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Cablegate: Microsoft’s “Relationship With the Government” and Pressure for Countries to Adopt Intellectual Monopolies Using Shame Lists

Posted in America, Cablegate, Microsoft at 6:03 pm by Dr. Roy Schestowitz


Street lamp

Summary: A collection of almost a dozen cables showing how sanctions and lists of shame are being used to help plant seeds for Microsoft et al. all around the world

TODAY we are going to go through a lot of material and summarise everything of relevance upfront. We will start with Turkey's sanction siege, which was intended to make it more West-esque so as to benefit multinationals (mostly US-based companies). Turkey is not alone and today we’ll deal with 4 countries as examples of interest from all around the world.

Turkey is being put on shame lists, where laws need to be changed n order to get the country off those lists. Think along the lines of sex offenders list, terrorists watchlist, “wanted” mug shots at the police station, server/IP blacklist, etc.

In the first cable, under ¶7, Turkey is mentioned in relation to the BSA. To quote:

As noted in ref A points, the GOT requires that all software
used on government computers be licensed. However, Turkey’s chapter
of BSA has heard anecdotally that the estimated piracy rate on
government computers is approximately 50 percent. They emphasized
to us, however, that they believe that the government is acting in
good faith and trying to eliminate pirated software use by
government officials. Comment: The head of the Turkey office of a
major U.S. software producer told us that he doubts the utility of
such proclamations in relatively more-developed countries like
Turkey and agreed that the Government is working to reduce internal
piracy. He also said that an agreement had more symbolic than
practical value, given that there is no centralized point for
government software procurement. In 2006, Microsoft CEO Bill Gates
visited Turkey and announced his plans to support a techno-park in
Istanbul and invest more in Turkey, which he characterized as a
regional technological base. Microsoft and other companies, like
Cisco, have close cooperative relationships with the government of

Later on we find examples from Serbia and Montenegro, staring with a cable in which ¶11 says:

On February 1, 2006, Montenegrin Prime Minister Milo
Djukanovic together with Bill Gates signed a three-year
contract, providing software licenses to Montenegrin
educational and scientific institutions. In September 2005,
the GoM and Microsoft concluded a USD 2.36 million contract,
creating a strategic partnership between the GoM and
Microsoft for legalization of all the Microsoft software
being used by state institutions. By mid-March, Microsoft
and local governments in Montenegro will have completed the
licensing of software used by the municipalities.

In the next cable, under ¶5 which has the heading “Microsoft Engages in Montenegro”, it says:

(U) Microsoft is working with the GoM and with private
business to increase the use of licensed software in
Montenegro. After meeting with PM Djukanovic, Bill Gates
announced Microsoft would provide software on favorable
terms to Montenegro’s educational and scientific sector. In
the private sector, Microsoft will team with NGO Montenegro
Business Alliance to educate business about intellectual
property rights.

The Business Alliance is Microsoft’s thug. Microsoft uses it to distance itself from enforcement (imprisonment, fining, etc.) and bad PR.

Moving on to a cable from Indonesia , in ¶7 we find that

On January 13, the Ministry of Information and
Communications Technology and Microsoft signed an MOU on
legalizing all GOI Microsoft software. President Yudhoyono,
on his own initiative, personally led the effort to sign the
MOU, following his 2005 meeting with Microsoft Chairman Bill
Gates. It is estimated that 90 percent of GOI computers use
pirated versions of Microsoft operating systems and

Bill Gates sure gets around, does he not?

Another Cablegate cable, this one also about the “SPECIAL 301 INITIATIVE RESPONSE,” comes from Slovakia and in ¶9 it says:

According to industry experts, software piracy has
noticeably decreased in Slovakia. Microsoft’s Bill Gates
said during his visit to the country in January 2004, “We
have registered a decline in software piracy in Slovakia.”
Based on the Microsoft’s Enterprise Agreement with the GOS
signed in 2002, all copyrights of Microsoft software being
used in the state administration have been purchased by
Slovak authorities for a total of USD 13 million
(representing a 65 percent discount on the regular price).
In 2001, a similar agreement was signed between Microsoft
and the Slovak Chamber of Physicians and in 2004, Slovakia
joined Microsoft’s worldwide project “Partners in

Got to love Mr. Gates and his ‘charity’, changing laws around the world, for power and profit. Here are the cables in question. From Turkey:

