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Cablegate: U/S Lavin Raises Copyright Legislation Concerns with Gof


DE RUEHFR #7212/01 3071636
R 031636Z NOV 06




E.O. 12958: N/A

REF: A) PARIS 6811 B) PARIS 5242

1.(SBU) Summary: Commerce Under Secretary Franklin Lavin raised
concerns over France's recently passed copyright legislation
(reftels) with Ministry of Culture advisors Laurence Franceschini
and Marc Herubel on October 19, and separately with Trade Minister
Lagarde's Chief of Staff Stanislas Pottier and Invest in France
President Philippe Favre. Lavin said the French copyright
legislation could potentially represent "a backwards step" for
innovation, jobs and culture. The Under Secretary made the point to
the Culture Ministry that Apple is the largest carrier of
Francophone music.

2. (SBU) Franceschini and Herubel said the GOF would take a
pragmatic approach to drafting implementing regulations to the
legislation, including the decree establishing a "technical
measures" regulatory authority. The advisors said the regulatory
authority would make decisions on the dissemination of DRM on a
case-by-case basis and that the potential impact on the integrity of
a firm's IP would be factored into the decision-making. However,
the Culture Ministry could not guarantee that software providers
would absolutely not have to give up protected intellectual property
information for the sake of interoperability. In response to
questioning, Herubel said the GOF would welcome U.S. analysis for
WTO/TRIPS-consistency of the legislation to help inform implementing
regulations. End summary.

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3. (SBU) ITA Under Secretary Franklin Lavin met with Ministry of
Culture Deputy Cabinet Director Laurence Franceschini and Technical
Advisor Marc Herubel on October 19 to raise U.S. concerns related to
France's copyright law. Herubel told Lavin the legislation had been
passed under fast-track procedures, and that political pressure on
the National Assembly had resulted in the legislation "going a
little far" in satisfying a vocal slice of the user population. The
July decision of the Constitutional Court (ref B) -- and now the
process of drafting implementing regulations -- was helping to
reestablish "equilibrium" and ensure protection of IP integrity.

3. (SBU) Franceschini and Herubel said implementing regulations
would include a decree creating a new regulatory authority
responsible for matters related to the mandatory dissemination of
DRM systems, among other issues. The decree should be ready by the
end of the year, with the goal of standing up the authority in

4. (SBU) Franceschini said the regulatory authority would make
decisions on dissemination of DRM systems on a case-by-case basis.
She claimed the approach would be "pragmatic" and the potential
impact on the integrity of a firm's IP would be factored into
decision-making. Franceschini also claimed firms could enjoy a
level of DRM protection by setting compensation prices high, though
she was unclear on how/whether the ability to do might be impaired
by decisions of the regulatory authority. When Franceschini was
challenged as to how the Ministry would guard against confiscation
of technology, she was unable to provide a clear explanation, saying
only that the courts would adjudicate fairly.

5. (SBU) Asked why the market wouldn't be more efficient in clearing
such transactions, Franceschini listed several concerns. In a
non-interoperable environment, resulting segmentation increased
risks of piracy, as experience had shown. The vertically integrated
strategies around DRM, favored by companies such as Apple, clearly
had been critical in helping to launch a new market. As the market
matured, it was important to encourage an "interoperable
environment" in which several standards might co-exist.
Franceschini drew on the television analogy: the consumer would not
put up with ten decoder boxes in order to watch ten different
channels. The advisors added that when France's Competition Council
denied a suit brought by Virgin Mega to open up Fairplay, the market
was not yet mature. Now that it has matured, provisions must be
made for interoperability, otherwise the consumer is held prisoner.

6. (SBU) In response to probing, Herubel said he thought the
copyright legislation was WTO/TRIPS-consistent. But he noted that
if the United States had a different analysis, he would be
interested in factoring that into consideration as the Ministry
proceeds with drafting implementing regulations.

7. (SBU) U/S Lavin closed the meeting by underscoring the importance
of what was at stake. The French copyright legislation could
potentially represent "a backwards step" for innovation, jobs and
culture. It would be critical to strike a balance between
interoperability and proprietary rights that did not come down on
the wrong side of the equation. He said this legislation gives the
impression to future innovators and investors the government may
arbitrarily, in the name of culture and consumer rights, take away
intellectual property rights if a later competitor promises to
provide the same service at a lower price. The Under Secretary also
made the point that Apple is the largest carrier of Francophone
music. Apple has increased the public's access to current and past
French music. That, he said, is the irony here.

8. (SBU) In a separate meeting, Stanislas Pottier, Chief of Staff to
the French Trade Minister, told Lavin there would be
inter-ministerial consultations on the implementing regulations. He
appeared confident his Ministry could ensure strong IP protection in
the implementing regulations. Pottier said the Prime Minister's
office was concerned about not weakening IP protection. Philippe
Favre, head of the French Government's investment promotion agency
Invest in France, intimated to Lavin that the IP damaging elements
of the legislation would be resolved in the implementing
regulations. U/S Lavin also discussed the DRM issue with MEDEF,
the French Employer's association. MEDEF did not appear fluent on
the issue, but was ready to explore it further.

10. (SBU) Comment: The Culture Ministry said it would seriously
review input into the implementing regulation drafting process. If
we have specific concerns over WTO/TRIPS consistency, for example,
sharing those with the French before the decree is finalized may
help mitigate negative consequences of the legislation.

11. (U) Technical note: it appears that both film and music will be
within the scope of the legislation and software publishers will be
responsible for paying compensation to the DRM provider.

12. (U) U/S Lavin has cleared this cable.


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