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Cablegate: Madrid Ipr Conference: Gos Moves Towards

VZCZCXRO5150
RR RUEHIK
DE RUEHMD #1152/01 3361200
ZNR UUUUU ZZH
R 021200Z DEC 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1520
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 4248
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 04 MADRID 001152

SENSITIVE
SIPDIS

STATE FOR EUR/WE AND EEB/TPP/IPE
STATE PASS USTR FOR D.WEINER AND J.GROVES
STATE PASS U.S. COPYRIGHT OFFICE FOR M.WOODS AND M.PALLANTE
COMMERCE FOR 4212/DON CALVERT
COMMERCE ALSO FOR USPTO

E.O. 12958: N/A
TAGS: KIPR ETRD ECPS SP
SUBJECT: MADRID IPR CONFERENCE: GOS MOVES TOWARDS
ANTI-INTERNET PIRACY MEASURES

REF: A. MADRID 1137
B. MADRID 1096
C. MADRID 1075
D. MADRID 1052
E. MADRID 982

MADRID 00001152 001.3 OF 004


SUMMARY

1. (U) As part of FICOD 2009 (see ref A), on November 18 the
Spanish government hosted a Conference on IPR in the Digital
Environment. The Conference featured several speeches and a
series of roundtables on different aspects of online IPR
protection. Michele Woods of the U.S Copyright Office was a
panelist in a roundtable on policies and legislative
measures. MPAA CEO Dan Glickman delivered remarks outlining
the rights-holders' point of view. The Conference was
informative, with high-quality presentations The roundtable
discussions helped shed light on efforts underway in various
countries to address the problem of Internet piracy; the
Conference was thus particularly timely as the GOS is
expected to unveil a series of measures to combat
piracy-promoting websites by the end of the year.

2. (SBU) MPAA CEO Glickman told the Charge that his meetings
with the two Ministers most responsible for combating
Internet piracy were encouraging. Minister of Industry,
Tourism, and Trade (MITYC) Miguel Sebastian told Glickman
unambiguously that the Inter-Ministerial Commission's
recommendations will include an administrative course of
action to block or take down pirate websites. MITYC had
heretofore been believed to oppose such an approach, and
Sebastian's embrace of it may be a sign that the GOS is
preparing to implement measures with teeth, though not as
much as rights-holders would like to see. End Summary.

3. (U) MITYC's Secretariat of State for Telecommunications
and the Information Society (SETSI) organized the conference
as part of the third annual FICOD. It opened with an address
by Paul Brown, Vice-President of Spotify, a free, legal
online music service that has recently become available in
Spain and that was also featured recently in Economist
articles about successes in reducing online music piracy.
Spotify is supported by advertising revenue or, for those who
wish to avoid the ads, paid subscriptions. The increased
prevalence of legitimate vehicles for making content
available, and the need for much more legal content online as
a means of reducing the temptation to pirate, were major
recurring themes of the conference.

LEGISLATIVE ISSUES

4. (U) The roundtable on policies and legislative measures
included government officials from the U.S., the UK, Germany,
Sweden, and France, and a WIPO representative. Michele
Woods, Senior Counsel for Policy and International Affairs at
the U.S. Copyright Office, discussed the Google Books case,
its Revised Settlement Agreement, and implications for orphan
works. Steve Rowan of the UK Intellectual Property Office
(IPO), reported on recent developments in that country,
including new draft legislation adopting a "three strikes"
approach, which involves cutting Internet service to those
who repeatedly download illegally. Representatives of the
German and Swiss Justice Ministries addressed various
enforcement issues, including implementation of the EU
Enforcement Directive and prosecution of the Pirate Bay
principals. A French Culture Ministry official updated the
audience on the HADOPI law, which after many setbacks is to
take effect at the beginning of the year with the
promulgation of implementing regulations. It is evident that
in the United States and many European countries, there is a
great deal of activity taking place on a variety of fronts.