DE RUEHAK #0128/01 0231535
R 231535Z JAN 07

E.O.12958: N/A 
TAGS: ECON [Economic Conditions], 
ETRD [Foreign Trade], 
KIPR [Intellectual Property Rights], 
PGOV [Internal Governmental Affairs], 
TU [Turkey] 
Ref: A) 06 STATE 183957 
     B) 06 STATE 180082 
ANKARA 00000128  001.2 OF 003 
¶1. (U) Turkish officials welcomed the opportunity to work with us on 
intellectual property issues in advance of the regular "Special 301" 
season.  We coordinated with several Turkish government agencies, 
including the Foreign Trade Undersecretariat (FTU), which is 
responsible for ensuring that Turkey is upholding its international 
obligations, such as IP protection obligations.  FTU and the 
Ministry of Justice (MOJ) provided extensive written responses to 
the questions raised in reftels.  We also met separately with FTU, 
MOJ, Customs Undersecretariat, and Patent Institute and received 
information from the Turkish National Police and the Turkish chapter 
of the Business Software Alliance and member companies.  Finally, 
Ambassador plans to meet with State Minister for Foreign Trade and 
Customs, Kursad Tuzmen, in the near future to discuss these issues 
with him and encourage his involvement during the "Speial 301" 
process this year. 
¶2. (SBU) In its coordinated written submission, FTU noted a number 
of improvements during 2006 related to Turkey's IP protection.  A 
summary of the response to ref A follows: 
--  In response to the question of pharmaceutical data-exclusivity, 
the Ministry of Health (MOH) stated that its review of the generics 
applications received prior to January 1, 2005, is ongoing.  FTU 
noted that only one case has been approved thus far (for a copy of 
one of Danish firm Lundbeck's products), and added that during 
meetings with PhRMA company representatives in Turkey, the companies 
conceded that the claim for data protection of the molecule was 
--  Regarding patent linkage, FTU argued that Turkey's system is 
similar to that of the EU and several other countries and that 
implementing a system similar to that of the U.S. is not an 
international obligation.  It also pointed to the Turkish Patent 
Institute's (TPI) recently implemented computerized database, which 
is accessible by the public through their website, and the regular 
reports sent by TPI to MOH listing recently approved pharmaceutical 
patents.  They added that there has not been a case since that of 
Eli Lilly's where a generic of a product with a valid patent in 
Turkey was granted marketing approval. 
--  The Ministries of Justice, Culture and Tourism, the Customs 
Undersecretariat and the Turkish National Police have continued 
their combined campaign against pirated goods, and the MOJ provided 
updated statistics on seizures.  In addition, they described efforts 
to disseminate computerized information about counterfeit books to 
law enforcement, prosecutors and judges in real-time. 
--  According to Turkey's chapter of the Business Software Alliance 
(BSA) the situation has improved since the governmental decree 
calling for the use of licensed software in all government agencies. 
 While anecdotally, government use of pirated software is still 
high, BSA representatives and member companies in Turkey believe 
that the government is acting in good faith to improve the 
situation.  BSA is also working with the Ministry of Culture and 
Tourism to implement public awareness campaigns. 
--  Finally, the Ministry of Justice allocated additional resources 
in 2006 to help alleviate the backlog of IPR cases and more 
efficiently prosecute offenders.  The number of specialized IPR 
courts increased to 12, including two additional courts in Istanbul. 
 In addition, judges, prosecutors and law enforcement officials 
continue to participate in GOT, EU, and U.S. training programs. 
¶3. (U) More detailed responses to the questions raised in ref A are 
listed below to correspond with the original talking points: 
¶4. (U) "Continue the process of reviewing all applications for 
marketing approval submitted prior to 01.01.05, and ensure that no 
approvals are granted for molecules under patent protection." 
(SBU) In FTU's written submission, it noted that data exclusivity 
for pharmaceutical products is a commitment for Turkey in accordance 
with its EU Association Agreement.  Regulations on this issue have 
been prepared in accordance with the EU requirements.  Turkey 
introduced data exclusivity for pharmaceutical products on Most 
Favored Nation basis to all of its trading partners.  Therefore, 
data exclusivity is not limited to original products licensed in EU 
member countries.  Acquiring a license in any country after January 
1, 2001, is sufficient for data exclusivity if no generic 
manufacturer had applied for licenses in Turkey as of January 1, 
2005.  The term of exclusivity is limited to the duration of the 
drug patent or to six years after the date of licensing, which is 
ANKARA 00000128  002.2 OF 003 
the same system used by the EU. 
(SBU) Concerning the outstanding generic applications that were 
submitted prior to January 1, 2005, MOH stated that these 
applications are still being examined.  However, FTU added that this 
does not necessarily mean that licenses will be issued for all of 
the applicants.  Applications that do not meet the necessary 
criteria will be rejected.  FTU added that to date, only one such 
application has been approved (for a copy of one of Danish firm 
Lundbeck's product), and that the pharmaceutical companies conceded 
in meetings with FTU that the product that was approved was not 
necessarily an exact copy of Lundbeck's protected molecule. 
¶5. (U) "Implement a system of coordination between health and patent 
authorities to prevent the issuance of marketing approvals for 
authorized patent-infringing copies of pharmaceutical products." 
(SBU) FTU asserted that Turkey utilizes a system similar to the EU's 
in which a firm applying for licensing of a product must prove that 
the new product has not been licensed nor has been patented in 
Turkey.  For example, a generics manufacturer would have to include 
information in its application showing that the product has not been 
patented in Turkey.  In 2006, the Turkish Patent Institute (TPI) 
created a searchable database website that permits users to search 
for patented, copyrighted, and trademarked material in Turkey.  The 
TPI also sends regular reports to the MOH about recently-approved 
health-related patents (including pharmaceuticals), the last of 
which was sent in November 2006.  Between reports, MOH officials can 
search the patent database.  The TPI does not, however, provide 
information to outsiders about patent applications that have not yet 
been approved.  FTU added that since the highly publicized case in 
which copies of Eli Lilly's product Zyprexa were granted licenses 
while it had a valid patent, there have been no subsequent cases of 
this type in Turkey. 
¶6. (U) "Continue the campaign against book piracy and provide 
statistical readouts of success." 
(SBU) The MOJ provided the following statistics on seizures 
resulting from operations against IPR violators conducted between 1 
April 2004 and 7 December 2006: 
                       2004       2005       2006 
                  ---------  ---------  --------- 
# of Ops              2,844      3,442      3,562 
# Prosecuted          3,824      3,611      4,712 
Unreg. CD/VCDs    2,020,370  2,893,357  4,133,385 
Unreg. DVDs          59,346    316,954    401,611 
Unreg. Books        274,527    240,335    156,914 
Unreg. Video Cass.      675        128      1,512 
Unreg. Tape Cass.    55,202     45,590     69,987 
Reg. CD/VCDs          4,649        659      1,201 
Reg. DVDs                 -        419        520 
Reg. Books            3,783      1,480      1,840 
Reg. Tape Cass.       3,623      3,489      3,582 
TOTAL SEIZURES    2,422,175  3,502,411  4,770,552 
(SBU) In addition to seizures, in May 2006, a web-based banderole 
automation system was established in order to provide judges, 
prosecutors, security forces, business associations and copyright 
holders with real-time information regarding pirated goods. 
(SBU) Plans for the future include an Optical Disk Investigation 
Center which, based on the model of IFPI laboratories, will provide 
law enforcement with the ability to quickly identify counterfeit 
material.  The MOJ also plans to establish IPR offices in each of 
the provinces and to provide additional training to raise the 
awareness of the police and officials responsible for fighting 
piracy in the provinces.  As additional encouragement, a draft bill 
was sent to Parliament providing bonus compensation for law 
enforcement officials who seize pirated goods.  It has been approved 
by the relevant Parliamentary Sub-Committee and will be submitted 
for approval by the General Assembly. 
¶7. (U) "Provide feedback on the success of the governmental decree 
mandating the use of licensed software in governmental agencies. 
Address rampant business software piracy in the private sector and 
by individuals by initiating enforcement actions and public 
awareness campaigns." 
(SBU)  The Ministry of Culture and Tourism created a public 
awareness campaign in cooperation with Turkey's chapter of the 
Business Software Alliance (BSA) that includes newspaper and TV 
advertisements explaining the illegality and penalties associated 
ANKARA 00000128  003.2 OF 003 
with using pirated software and showing the logo of the MOCT and 
(SBU)  As noted in ref A points, the GOT requires that all software 
used on government computers be licensed.  However, Turkey's chapter 
of BSA has heard anecdotally that the estimated piracy rate on 
government computers is approximately 50 percent.  They emphasized 
to us, however, that they believe that the government is acting in 
good faith and trying to eliminate pirated software use by 
government officials.  Comment:  The head of the Turkey office of a 
major U.S. software producer told us that he doubts the utility of 
such proclamations in relatively more-developed countries like 
Turkey and agreed that the Government is working to reduce internal 
piracy.  He also said that an agreement had more symbolic than 
practical value, given that there is no centralized point for 
government software procurement.  In 2006, Microsoft CEO Bill Gates 
visited Turkey and announced his plans to support a techno-park in 
Istanbul and invest more in Turkey, which he characterized as a 
regional technological base.  Microsoft and other companies, like 
Cisco, have close cooperative relationships with the government of 
Turkey.  End comment. 
¶8. (U) "Provide the judiciary with more resources to increase 
efficiencies (process cases more quickly) and take concrete steps 
(e.g., sentencing guidelines) to encourage judges to impose 
deterrent sentencing." 
(SBU) The Ministry of Justice (MOJ) recently increased the number of 
IPR courts in Turkey to 12, seven of which are civil courts and five 
of which are criminal.  This increase added two additional IPR 
courts in Istanbul to reduce the backlog.  The MOJ is also working 
on creating additional courts in Istanbul to further increase 
efficiencies and to locate additional warehouses in which seized 
goods can be stored while the trial is proceeding. 
(SBU) The MOJ, in cooperation with the EU, has provided a number of 
training seminars for judges, prosecutors and law enforcement 
officials.  For example, 8 IPR judges and prosecutors participated 
in a 10 month training program in the EU IPR-related agencies.  In 
addition, an IPR Documentation Center was established at the 
University of Ankara Faculty of Law.  This Center provides 
centralized information related to IPR international law and best 
practices.  The MOJ has also developed a computerized network that 
links the IPR Courts, the Documentation Center, the MOJ, the TPI and 
the Customs Administration. We also continue to send Turkey's IPR 
judges on IV programs to the U.S. 
(SBU) The following MOJ information shows the average duration of 
IPR cases: 
                     APPEAL                 APPEAL 
-------------     --------------         ----------- 
Trademark          3 - 7 months             2 years 
Patent             3 - 10 months            2 years 
Utility Model      2 - 10 months            2 years 
  Moral rights     3 - 10 months            2 years 
  Financial rights 3 - 8 months             2 years 
  Other offences   3 - 10 months            2 years 
  Related rights   3 - 8 months             2 years 
  Banderole crimes 3 - 6 months             2 years 
Seizure            1 - 2 days 

