Reference ID:
07TALLINN66
   
Created:
2007-01-31 15:19
   
Released:
2011-08-30 01:44
   
Classification:
UNCLASSIFIED
  
Origin:
Embassy Tallinn

                   


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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA

RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG

DE RUEHTL #0066/01 0311519

ZNR UUUUU ZZH

R 311519Z JAN 07

FM AMEMBASSY TALLINN

TO RUEHC/SECSTATE WASHDC 9472

INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

RUCPDOC/USDOC WASHDC


UNCLAS SECTION 01 OF 03 TALLINN 000066

 

SIPDIS

 

STATE FOR EB/CBA, EB/TPP/IPE AND EUR/NB

COMMERCE PLEASE PASS USPTO/OFFICE OF ENFORCEMENT

HELSINKI FOR ECON

 

SIPDIS

 

E.O. 12958: N/A

TAGS: ECON EFIN KIPR EN

SUBJECT: ESTONIA: IPR WORKSHOP REVEALS SHORTCOMINGS AND

FORGES TIES

 

REF 06 TALLINN 424

 

¶1.  (U) Summary:  On January 17-18, Embassy Tallinn and the

U.S. Patent and Trademark Office (USPTO) held a workshop

focusing on copyright infringement in the digital

environment.  The event was a rare coming together of 60

Estonian police, prosecutors, judges, government officials,

law professors and industry representatives.  The group

discussed enforcement problems resulting from limits on

investigative tools, the prosecutorial practice of dropping

cases for lack of 'public interest', and the small size of

the market.  Panelists shared valuable best practices and

collaborated on techniques for pursuing internet-based IPR

criminals.  The event received local TV and press coverage,

and participants gave high marks to the interactive case

study and mock trial.  End Summary.

 

¶2. (U) At a two-day workshop titled "Criminal Enforcement

of Intellectual Property Rights", sixty Estonian police

officers, prosecutors, and judges met for the first time

together to discuss and learn about IPR-related crimes and

procedures.  The Enforcement Division of the U.S. Patent &

Trademark Office (USPTO) sponsored the event.  The workshop

focused on the digital environment, since internet piracy

is a new and constantly evolving challenge to IPR

enforcement in countries with well-developed IT sectors,

such as Estonia.  This event was a follow-up to Embassy

Tallinn's international IPR conference in April 2006,

titled "Copyright Infringement in the Digital Environment"

(Ref A).  USPTO, the FBI, DOJ, and the U.S. District Court

for Southern New York sent panelists, as did the

International Federation of the Phonographic Industry

(IFPI), the Business Software Alliance (BSA), the Estonian

Organization for Copyright Protection (EOCP), and the

Patent Office of the United Kingdom.  The key judge,

prosecutor, and investigator from a recent high-profile

Finnish case discussed "Finreactor", Finland's largest

peer-to-peer (P2P) piracy case, in which twenty-two people

were convicted and ordered to pay damages of EUR 420,000 to

music, film, and computer game companies.

 

¶3.  (U) During introductory remarks, the Estonian Police

Commissioner and the Deputy Under-Secretary on Criminal

Policy for the Ministry of Justice both stressed the

economic, cultural, and security reasons for engaging in

the fight against piracy.  In their characterization,

piracy not only costs industry billions each year, but also

represents lost jobs and lost tax revenues.  Increasingly,

they saw piracy as a source of income for organized crime

syndicates, since the illegal copying and sale of IPR

material is far safer and more lucrative than drugs or

other crimes.  Robert Stoll of the USPTO noted that

emerging artists -- and local cultures -- are hurt

disproportionately by internet piracy because they, unlike

industry mega-stars, cannot afford to continue performing,

if pirates steal what should have been legitimate sales.

 

Police find common ground; different techniques

--------------------------------------------- --

 

¶4.  (U) The discussion panel on "Investigating IPR Crimes"

generated the most interest from conference participants.

All parties agreed that the hardest aspect of investigating

illegal P2P networks is pinpointing the identity and

location of a given internet provider (IP) address.

Differences arose, however, when comparing the measures

that law enforcement agencies can take.  Robert Herzog of

the FBI said that giving false information, using an alias,

pretending to be a file sharer or a hacker, using

informants, even making illegal purchases in the pursuit of

an investigation are all permitted in the U.S. - under

prosecutorial oversight.  However, Estonian investigators

said they cannot do such things without a court order from

a pre-trial judge. According to Finnish prosecutor Antti

Pihlajamaki, the police did not use undercover identities

in the Finreactor case; one of the detectives used his own

nickname in chat rooms to collect evidence, and did not

provide false information.  While investigators in the

Finnish case managed to gather sufficient evidence without

going undercover, Estonian police and industry groups say

the requirement to obtain such pre-trial court orders does

pose an obstacle to law enforcement here - especially given

the relative inexperience of judges in handling digital IPR

cases.

