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Cablegate: Canada: 2007 Special 301 Recommendation

VZCZCXRO1262
OO RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #0448/01 0681549
ZNR UUUUU ZZH
O 091549Z MAR 07
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5154
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

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Canada's out-of-date copyright laws, ratifying and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

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