Also from Turkey (being downgraded):

E.O. 12958: N/A 
TAGS: ETRD [Foreign Trade], KIPR [Intellectual Property Rights], 
TU [Turkey], USTR [Office of the Special Representative for Trade Negotiations] 
SUBJECT: Special 301 - Recommendation to Downgrade 
Turkey to Watch List Status (SBU) 
Ref:  (A) State 14937 (B) 05 Ankara 6378 (C) 05 Ankara 
7097 (D) 05 Ankara 6899 (E) 05 Ankara 971 (F) 06 
Istanbul 124 (G) 06 Ankara 479 (H) 05 Ankara 7308 (I) 05 
Ankara 7296 
¶1. (SBU) Over the past year, the GOT has continued to 
improve intellectual property protection, especially for 
copyright owners.  Turkish courts began rendering 
increasingly deterrent sentences for copyright 
infringers in a more expedited manner.  An expanded data 
exclusivity regulation provides protection for new 
pharmaceutical molecules, although it is still short of 
TRIPS and EU requirements and leaves the fate of 35 
products in question.  The most productive way to ensure 
that Turkey continues to move toward full implementation 
of international IPR standards would be to include 
Turkey on the Watch List in the 2006 Special 301 Review 
and continue to engage the GOT to improve intellectual 
property protection.  Such steps would recognize the 
successful actions taken over the past year and set a 
clear agenda for further work in the period ahead.  End 
¶2. (U) Inadequate protection of the confidential test 
data of pharmaceutical companies has been Turkey's most 
egregious IPR shortcoming.  In response to intense EU 
and USG pressure, however, the GOT broadened data 
protection in a regulation issued by the Health Ministry 
in June 2005.  Data exclusivity is provided to all 
products granted marketing approval in Turkey after 
January 1, 2005.  The six-year term of protection starts 
on the date of licensing in a European Customs Union 
(ECU) country.  The GOT argues that it cannot 
differentiate itself from other ECU countries with 
respect to data exclusivity.  EU representatives in 
Turkey concede that, while the ECU system is complex and 
this issue is not entirely clear in its regulations, 
this is probably the case.  They add that under ECU 
statutes, an ECU country cannot block access to a 
product that has been approved or produced in other ECU 
countries.  Using the leverage of the EU accession 
process, the EU continues to engage the GOT at the 
highest level, including letters from Commissioner 
Mandelson to FM Gul and meetings with State Minister 
Babacan, to push the GOT to implement fully EU-compliant 
regulations on this issue. 
¶3.  (SBU) Prior to the January 1, 2005 start of enhanced 
data protection, generic manufacturers in Turkey filed a 
number of "midnight" applications for approval of 
products not yet registered in the Turkish market. 
Pharmaceuticals Research and Manufacturers Association 
(PhRMA) companies in Turkey remain concerned about the 
data protection available to up to 35 molecules for 
which such generic applications were filed (ref B).  MOH 
officials argue that under Turkish law they must process 
these applications, but that this in no way guarantees 
that they will subsequently gain approval (ref C). 
Local representatives of PhRMA companies tell us that 
under Turkish law these files do not qualify for 
approval because they may rely on research-based 
companies' full data submissions that were not filed in 
Turkey prior to January 1, 2005.  MOH officials also 
tell us that the 210 day processing deadline for 
applications does not apply to files submitted prior to 
January 1, 2005, and therefore they have made it a 
priority to process the applications submitted after 
this date and will get to the "midnight filings" as time 
becomes available.  While the MOH has not been willing 
to definitively state whether or not these 35 products 
enjoy data exclusivity, officials have indicated to us 
that they may be solving the problem by waiting for what 
would have been the end of the data exclusivity period 
before making a decision. 
¶4. (SBU) On the issue of patent linkage, the Health 
Ministry recently told us that the Turkish Patent 
Institute (TPI) holds responsibility for patent linkage 
reviews.  Under Turkish law, there is no linkage 
requirement between a patent search and licensing 
approval.  There does exist, however, a requirement to 
determine whether or not a patent exists prior to 
granting marketing approval, the final step before a 
product becomes available to the Turkish market. 
¶5. (U) Citing concerns on data exclusivity and patent 
linkage, PhRMA claimed IP-related losses of USD 1.36 
billion - 21.8 percent of sales in Turkey in 2005, up 
from USD 887 million last year.  Describing serious non- 
IP problems with respect to Turkish price controls and 
reimbursement system reforms, PhRMA again recommended 
elevating Turkey to Priority Foreign Country status. 
Embassy notes that data exclusivity comprises only USD 
205 million of PhRMA's estimated damages.  We also note 
that, following the MOH's expansion of data protection 
in June 2005, the pharmaceutical companies operating 
here have expressed a willingness to let implementation 
take its course for now rather than pushing for our 
continued high-level engagement.  It is not clear what 
if any patent-related damages are represented by the 
remaining USD 1.16 billion claimed by PhRMA. 
Copyright, Trademarks and Other IP Issues 
¶6. (U) While the International AntiCounterfeiting 
Coalition (IACC) did not recommend that Turkey remain in 
any Special 301 category in 2005, the International 
Intellectual Property Alliance (IIPA) recommended that 
Turkey remain a Priority Watch List Country.  While 
doing so, however, IIPA's submission describes a number 
of improvements made by the GOT to fight piracy and 
strengthen enforcement in 2005.  IIPA estimates 2005 
industry losses in Turkey at over USD 160 million, down 
from 2004 estimated loss of USD 190 million. 
¶7. (U) Turkey has indeed taken a number of significant 
positive steps in copyright enforcement in the last 
year.  These include the following: 
-- 3.5 million pirated goods were confiscated in 2005 
during raids and other ex officio actions (those not 
requiring a court order) by the Turkish National Police 
-- In July 2005, the Turkish Court of Cassation (the 
highest appeal court) upheld a previous Ankara IPR Court 
ruling cited in our 2005 submission (ref E) against 
three individuals who were sentenced to 2.5 years in 
