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Cablegate: Sri Lanka: Police Raid Vendors of Pirated Software

VZCZCXRO1704
RR RUEHLMC
DE RUEHLM #0461/01 1331148
ZNR UUUUU ZZH
R 121148Z MAY 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 8107
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2013
RUEHKA/AMEMBASSY DHAKA 0877
RUEHIL/AMEMBASSY ISLAMABAD 7870
RUEHKT/AMEMBASSY KATHMANDU 6051
RUEHKP/AMCONSUL KARACHI 2345
RUEHCG/AMCONSUL CHENNAI 8476
RUEHGV/USMISSION GENEVA 2754
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 02 COLOMBO 000461

SENSITIVE

SIPDIS

STATE FOR SCA/INS AND EB/TPP/IPE
DEPARTMENT PLEASE PASS TO USTR
NEW DELHI FOR USPTO DOMINIC KEATING

E.O 12958: N/A
TAGS: ECON ETRD KIPR EAID CE
SUBJECT: SRI LANKA: POLICE RAID VENDORS OF PIRATED SOFTWARE

REF: 07 COLOMBO 128

1. (SBU) Summary: On May 6, Sri Lankan police raided software
dealers in a popular shopping mall in Colombo. The raid was Sri
Lanka's first intellectual property rights (IPR) enforcement action
against pirated software dealers. With uncommon swiftness,
offenders were raided, charged, pleaded guilty, and convicted within
24 hours. Police vowed to continue the fight against piracy, but
lack the budget to truly go on the offensive. End summary.

2. (SBU) On May 6, the Colombo Crimes Division of the Sri Lanka
Police raided three shops in Majestic City, the premier shopping
mall in Colombo. The Police acted on a complaint by the Business
Software Alliance (BSA) on behalf of Microsoft Corporation. The
police seized about 400 illegal Microsoft CDs during the raid. On
May 7, less than 24 hours after the raid, the shop owners were
produced in court, where they pleaded guilty. They were fined
Rupees 450,000 (approximately $4,100) each. In addition, they were
sentenced to six months imprisonment, suspended for five years.
(Note: Maximum penalties for IPR violations in Sri Lanka include a
fine of up to Rupees 500,000 ($4,600) and/or a prison sentence of 6
months, but smaller penalties have been the norm.) The shop owners
also agreed to refrain from dealing in counterfeit Microsoft
products. The seized goods have been destroyed.

3. (SBU) Microsoft's office in Colombo is working with local
partners to develop the brand's business here. The firm therefore
does not want to be seen as driving the crackdown. As a result, it
is working closely with the Business Software Alliance, which is
driving the enforcement effort. According to Sudath Perera, Senior
Partner of Sudath Perera Associates and legal counsel/representative
for the Business Software Alliance, this was the first raid on
pirated software dealers in Sri Lanka. A global software piracy
study conducted for the alliance in 2007 revealed a very high
software piracy rate -- close to 90% -- in Sri Lanka.

4. (U) According to industry sources, the intent of the raid was to
create awareness of software intellectual property rights among
dealers and businesses. Police also said the raid was to send a
strong signal to IPR violators of all kinds. Anura Senanayake,
Director of the Colombo Crimes Division of the Police, told
newspapers that he strongly supported the raid and warned the
private sector to stop using pirated software. Newspapers quoted
him saying, "I strongly encourage all computer dealers and software
resellers everywhere to ensure that they only sell legal and
original software to avoid facing the full consequences of the law.
We will be conducting continued enforcement against software pirates
until piracy is wiped out." He also reminded businesses to respect
the law of the country by purchasing and using original software.
When contacted by EconFSN, Senanayake affirmed his statements and
said he is willing to do more raids. He encouraged rights holders
to contact the police with their complaints.

5. (SBU) According to Sudath Perera Associates, the local
magistrate and police were cooperative in issuing a search warrant,
organizing the raid, and prosecuting the accused. According to
them, recent IPR awareness-raising programs organized by rights
holder groups for judicial and police officers have helped to
improve enforcement. In March 2008, BSA organized an awareness
program for police officers. The American Chamber of Commerce of
Sri Lanka carried out a similar training program for magistrates in
2007. Sri Lanka's National IPR office has worked with international
experts, including the U.S. Patent and Trade Office and the World
Intellectual Property Rights Organization (WIPO), to conduct
seminars that have also raised awareness among government
officials.

6. (SBU) The BSA/Microsoft action followed successful raids by
Toshiba Corporation and Polo Ralph Lauren early this year. Toshiba
instigated raids on several shops selling counterfeit ink
cartridges. Polo has filed several court cases against
manufacturers and retailers of counterfeit apparel. In some cases
the accused have pleaded guilty. Other cases have proceeded to
trial.

7. (SBU) Comment: Sri Lanka's overall IPR laws and regulations are
strong, yet it remains far too easy to buy pirated goods throughout
the country. The arrests this month demonstrate that the government

COLOMBO 00000461 002 OF 002


is willing to make arrests and see them through to conviction when
prodded by industry and stakeholders; unfortunately, it remains too
dependent on such complaints and handholding. To get to the point
where its enforcement is routine, rather than exceptional, the
government needs to give the police and National IPR office the
budgets and the trained staff needed to truly combat IPR violations.
Embassy and USG agencies are providing much of the training, but
with the government perennially in deficit, IPR enforcement budgets
are unlikely to grow soon.
BLAKE

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