APPROACHES TO COMBATING ONLINE PIRACY

5. (U) The roundtable on The Fight Against IPR-Infringing
Activities on the Internet was moderated by Guillermo Corral,
Director General for Policy and Cultural Industries at the
Ministry of Culture, who spoke about GOS efforts to encourage
negotiations between the Coalition of Creators and Content
Industries and the Internet Service Providers' (ISP)
association (Redtel). He also alluded to the
Inter-Ministerial Commission formed October 9 (ref D) to make

MADRID 00001152 002.3 OF 004


recommendations to the government. The first panelist, Aldo
Olcese, spoke of changes that have taken place in his first
year as president of the Coalition, which previously
consisted of copyright management entities and various film
and music producers and distributors and audiovisual groups.
The Spanish Association of Video Game Publishers and
Distributors (aDeSe) joined the Coalition in January, and
Spain's major book publishing industry association joined
later in the year. Awareness on the part of the government
and the general public has grown, Olcese said, and the
content providers don't feel as isolated as they did before.
He characterized continuing efforts to finalize an agreement
between the Coalition and Redtel as "difficult" and predicted
that such an agreement will only be realized "at the last
minute."

6. (U) Olcese outlined what he called the "Spanish model" for
combating piracy, a model which he characterized as "more
democratic" than the approach in other countries, as it seeks
to reduce online availability of pirated material while
leaving the end user alone. The Spanish model is focused on
the producers and distributors of pirated content, the
pirates' "supermarket." Per ref D, on October 19 the
Coalition delivered a list of 200 alleged commercial-scale
pirate websites to the MITYC to be passed to the Prosecutor
General's Office (Fiscalia) for investigation and
prosecution, and also urged MITYC to take independent action
against the sites. (Comment: It remains unclear what
authority MITYC may have beyond the ability to levy modest
fines, nor are we aware whether the any GOS entity is
contemplating action against any of the listed websites. End
Comment.) At the same time, the Coalition has been actively
developing a "business model' approach and plans to launch a
"macro website" to help users in Spain gain access to legal
content online so that they will be less inclined to download
it without authorization. Both MITYC and the Ministry of
Culture have expressed the intention to provide financial
support to the macroweb. Olcese noted that identifying the
right mix of incentives and sanctions to deter Internet
piracy is still a matter of trial and error; nobody knows
which model will work best.

7. (U) Maria Teresa Arcos, Executive Director for ISP
association Redtel, hailed the creation of the
Inter-Ministerial Commission and said the ISPs seek the
continued growth of a legal online market and an end to the
dichotomy between technology and culture. She also cited the
European Parliament's recent approval of the telecom package"
and the importance of finding a balance between competing
rights. While acknowledging the importance of dissuasive
measures, Arcos focused on the need for attractive legal
offer with flexible prices and said Redtel looks forward to
the launching of the Coalition's macroweb.

8. (U) Jesus Rubi of the Spanish Data Protection Agency
(AEPD) stated that data protection is not inimical to
intellectual property protection. He noted, however, that
under Spanish law, Internet Protocol addresses and their
association with individual users are personal data and thus
protected from disclosure in most circumstances. Under the
European Court of Justice's January 2008 ruling in Promusicae
v. Telefonica, ISPs are not required to disclose users'
identities in civil litigation, and governments are not
obliged to compel them to do so. Governments are only
required to seek a balance between privacy and property
rights. Rubi noted that the Congressional Sub-committee on
Intellectual Property had recently sent a questionnaire to
AEPD, which had replied by suggesting several points to be
taken into account if Congress wishes to consider amending
existing legislation.

RIGHTS-HOLDERS' CONCERNS

9. (U) Juan Junquera, Chief of Staff to Secretary of State
for Telecommunications and the Information Society Francisco
Ros, moderated the panel on the rights-holders' point of
view. Olivia Regnier of the International Federation of
Phonographic Industries (IFPI) cited figures showing that 95
percent of peer-to-peer (P2P) downloads of music are
unauthorized and thus illegal. She also pointed to figures
showing a steady decline in traditional music sales in Spain
since 2001 and said called for more cooperation on the part

MADRID 00001152 003.3 OF 004


of ISPs in combating illicit downloads.