prison and a YTL 60,000 (approx USD 44,000) fine.  This 
ruling now provides a precedent for future cases and 
should lead to expedited decisions during the appeals 
-- In January 2006, the Istanbul IPR Court sentenced a 
pirated optical disk producer to 2 years, 13 months and 
15 days imprisonment for illegally copying and 
distributing copyrighted material, an additional 2.5 
years imprisonment for violating a copyright without the 
right owner's consent, the confiscation of 4,700 pirated 
DVDs, and the sale of the production equipment worth YTL 
160,447 (approx USD 120,000).  This was the first time 
in which the production equipment was seized and sold in 
Turkey and responds directly to IIPA's recommendation 
that criminal liability include seizure and forfeiture 
of all equipment and goods found in such facilities. 
-- The Culture and Tourism Ministry (MOTC) and the 
Ministry of Education (MOE) created an IPR-related 
curriculum as part of primary and secondary school 
civics programs. 
-- The MOE began a public-education campaign targeting 
universities and places of business providing photocopy 
services in their vicinity stating that the reproduction 
of copyrighted material is illegal. 
-- Due to private sector and inter-agency GOT pressure, 
a proposed amendment that would remove criminal 
penalties for infringing goods produced outside of 
Turkey (ref D) has been set aside and is not expected to 
be passed by the Parliament. 
¶8. (U) In 2004, Turkey published its first Plant Variety 
Protection (PVP) Law.  At least one subsidiary of a U.S. 
seed company, however, reported difficulty obtaining 
protection for its commercial seed under this new law. 
In the last six months, however, we have had no further 
contact from the company regarding this issue. 
Unlicensed Software Use 
¶9. (SBU) In the 1990s, the GOT implemented an internal 
memorandum banning the use of unlicensed software. 
According to NGOs in Turkey that monitor this usage, the 
memorandum's requirements are sufficient for the 
protection of software rights holders.  Official 
statistics, however, are not available concerning the 
percentage of government offices in compliance, and no 
formal mechanism of enforcement exists. 
¶10. (SBU) The private business and home use of 
unlicensed software remains a problem.  In a January 
2006 visit to Turkey, however, Microsoft's Bill Gates 
congratulated the GOT on its effort to reduce software 
piracy and launched a new program, "My First Computer," 
which aims to provide low cost computers (approx USD 
300) to 80 percent of Turkish households (ref F).  Gates 
described Turkey as a "dynamic emerging market" and 
alluded to the possibility of further IT investment in 
the country.  According to Turkey's chapter of the 
Business Software Alliance, approximately 66 percent of 
the software in Turkey is pirated.  (Note: While this 
seems high, compared to other more developed developing 
countries, Turkey's home computer use is low, estimated 
at only 16 percent of households or an estimated 10 
million people using 750,000 computers.  End note.) 
International Treaties 
¶11. (SBU) Turkey has not yet ratified the 1996 WIPO 
Copyright Treaty (WCT) or the WIPO Performances and 
Phonograms Treaty (WPPT).  MOCT officials recently told 
us, however, that the matters were at the Parliament and 
they hoped, but were not certain, that they would be 
considered and approved during the 2006 Parliamentary 
session.  They added that in practice Turkey already 
complies with these treaties. 
¶12. (SBU) As a result of the October 2005 start of 
Turkey's EU accession talks, the GOT has begun a 
harmonization effort to align its IPR regulations with 
those of the EU.  In an effort to strengthen Turkey's 
copyright protection and to enhance enforcement, GOT IPR 
judges, prosecutors, police and customs officials have 
participated in a number of training programs and 
twining projects in which officials from another EU 
country work closely with relevant officials on specific 
IPR issues.  Most recently 8 additional judges and 
several additional prosecutors were selected to serve in 
the IPR courts and receive training.  The MOCT also held 
a seminar for 75 TNP officers on detection of pirated 
goods, investigation and enforcement.  2005 also marked 
the addition of a former IPR court judge to the Court of 
Cassation, thus providing much-needed expertise to that 
court of appeal.  This should hopefully expedite future 
appeals in 2006. 
¶13. (U) While the GOT's EU accession process will 
provide many training opportunities, we continue to 
support USG training courses for Turkey's IPR judges, 
prosecutors, police and customs officials.  One useful 
avenue of training would be a course linking IPR crimes 
with organized crime and terrorist organizations.  Many 
GOT officials believe that proceeds from pirated 
products fund the PKK terrorist organization, although 
no connection has been found.  It would be useful for 
Turkey's prosecutors and investigators to receive 
training on how to detect and link such activities with 
these organizations and prosecute the offenders. 
¶14. (SBU) The June 2005 expanded data exclusivity 
regulations, stepped up copyright enforcement and 
deterrent sentences represent significant progress on 
intellectual property protection.  Due to Turkey's EU 
harmonization process, the USG and the EU are working 
together to emphasize the importance of these issues and 
provide training and technical support.  In addition, 
these issues were emphasized during the January Trade 
and Investment Framework (TIFA) Council meeting by USTR 
representatives.  We supported putting Turkey on the 
Priority Watch List in 2004 and 2005 in order to apply 
the pressure needed for the GOT to implement much-needed 
reform.  Serious steps have been taken and should be 
recognized.  Keeping Turkey there in 2006 could slow 
down this progress if there is a political backlash 
against outside pressure, especially if this pressure is 
seen as not taking into account Turkey's progress.  With 
the increase in raids and contraband seizures, a more 
expedited judicial process that is issuing more punitive 
penalties for IPR infringers, and the assurance of data 
exclusivity for all but 35 remaining pharmaceutical 
molecules, we believe that downgrading Turkey to the 
Watch List in 2006 would encourage the GOT to reinforce 
and continue its IPR enforcement efforts while still 
maintaining pressure to continue its efforts. 

