.S. plot." In answer to EMIN,s 
question, George claimed that only the United States is 
pressing Canada on copyright reform. The EU, individual 
European countries, and Japan do raise IPR issues, but George 
implied that these efforts are perfunctory. 
 
IPR Enforcement 
 
¶9. (sbu) After three years of examining "best practices" and 
regulations for improving IPR enforcement on Canada,s 
borders, an interagency group made formal recommendations to 
Canadian ministers in the fall of 2007. To date, the GOC has 
yet to act on the recommendations, and the 2008 budget 
(released on February 26) contained no apparent IPR-related 
enforcement measures. In the past, GOC officials have 
indicated that Canada should join the other G-7 countries in 
updating its border enforcement regime and that border 
officials should receive "ex officio" powers to seize 
suspected counterfeit and pirated goods. Current 
arrangements between customs officials and the Royal Canadian 
Mounted Police (RCMP) for seizing suspected illegal goods are 
cumbersome and relatively ineffective. 
 
¶10. (sbu) Notably, the RCMP has increased its attention on 
counterfeit and pirated goods,particularly relating to public 
safety, health, and organized crime. Last June, the RCMP 
hosted the International Law Enforcement IP Crime Conference 
in Niagara Falls that was well attended by officials from the 
United States and other countries. This year,s conference 
in Halifax will be co-hosted by the RCMP and Interpol, June 
24-26. In addition, Canadian law enforcement officials are 
boosting action against illegal pirating and counterfeiting 
operations. These illustrative 2007 examples are excerpted 
from a more exhaustive list compiled by ConGen Toronto: 
 
-- Toronto RCMP investigators seize pirated DVD copies of the 
East Indian World Premiere movie Guru. Unauthorized copies 
of the movie,s soundtrack and another popular East Indian 
film also seized (February 21); 
 
-- An Ontario husband and wife are arrested after police 
officers seize over 750 counterfeit DVD,s at two convenience 
stores with an estimated value of C$15,000 (March 5); 
 
-- Windsor RCMP officers charge three men with 22 counts of 
importing counterfeit goods. Examination of the goods reveal 
23 different brand-name products with a value of C$250,000 
(April 2); 
 
-- In connection with satellite signal theft, Durham police 
seize C$60,000 worth of satellite receivers, dishes, and 
computer equipment. Estimated annual lost revenue lost is 
C$240,000 (July 13); 
 
-- Toronto police seize more than 20,000 music CDs along with 
movies, video games, and equipment after a six-month 
investigation initiated by the Canadian Recording Industry 
Association. Police also seize cash, business documents, and 
four CD/DVD burning towers, each with 6-8 burners, capable of 
producing some 770 recorded discs per hour, or 30,720 discs 
Qproducing some 770 recorded discs per hour, or 30,720 discs 
in a 40-hour week (July 17); 
 
-- Ontario police raid twenty-two locations in Mississauga, 
Brampton, Burlington and Toronto, arresting 18 people and 
seizing over 40,000 pirated DVD movies worth an estimated 
C$800,000 as well as manufacturing equipment capable of 
producing C$21 million worth of pirated DVD movies per year 
(August 21); 
 
-- RCMP and the York police officers search eight stores at 
the Pacific Mall in Markham and two retail outlets and a 
storage unit in the Dynasty Mall in Toronto. Several arrests 
are made, and more than 15,000 DVD,s seized. Also seized 
are 65 DVD burners located at a private residence (August 
31); and 
 
-- Toronto police recover C$10 million worth of counterfeit 
 
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luxury merchandise in a series of raids on local retailers 
(December 3). 
 
Canada Moves Against Camcording 
 
¶11. (sbu) In June 2007, the government criminalized the act 
of recording ("camcording") a movie in a theater without 
consent of the theater manager. The legislation was broadly 
supported by all political parties, and moved through 
Parliament in less than a month. Several individuals have 
been arrested under the new law and are currently pending 
trial. Industry representatives have told Post that the 
problem of illicit camcording in Canada - which was cited in 
the 2007 Special 301 Report - has been significantly reduced 
by this new law. 
 
Pharmaceutical Concern 
 
¶12. (sbu) The U.S. pharmaceutical industry remains generally 
pleased with the October 2006 amendments to Canada,s data 
protection regulations, and considers them a significant step 
forward. Some U.S.-based pharmaceutical companies, however, 
have raised concerns that recent judicial and Health Canada 
decisions could be putting a number of existing drug patents 
at risk. The U.S.-based companies believe that a further 
regulatory change allowing them the Right of Appeal of an 
adverse administrative decision would help alleviate their 
concerns. Post understands that a proposed regulatory 
amendment addressing this issue may soon be published in the 
Canada Gazette for public comment. 
 
Recommendation: No Copyright Bill Equals Special 301 
Priority Watch List 
 
¶13. (sbu) We believe that the minority Conservative 
government is committed to improving the protection and 
enforcement of intellectual property rights. However, given 
the GOC,s failure so far to introduce a copyright reform 
bill in Parliament - and the lack of significant steps to 
strengthen IPR enforcement and protection on the border - the 
Embassy reluctantly recommends that Canada be elevated to 
Special 301 Priority Watch List. We would strongly recommend 
retaining Canada on the Watch List if the government 
introduces its copyright bill into the House of Commons 
before the end of April. (Comment: Elevation of Canada to 
the Priority Watch List could adversely affect prospects for 
the introduction and passage of a copyright bill in 
Parliament. End comment) 
 
¶14. (sbu) This cable and its recommendation have been 
reviewed and approved by the Ambassador. 
 
Visit Canada,s Economy and Environment Forum at 
http://www.intelink.gov/communities/state/can ada 
 
WILKINS