10. (U) Dan Glickman, Chairman and CEO of the Motion Picture
Association of America (MPAA), referred to President
Zapatero's October 21 speech to the American Business Council
(ref D) in which he outlined the concerns of both the USG and
the GOS over IPR protection in Spain. Calling piracy a
"dagger through the heart" of creators, Glickman noted that
great quality works of art require both a conduit and an
artist. The Internet can be a powerful tool for the
dissemination of culture but also poses unique challenges for
which there is no magic solution. Voluntary agreements with
ISPs are welcome but are not enough in themselves; government
has a necessary role to play. The digital environment will
continue to grow as a medium for cultural transmission, but
the physical environment should not be overlooked. The
notion of "free content," while seductive to some, is an
invitation to anarchy. Legal online offers of content will
not work unless they are well-implemented within an adequate
legal infrastructure. Glickman stressed the importance of a
constructive, balanced solution and said MPAA looks forward
to the GOS announcement of concrete measures by year's end.

11. (U) Antonio Guisasola of the Music Producers of Spain
(Promusicae), in an oblique reference to State Secretary
Ros's characterization (ref E) of Spain's Internet piracy
problem as an "urban legend," sought to dispel two urban
legends of his own. The first is that the music industry
wants to do away with the Internet; the second is that a lack
of legal online alternatives is the reason piracy flourishes
in Spain. There are, he said, 370 legal music services in
Europe, with more appearing all the time. Consumers are able
to choose from among a range of options and are increasingly
getting better deals. Guisasola announced the launch of
Promusicae's own portal, www.elportaldemusica.es, to link
Spanish users to prominent legal sites. But legal offer, he
said, is not enough. He cited a Jupiter Research Study
showing that 32% of users in Spain frequently use P2P
facilities, compared to an average of 15% for Europe. Of
those, 52% say that free downloading has reduced their
purchases of original music. Also, only 32% of Spaniards
surveyed said they thought P2P activity was illegal, compared
to 64% in France, 79% in Germany, and 70% in Europe as a
whole. Guisasola said more cooperation is needed from ISPs,
and there must be a credible risk of real punishment to deter
wrongdoers. Carrots can help, but sticks are needed as well.
Responding to Junquera's reminder that P2P is not illegal
per se, but is a technology that can be put to legal or
illegal uses, Guisasola countered that almost all P2P
downloads of music are illegal.

12. (U) During the question-and-answer period, one questioner
asked whether the Inter-Ministerial Commission will recommend
dissuasive action only against websites that house infringing
material, or also against P2P portals. Junquera replied that
the GOS is constrained from going after P2P activity by the
basic Constitutional principle protecting private
communications from government interference. IFPI's Olivia
Regnier demurred, pointing out that P2P activity is a form of
public, not private, communication. Junquera, however,
reiterated that the focus of GOS enforcement efforts will be
on websites that host or provide links to infringing content.
He also sought to clarify State Secretary Ros's "urban
legend" remark, which has been much-criticized by content
providers. The GOS, he said, does not deny that Internet
piracy is a serious problem in Spain, deserving of government
attention. The GOS does, however, take issue with assertions
that Spain has significantly higher rates of Internet piracy
than its European neighbors, and that it is among the worst
in the world in this regard.

13. (U) The Conference included one final roundtable, on
implications for IPR of online social networks, and a speech
by Duke University Law Professor James Boyle.

COMMENT

14. (SBU) Though 2009 has been a frustrating year for
right-holders, there is a good chance it will end on a
positive note. In a meeting with Charge, MPAA CEO Dan
Glickman expressed satisfaction with his meetings with
Industry, Tourism, and Trade Minister Miguel Sebastian and

MADRID 00001152 004.3 OF 004


Minister of Culture Angeles Gonzalez-Sinde. Sebastian, he
said, was quite forthright and specific about the
Commission's work: It will deliver its recommendations by
year's end; these will include amending the law to give
government more tools to combat piracy; and one component
will be "an administrative course of action" to block
offending websites. According to various sources, State
Secretary Ros (who reports to Sebastian and was present at
his meeting with Glickman) and his staffers had been opposing
such an administrative remedy in the Commission's discussions
(refs B-C), but have apparently been brought around by the
other Ministries represented. Rights-holders, however,
remain concerned that the government may implement only
half-measures. Promusicae staged a demonstration in front of
MITYC on December 1 and presented Minister Sebastian with a
peition signed by 2,500 music professionals calling on the
government to take "valiant measures, as the French and
British governments have already done, to protect their
culture and jobs." End Comment.
CHACON

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