Here again is Bill Gates, who lobbied the Prime Minister, Tayyip:

E.O. 12958: N/A 
TAGS: OPRC [Public Relations and Correspondence],
KMDR [Media Reaction Reporting], TU [Turkey] 
--------------------------------------------- -- 
Erdogan: HAMAS, Israel Must Recognize Each Other - Milliyet 
US to Cut 400 Million USD of Aid to Palestine - Vatan 1/29 
US: HAMAS Must Denounce Terror - Vatan 1/28 
EU Warns Ankara About Iran - Sabah 
Iran Warns: If Attacked, We'll Strike Israel - Vatan 1/29 
Newsweek: US Military Negotiates with Resisters in Iraq - 
Georgia Asks for Turkey's Support to Join NATO in 2008 - 
Bill Gates Promises More Investment in Turkey - Vatan 
ABC Reporter, a Cameraman Heavily Wounded in Iraq - Hurriyet 
Gul: Turkey's Cyprus Proposal a Huge Opportunity for Peace - 
Yeni Safak 
Annan to Launch New Cyprus Initiative in May - Zaman 1/28 
Erdogan: Turkey May Mediate Between HAMAS, Israel - Yeni 
Safak 1/28 
HAMAS Leader: US Not Our Enemy - Yeni Safak 
HAMAS Will Establish Palestine Army - Yeni Safak 1/29 
Merkel: Germany, EU May Cut Financial Aid to Palestine - 
Merkel: Iran a Threat against Democratic World - Cumhuriyet 
Americans Want Military Action if Iran Continues Nuclear 
Program - Zaman 1/29 
Pope Benedict XVI to Visit Turkey in November - Yeni Safak 
Athens Mayor Bakoyani to Become Greece's FM - Radikal  1/29 
US Troops Detain Insurgents' Wives in Iraq - Cumhuriyet 1/29 
4 Killed in Insurgent Attacks Against Churches in Baghdad, 
Kirkuk - Cumhuriyet 
Saddam, Angered at New Judge, Leaves Courtroom - Zaman 
Erdogan Offers Turkey's Mediation between Israel and 
Palestine:  Weekend papers quote Prime Minister Tayyip 
Erdogan as saying, in Davos, that Turkey is ready to act as 
a mediator between Israel and the new Palestinian 
administration led by HAMAS.  Erdogan's remarks have 
'stunned' the international community, say papers.  Turkish 
officials in Ankara told the press that Erdogan's proposal 
was well intentioned, but not realistic, and that it will 
not receive a positive response from the international 
Alpogan Wraps Up Meetings in US:  On Friday, Turkish 
National Security Council (NSC) Secretary General Yigit 
Alpogan told the press in Washington, that he had explained 
to Americans Turkey's views on issues such as Ankara's 
Cyprus proposal, Iraq, Iran, Syria, Armenian genocide, and 
the PKK.  Alpogan said there was no sense in holding a 
referendum in Kirkuk next year, since Kurdish efforts to 
change the demography of the oil-rich Iraqi city continue. 
He said a referendum held solely for Kirkuk would have 
adverse effects on Iraq as a whole, and called on the US to 
'pay attention' to the issue. 
Turkey favors a diplomatic process regarding Iran's nuclear 
program, Alpogan said, warning that severe pressure from the 
international community may boost the nationalistic feelings 
of Iranians.  Alpogan also emphasized that Turkey may act as 
a 'facilitator' between Syria and the western world, warning 
Damascus whenever necessary.  Alpogan noted that the United 
States has an 'image problem' in Turkey explaining that, 
'President Bush says that the US opposes all forms of 
terrorism. Yet the U.S. continues to merely watch the 
presence of PKK terrorists in northern Iraq.  A step taken 
against the PKK would change for the good Turkish public 
opinion of the US.'  Alpogan added that Turkish-American 
relations passed through a tough period at the end of 2004, 
but that ties have been improving since June 2005. 
EU Expects Stronger Turkish Reaction against Iran:  The 
European Union (EU) has been pressing Ankara to adopt a hard- 
line policy against Tehran, complaining that there was no 
change in Turkish statements regarding Iran, despite rising 
tensions among Iran and the international community, Monday 
papers report.  Turkish Foreign Ministry (MFA) sources said 
that Turkey has to preserve the balance, adding that for the 
time being, Ankara is determined to avoid moves aimed at 
increasing the pressure on Iran.  However, Turkey supports 
EU views regarding Iran, and is determined to act parallel 
with the EU in the crisis. 
Talabani Interviews Turkish Daily:  Iraq President Jalal 
Talabani said, in an exclusive interview with the English- 
language daily "The New Anatolian" on Monday, that the Kurds 
were discussing giving the Turkmen autonomy in northern 
regions where they form the majority in the new constitution 
that is being drafted for the Kurdistan region.  Talabani 
repeated that there will be no Kurdish independence, 
especially without the approval of Turkey.  'The Arab 
Shiites have Iran, the Arab Sunnis have the Arab states and 
especially Saudi Arabia.  We only have Turkey,' Talabani 
According to Talabani, the worst terrorists in Iraq belong 
to the Zarqawi group and al-Qaida. 'They regard ordinary 
Muslims as their enemies if they are not fundamentalists. 
They do not regard the Shiites as real Muslims.  They regard 
moderate Sunnis as people who have given up the Islamic 
faith, committing the greatest sin,' he said.  The Iraqi 
president said there are also extremist Sunni Arabs who have 
been driven to violence because they were angered by US 
troops, the Shiite Arabs, the Kurds or even by the 
government.  'A national unity government can solve this 
problem.  The more Sunni Arabs are involved in the political 
process, the more Sunni extremism will die down.'  Talabani 
expects the Sunni insurgency to end in 'about six months.' 
He noted the Americans are talking with the Sunni Arabs to 
bring them back into the political process.  Talabani added 
that the dialogue between the US and the Sunnis has created 
concerns among the Shiite Arabs that Washington will help 
the Sunnis.  'Shiites Arabs are scared that the Sunni Arabs 
will make a comeback,' he said.  Such a comeback is 
impossible, Talabani said, adding that the Shiite majority 
will continue to play a major role in Iraq.  Talabani also 
noted that the Kurds have emerged as a part of the solution 
in Iraq, and not as the problem: 'We have become the uniting 
factor in Iraq.'  Talabani rejects the notion that the 
Shiites in Iraq are really controlled by Iran.  'The Arab 
Shiites say Najaf is the Vatican of the Shiite world while 
the Iranians are trying to promote Qum as the Vatican. 
Iraqi Arabs do not recognize the religious superiority of 
the grand ayatollah in Iran,' he emphasized.  Talabani noted 
that no one, including the radical Shiite leader Muqtada al- 
Sadr, wants the Americans to go.  The Iraqi president said 
the pullout of American troops will only create a civil war 
between the Sunnis and the Shiites. 
Erdogan Attends Davos Meetings:  Addressing the World 
Economic Forum meetings in Davos, Switzerland, Prime 
Minister Erdogan said that Turkey expects five billion USD 
of annual global investment inflow between 2006 and 2007, 
weekend papers report.  Erdogan stressed that Turkey has 
achieved a growth rate of about 20 percent in the past three 
years, becoming the 17th largest economy in the world. 
