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Cablegate: Czech Response to Riaa Special 301 Complaint

VZCZCXYZ0025
RR RUEHWEB

DE RUEHPG #0323 0851527
ZNR UUUUU ZZH
R 261527Z MAR 07
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC 8803
INFO RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS PRAGUE 000323

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/NCE EFICHTE AND EB/IPE JBOGER
STATE PASS USTR FOR JCHOE-GROVES AND WMOORE
COMMERCE FOR 4232/ITA/MAC/MROGERS
COMMERCE PASS USPTO
STATE PASS LIBRARY OF CONGRESS

E.O. 12958: N/A
TAGS: KIPR ETRD ECON EZ
SUBJECT: CZECH RESPONSE TO RIAA SPECIAL 301 COMPLAINT

REF: A. PRAGUE 244

B. PRAGUE 293
C. PRAGUE 160
D. PRAGUE 274
E. STATE 7944

1.(SBU) In response to the Recording Industry Association of
America (RIAA) Special 301 complaint against the CR, the GOCR
provided USTR March 23 a written report on efforts to combat
optical media IPR violations in the CR. The report highlights
recent IPR legislation and enforcement activities the Czechs
have implemented to protect IPR (ref A).

---
Legislation & Enforcement
---

2.(SBU) The GOCR report notes that it has EU-compliant
legislation to enforce IPR protections, such as the Criminal
Code, Copyright Act, and Act on Consumer Protection (ref A).
These legislative enhancements have given new authority to
both the Customs Directorate and the Czech Trade Inspection
Office to monitor IPR and seize pirated goods (ref A).

3.(SBU) The report did bring to light new data concerning the
year-to-year activities of the Trade Licensing Office, which
issues and regulates business licensing for vendors. The
office has the power to impose fines on as well as to suspend
and revoke the licenses of vendors who sell pirated goods. In
2006, the Consumer Protection Act strengthened this office's
ability to regulate licensing violations with increased
maximum fines (up to CZK 50 million), which resulted in a
rise in the number and value of fines:

2005
# of fines: 1900
Total value of fines: CZK 2,170,000
# revoked licenses: 11

2006
# of fines: 2870
Total value of fines: CZK 4,160,000
# revoked licenses: 84

---
No Action Plan & No Border Markets
---

4.(SBU) The GOCR report did not lay out any new initiatives
for reducing piracy, but was a plea for staying off the
Special 301 Watch List. The Ministry of Trade and Industry
wrote the report and focused on the efforts and developments
it has taken to manage IPR. It was not a GOCR-wide integrated
response to IPR protection. The report ignored RIAA claims of
"mushrooming" open air border markets as the source of much
of the digital piracy in the CR. It instead made short
remarks about a world-wide fall in music sales as the cause
of industry's problems. This report certainly does not
constitute an Action Plan, which we have made clear to senior
Czech officials we expect to see soon; this point was raised
most recently in a letter late last week to Deputy Trade
Minister Tlapa, which would not have been received in time to
influence this report.
GRABER

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