 

A Question of Priorities

------------------------

 

TALLINN 00000066  002 OF 003

 

 

 

¶5. (U) A bigger obstacle to the criminal enforcement of IPR

is Article 202 of the Estonian Code of Criminal Procedure.

This 'discretionary clause' allows prosecutors to drop

cases they deem lacking sufficient public interest.

According to local industry groups, this article is applied

extensively in IPR cases, which are often dropped even when

the industry brings evidence of a violation to law

enforcement. When the IFPI panelist asked for an

explanation of why prosecutors choose to drop IPR cases

under this article, one responded that this is at their

discretion and not for public discussion.  Prosecutors in

the audience referred to criminal cases as an

"extraordinary measure" and recommended that industry use

civil courts instead.  U.S. panelists noted that although

95% of IPR infringement cases in the U.S. are handled in

civil court, it is important to utilize criminal

prosecution occasionally - especially in cases of high-

profile or repeat offenders - to send a message to would-be

IP pirates.

 

¶6.  (U) During a panel on "The view from private industry",

the problems of small markets came up.  The panel noted,

the major record and movie industry groups worldwide (IFPI,

MPAA and trademark representatives) are less motivated to

put resources into Estonia to combat piracy more

aggressively.  Eva Tibar-Suvalav, representing Nike, said

that many companies are reluctant to invest in combating

counterfeit goods, because the cost of doing so is often

greater than the losses due to such trademark

infringements.  Nike, she said, is one of the few

exceptions, and as a result it is virtually impossible to

find fake Nike products in Estonia, yet counterfeits of

other sportswear brands are still available.  Peter Scott

of IFPI offered their highly sophisticated forensic DVD

analyses lab in London as a service to law enforcement.

Privately, however, he told us that IFPI has had to cut

funding to the EOCP - the only anti-piracy organization in

Estonia. Mr. Scott also described a novel enforcement

approach being used by IFPI to go after one of the largest

online digital piracy groups in Russia - follow the money.

IFPI has obtained the cooperation of Visa, MasterCard and

American Express to block transfers of funds into the bank

accounts of the Russian website. Panelists observed,

however, that those infringing IPR law in Estonia, are more

often individual end-users, less likely to attract the

resources of larger industry groups.

 

¶7.  (U) The Judges' panel with U.S. District Judge Lewis

Kaplan's presentation on the U.S. system was one of the

highlights of the workshop, and revealed another key

difference between the two legal systems: sentencing

guidelines.  In Estonian courts, sentencing occurs

simultaneous with the announcement of the verdict and is

based on the Estonian penal code.  Participants were

surprised to learn that U.S. judges are constrained by

federal guidelines, which stipulate sentencing based on the

specific circumstances of the crime brought into evidence.

The result is that the U.S. system gives more leeway to

prosecutors, while in the Estonian and Finnish system,

judges have more discretion in the final outcome of the

case.  Conference participants considered the subsequent

interactive case study and mock trial to be very practical,

as very few digital IPR cases in Estonia actually reach the

trial and verdict stage.  The mock prosecution and defense

gave near Oscar-winning performances during the trial,

which the panel of Estonian, Finnish, and U.S. judges ended

with a unanimous guilty verdict.

 

¶8.  (U) Media coverage of the event raised awareness of the

pervasiveness of internet piracy in this otherwise tech-

savvy country. USPTO's Robert Stoll gave a 30-minute live

interview on the popular Estonian morning program

"Terevisioon", which was rebroadcast several times over the

next few days.   The Russian-language newspaper "Molodjozh

Estonii" and Russian-language TV evening news also covered

the workshop, and the Estonian-language paper "Postimees"

ran an op-ed by the Charge d'affaires on IPR protection the

following week.

 

¶9.  (U) Comment: The two-day USPTO workshop spurred greater

understanding both by law enforcement and by industry of

the challenges they each face, and the stakes involved, in

digital IPR cases.  Further attention to IPR enforcement by

local authorities is all the more important, because major

international industry groups do not see enough incentive

to step into such small markets to combat piracy.  Further,

 

TALLINN 00000066  003 OF 003

 

 

the structure of the Estonian legal system makes it even

more important for judges to have a clear understanding of

IPR enforcement.  Based on the turnout and high level of

interest in the USPTO workshop, together with recent AmCham

seminars on IPR (for both teachers and small businesses),

we see progress on increasing awareness and compliance in

Estonia with international IPR standards.  There is still a

long way to go to bring down the high rates of digital

piracy, but the new working-level relationships and

experience coming out of this workshop will further the

cause of IPR enforcement.  End comment.

 

¶10.  (U) This cable was cleared by USPTO.

 

GOLDSTEIN