'Three years ago, Turkey was a country full of corruption, 
particularly in the financial sector.  Today, the financial 
sector in Turkey is among the most profitable, although 
bankrupt banks, taken over by the state, cost Turkey 
approximately 50 billion USD.  For the time being, state and 
private banks are making high profits,' Erdogan said.  The 
AK Party rule in the past three years has transitioned 
Turkey from closed to open society, and from closed to open 
economy, according to Erdogan.  The PM expects Turkey to 
draw 5 billion USD of global capital between 2006 and 2007. 
'Turkey is the last bridge that connects Europe to the East, 
and the East to Europe.  Turkey, a country of opportunities, 
aims to be number one in regional trade,' Erdogan 
Belgian Gendarme Examines Turks Linked to Illegal 
Activities:  Monday "Aksam" claims that the gendarme in 
Belgium, without notifying the government, had secretly 
compiled information about 90,330 Turks linked to organized 
crime and narcotics smuggling.  Belgian lawmakers filed an 
investigation into the secret gendarme operation.  The 
scandal has been hushed up by a committee headed by judge 
Freddy Troch.  Troch is the chief justice of the Belgian 
court in Bruges that will hear the case of Turkish terrorist 
Fehriye Erdal, says "Aksam."  Erdal is wanted in Turkey for 
the assassination of famous Turkish businessman Ozdemir 
Bird Flu Detected in Turkish Cyprus:  A statement issued by 
the European Commission announced that the deadly H5N1 bird 
flu strain was found in poultry samples sent from Turkish 
Cyprus to a laboratory in Britain, Monday papers report. 
The commission declared that the EU will send experts to the 
region to investigate the situation.  Papers speculate that 
the Greek Cypriots may close the Turkish Cypriot border to 
contain the disease.  Meanwhile, Turkish Agriculture 
Minister Mehdi Eker said over the weekend that the EU had 
removed restrictions on the importation of milk and poultry 
from Turkey. 
Pope May Visit Turkey in November:  Sunday papers report a 
Vatican source as saying over the weekend that Pope Benedict 
XVI will probably visit Turkey on November 30 to coincide 
with St. Andrew's Day, though no date has been fixed yet. 
Sunday "Hurriyet" says that Ankara has declined to confirm 
the report.  Ecumenical Patriarch Bartholomew I had invited 
Benedict XVI to attend St. Andrew's Day last November. 
However, the invitation was not matched by Ankara, which 
asked the Pope to come in 2006 instead. 
AKP MPs Cold to Turkey's Strategic Partnership with US:  An 
opinion survey conducted among the ruling AKP lawmakers, 
provincial leaders, and mayors says that 71 percent support 
EU membership and 61 percent support birth control.  Ninety- 
seven percent of the respondents voiced opposition to gay 
marriages, 85 percent to extramarital relations, and 80 
percent to abortion.  Most of the AKP members are cold to 
the idea of a strategic partnership between the US and 
Turkey, according to the survey. 
Bill Gates Pledges to Continue Investment in Turkey: 
Microsoft's Bill Gates, the world computer software giant 
and the world's richest man, pledged to continue investments 
in Turkey.  Gates was received by Prime Minister Tayyip 
Erdogan on Sunday evening in Istanbul.  Erdogan said that 
his government supports the establishment of a 'silicon 
valley' in Turkey.  'We want global companies to choose 
Turkey as their technology base,' Erdogan said.  Gates 
praised Turkey's stance on information technology, saying 
that Turkey was expanding use of the Internet while some 
countries are restricting it.  'We will continue to invest 
in Turkey.  Turkey has a very bright future,' Gates said. 
Gates will attend a meeting with Turkish university students 
in Istanbul on Monday. 
EDITORIAL OPINION:  Palestine/Hamas 
"Understanding Palestine by Looking at Hamas" 
Cengiz Candar commented in the tabloid "Bugun" (1/30): 
"There is concern about whether the peace process will stop, 
following the election victory of Hamas.  The question is, 
was there a genuinely working peace process?  If there was, 
how could we explain the Israeli security wall?  If there 
was, how could we possibly explain the last days of Arafat 
in Ramallah surrounded by Israel?  In sum, what comes around 
goes around for Israel.  Palestine has now started a new 
chapter with newly emerging facts.  Success may take some 
time and may not actually happen in the end.   Yet the 
problem is not only Hamas, it is also Israeli policies, 
which led to the existence of Hamas and created the 
conditions for election victory.  Following the Israeli 
elections, which are scheduled for March 28, we will have an 
Israel without Sharon and a Palestine with Hamas.  Speaking 
in realistic terms, Hamas cannot put down arms without first 
seeing the election results in Israel.  Hamas will try to 
wait and see tangible clues about the elimination of Israeli 
occupation before abandoning its trump card." 
"The Hamas Era in Palestine" 
Yilmaz Oztuna commented in the conservative "Turkiye" 
(1/30):  "The main reason for Al Fath's defeat is its 
involvement in severe corruption.  Al Fath abused billions 
in Arab aid as well as Arafat's heritage.  However both the 
US and Israel recognize Hamas as an Iranian-linked terrorist 
organization, not a political party.  Even if Hamas agrees 
to a coalition with Al Fath, it is still unlikely that 
Israel will recognize the government. Cutting off the 
Iranian link seems impossible for Hamas.  The only 
possibility for Hamas is to give up on terror.  This is 
exactly what Turkey hopes to see happen.  Considering the 
current atmosphere, it is also very likely that violence 
will reoccur in Palestine.  The Shiite movement has gained 
significant ground in Iraq, Lebanon, Syria and Palestine. 
And the movement will try to spread to a broader region. 
All of this means, the tension will get even higher in the 
Middle East." 
"The Lesson and Opportunity with Hamas Victory" 
Washington-based Yasemin Congar wrote in the mainstream 
"Milliyet" (1/30): "Can we take the victory of Hamas, which 
is a violent and radical Islamist organization, as a chance 
for peace?  It may sound way too optimistic, but there are 
some in Washington who believe that the election victory of 
Hamas can be a chance for peace.  First of all, following 
the legitimate election process, there is no other way than 
to accept Hamas' rule.  Both international and regional 
players should concentrate on forcing Hamas to make a choice 
between democracy and terrorism.  The international 
community should persuade the Palestinian people that the 
way toward becoming a state is through the democratic choice 
of Hamas.  The international community should be able to 
form policies in this regard and should also prevent Iran 
and Syria's negative influence on Palestine.  Can this be 
successful in the end?  Is it really possible to see Hamas 
change?  The optimistic ones in Washington believe that it 
is worth trying." 

There is more of that in the following Cablegate cable:

E.O. 12958: N/A 
TAGS: OPRC [Public Relations and Correspondence], 
KMDR [Media Reaction Reporting], 
TU [Turkey], Press Summaries 
FRIDAY, MAY 6, 2005 
--------------------------------------------- ----- 
Kennedy Presses Papadopoulos on Annan Plan - Hurriyet 
PKK Suicide Bomber Caught in Diyarbakir - Milliyet 
Hamas Gets 30 Percent of Vote in Gaza Polls - Sabah 
UN Unanimously Confirms Dervis to Head UNDP - Aksam 
Election Victory a Birthday Gift for Blair - Milliyet 
Vietnamese PM Due in US on First Official Visit - Sabah 
Papadopoulos: Turkish Troop Pullout a Prerequisite on Cyprus 
- Birgun 
Papadopoulos Says Settlement in Cyprus Unlikely Before 
October 3 - Yeni Safak 
Insurgent Attacks Target Security Forces in Baghdad - 
Bulgaria to Pull Out of Iraq Late This Year - Cumhuriyet 
Another Turkish Truck Driver Killed in Iraq - Radikal 
400 Muslim Brotherhood Members Detained in Egypt - Zaman 
Britain Decides to Continue With Blair - Cumhuriyet 
Mysterious Blast at UK Consulate in New York - Cumhuriyet 
Pentagon Expert Blamed for Leaking to Israel Information - 
Erdogan's Upcoming Visit to US:  Mass appeal "Hurriyet" 
reports from Washington that Prime Minister Erdogan's recent 
visit to Israel has enabled the White House to give a `green 
light' for a meeting with President Bush during his upcoming 
trip to the United States.  An unidentified high-level US 
official in Washington said that Erdogan will arrive there 
in late May.  `Prime Minister Erdogan's visit to Israel, and 
his recent speech defending US-Turkish ties have been good 
developments,' the US official said.  The official noted 
that the Turkish government's decision on expanded US access 
to Incirlik Airbase did not fully meet the American request, 
but would still be helpful in making the military operation 
run more smoothly.  Leftist-nationalist "Cumhuriyet" 
reports that President Bush has not yet responded to 
Erdogan's request for a meeting which, "Cumhuriyet" 
believes, is an indication of the `chilliness' in relations 
between the two countries.  The paper reports that the 
Turkish prime ministry has in mind June 26-30 for Erdogan's 
call on President Bush. 
DAS Kennedy Visits Cyprus:  Deputy Assistant Secretary of 
State Laura Kennedy, during a stop in Nicosia as part of her 
current tour of the region, encouraged both sides in Cyprus 
to take forward steps for restarting the UN-backed peace 
talks.  Kennedy urged the Greek Cypriot Administration to 
submit to the UN its proposed changes to the Annan Plan so 
that the talks can be resumed.  She expressed US readiness 
to facilitate an agreement, but stressed that the initiative 
will have to come from the Cypriots themselves rather than 
from outsiders.  Kennedy is to meet on Friday with Turkish 
Cypriot `president' Mehmet Ali Talat in the north of the 
divided island. 
Erdogan-Kocharian to Meet in Warsaw:  Foreign Minister 
Abdullah Gul said that Prime Minister Erdogan may meet with 
Armenian President Kocharian at the upcoming Council of 
Europe meetings in Warsaw.  Erdogan is willing to meet 
Kocharian in Warsaw in an effort to show European leaders 
that he is ready for dialogue with Armenia, "Cumhuriyet" 
comments.  "Vatan" expects Azerbaijani President Ilham 
Aliyev to join Erdogan and Kocharian in Warsaw. 
Gul Visits Bishkek:  Accompanied by lawmakers, businessmen 
and journalists, Foreign Minister Abdullah Gul arrived in 
the Kyrgyz capital of Bishkek Thursday for official 
meetings.  The first batch of humanitarian aid brought by 
the delegation contains 380,000 USD worth of medicines.  The 
Turkish delegation brought to Bishkek 2.5s ton of medical 
supplies and humanitarian aid worth 380,000 USD.  Turkey is 
also planning to send doctors and military experts, reports 
claim.  Gul is to meet with Kyrgyz acting President and 
Prime Minister Kurmanbek Bakiyev and other officials on 
Turkish-Arab Economic Forum:  Syrian Minister for Economy 
and Trade Amir Husni Lutfi said on Thursday that there are 
many opportunities for Turkish businessmen to invest in 
Syria.  Lutfi, in Istanbul to attend the Turkish-Arab 
Economy Forum, voiced Damascus' willingness to join 
international platforms and speed up economic reforms.  He 
said Turkey's membership to the European Union would be in 
the interests of the Arabs as well.  Turkish State Minister 
Kursat Tuzmen told the forum that Turkey had the potential 
to attract some 10 billion USD in Arab capital annually. 
Tuzmen noted that  Turkey has 20 billion USD in annual trade 
with Arab coutnries, a figure that is expected to rise to 25 
billion USD in 2005.  Tuzmen said he expects the number of 
multinational companies investing in Turkey to increase. 
Erdogan Addresses Forum Istanbul 2005:  Prime Minister 
Erdogan told `Forum Istanbul 2005' meetings in Istanbul that 
Europe can overcome the difficulties it faces in global 
competition by admitting Turkey into the European bloc.  He 
said that by 2023, Turkey will be a global power extending 
its influence from Europe to Afghanistan and the Middle 
East.  Erdogan added that Turkey, as a member of European 
Union, will set balances in the region.  The PM claimed that 
Turkey has drawn 45 billion USD in investment through the 
end of 2004.  He also noted that Microsoft's Bill Gates will 
help Turkey in building a `Silicon valley.' 
UN Confirms Dervis for UNDP Post:  The UN General Assembly 
on Thursday confirmed by unanimous vote former Turkish 
finance minister Kemal Dervis as the new head of the UN 
Development Program (UNDP).  Dervis is expected to assume 
office on August 15.  Dervis is the first UNDP chief to come 
from a nation that receives UN development aid. 
Police Detain Alleged PKK Bomber:  Turkish police 
apprehended a woman suicide bomber with alleged ties to the 
outlawed PKK in Turkey's mainly Kurdish city of  Diyarbakir, 
papers report.  The woman was allegedly preparing for an 
attack against police headquarters in Diyarbakir with 1.5 kg 
of C-4 plastic explosives wrapped around her waist.  The 
explosive device was to be detonated using a mobile 
telephone.  In April, the Kurdistan Freedom Hawks -- a group 
thought to be affiliated with the PKK -- claimed 
responsibility for a bomb blast in Turkey's western seaside 
resort of Kusadasi that killed one policeman injured several 
Another Turkish Truck Driver Killed in Iraq:  A Turkish 
truck driver, Salih Gulbol, was killed on Thursday in an 
armed attack near the Iraqi capital, Baghdad.  Gulbol, was 
married with two children, was working for a Kuwaiti 
transportation company in Iraq.  The tabloid "Posta" reports 
that Gulbol's killing brings the total number of Turkish 
drivers and workers killed in Iraq to 90. 
"New Happenings on the Northern Front" 
Sami Kohen wrote in the mainstream-opposition "Milliyet" 
(5/6):  "All hopes that a post-election Iraq would be more 
stable and secure have been dispelled with the latest wave 
of violence.  It is very worrying to see these incidents 
spreading more widely, including into Northern Iraq.  The 
bloody activities of the Army of the Ansar-al-Sunni 
militants, who are closely connected to Al-Qaeda, is proof 
that the insurgents have opened a `second front' in the 
North.  The motivation behind this move was laid out by an 
announcement by Ansar claiming that `the Kurds bowed down to 
the Crusaders and fought against Islam together with the 
Americans.'  Although the new government in Iraq looks like 
a coalition with 37 members, in fact real power is in the 
hands of the Shiites and the Kurds.  Unfortunately, the 
political situation in Iraq is characaterized by chaos, and 
the militants are taking advantage of this.  The growing 
violence in Northern Iraq is a big concern for Turkey as 
well.  The Turkish Foreign Ministry's harsh condemnation of 
the Erbil bombing reflects this concern.  It is a very 
dangerous sign that the violence is spreading northward." 
"Renewing Ties With Israel" 
Erdal Guven commented in the liberal-intellectual "Radikal" 
(5/6):  "PM Erdogan's visit to Israel brought to an end the 
corrosion in the Turkish-Israeli strategic relationship.  If 
only for this reason, the visit carries great importance. 
There are many beneficial results of the visit, but the most 
important one is that Turkey has reestablished stability in 
its Middle East policy.  The needle on the compass been 
pulled back to the center, and away from the Iran-Syria 
angle.  The history of the last 20 years in the Middle East 
shows that Turkey can best defend its national interests by 
keeping plenty of room for maneuver in a complex region. 
This is only possible with stable and rational policies." 
"What Will Change if Ocalan is Retried?" 
Fatih Altayli observed in the mass appeal "Hurriyet" (5/6): 
"There has already been so much reaction to the possibility 
of a retrial of PKK leader Abdullah Ocalan.  The MHP in 
particular have raised the alarm about a possible European 
Human Rights Court decision in the case.  But when Ocalan 
was sentenced to the death penalty, it was the same MHP 
(then in the ruling coaltion) that blocked the 
implementation of a capital sentence.  The European Court 
would not be singling out Turkey if this is its decision. 
The court also demanded, for example, that the French retry 
the famous terrorist Carlos `the Jackal.'  Retrying Ocalan 
doesn't mean he will be freed.  If it becomes necessary, 
Ocalan could be retried and sentenced to his appropriate 
punishment.  The whole issue would then be behind us for 
good.  If certain circles ever ask for more on the issue, 
then the Turkish Government would be well within its rights 
to tell them to `get lost.'  Presenting Ocalan's retrial as 
tantamount to freeing him, and trying to use such cheap 
policies to score political points will not be to Turkey's 


E.O. 12958: N/A 
TAGS: ECON [Economic Conditions], PREL [External Political Relations],
SR [Serbia], MW [Montenegro], KIPR [Intellectual Property Rights], 
Economic Development 
REF: A) STATE 14937        B) BELGRADE 8 
     C) 05 BELGRADE 741    D) 05 BELGRADE 643 
E) 05 BELGRADE 403 
¶1. (SBU) While generally agreeing with the description of IPR 
problems contained in the IIPA Special 301 submission, we do 
not recommend that Serbia and Montenegro be placed on the 
Watch List.  The IPR environment in Serbia and Montenegro 
(SAM), although not yet satisfactory, is certainly moving in 
the right direction.  As noted in Reftel B, significant 
progress was made on the IPR Action Plan agreed upon by the 
State Union and republic-level governments in April 2005.  We 
continue to see encouraging actions on the part of both 
republics, as well as indications that further progress is 
within reach.  Recent meetings with officials in both 
republics indicate that there is a readiness to discuss 
another action plan to finish the legislative framework, 
bolster enforcement efforts and cooperate with the private 
sector in an anti-piracy campaign.  Placing Serbia and 
Montenegro on the Watch List after all of the progress made 
on the IPR Action Plan (Reftel B) would risk undercutting the 
political will for more progress.  The Ambassador will be 
holding senior-level consultations with government leaders in 
coming days to test for receptiveness for real progress on 
IPR issues.  END SUMMARY. 
¶2. (SBU) The IPR environment in Serbia and Montenegro (SAM) 
is not yet where it needs to be to protect U.S. interests. 
We generally agree with the description of IPR problems 
contained in the International Intellectual Property Alliance 
(IIPA) submission for the 2006 Special 301 review, although 
some issues may be somewhat overstated. 
¶3. (SBU) However, the momentum is in the right direction.  We 
see encouraging will and actions on the part of several 
ministers and agencies responsible for different aspects of 
IPR protection toward making necessary improvements.  These 
ministers have a fairly good track record of delivering on 
commitments.  Reftel B is a thorough assessment of the SAM's 
progress on last year's action plan and illustrates that both 
the State Union and republic-level governments have shown 
commitment to strengthening the IPR environment.  By our 
assessment, of the eight target areas identified in the 
action plan, we have seen substantial progress in five areas. 
¶4. (U) Concerning the creation of an effective mechanism for 
cross-checking applications to drug agencies for approval of 
generic drugs with pharmaceutical patents already registered 
(typically, by the research-oriented companies), no action 
was taken by the State Union.  However, this issue was raised 
in recent EU Stabilization and Association Agreement (SAA) 
talks with SAM, and it was determined that this was not 
feasible due to the complexity of the patents.  The EU does 
not have such a cross-checking mechanism, and the U.S. Food 
and Drug Administration (FDA) cross-checks for trademarks but 
not patents. 
¶5. (SBU) The draft Law on Special Rights for the Efficient 
Protection of Intellectual Property was not enacted in Serbia 
in 2005.  However, it has been adopted by the government and 
will be on the Parliament's agenda when it reconvenes in 
March or April.  This will be an important enforcement tool, 
since it will make legal entities (companies) culpable for 
IPR violations and provides for fines up to CSD 3 million 
(approximately USD 41,000).  Minister of International 
Economic Relations Milan Parivodic told econoffs on February 
13 that he would offer his assistance in making sure the law 
was placed in a fast-track procedure on Parliament's agenda. 
¶6. (U) Optical disc laws for Serbia and for Montenegro were 
drafted but not passed in 2005.  In Montenegro, the draft Law 
on Optical Disks was delivered by the Ministry for Foreign 
Economic Relations to the Ministry of Culture in late 2005. 
The bill is expected to be adopted by the Government soon, 
possibly by the end of February and no later than the end of 
March 2006, and subsequently enacted by Parliament.  The law 
will regulate the production of optical disks, require the 
registration of the business activity of reproducing optical 
disks for commercial purposes, and provide for surveillance 
of optical disk imports and exports as well as imports and 
exports of polycarbonates and production equipment for the 
production of optical disks. 
¶7. (SBU) In Serbia, Minister Parivodic agreed on February 17 
for his Ministry to be responsible for government adoption 
and passage of the Law on Optical Disks.  Special 301 
considerations and WTO accession talks have prompted the 
Ministry of International Economic Relations to be actively 
engaged in strengthening the IPR environment in Serbia. 
¶8. (U) Amendments to the Montenegrin Penal Code were provided 
by the Ministry for Foreign Economic Relations to the 
Ministry of Justice in late 2005.  The amendments provide for 
ex officio prosecution of IPR infringements, specify all acts 
that constitute an IPR-related related offence, and increase 
the penalties for conviction of IPR infringements.  The bill 
is expected to be adopted by the Government by the end of 
March 2006, and subsequently enacted by Parliament. 
--------------------------------------------- -------------- 
¶9. (U) On January 1, 2006, the Government of Montenegro (GoM) 
began active enforcement of its law regulating protection of 
intellectual property rights, starting with a public notice 
that such actions would commence.  In the first month, 
inspectors surveyed 82 retail and wholesale locations. Forty 
closed, apparently to avoid inspection.  In other cases, 
merchants who had previously carried pirated goods had 
disposed of such stock prior to inspection.  In 29 locations, 
inspectors reported trade in goods with no origin 
("pirated"), and consequently seized over 6,700 DVD, CDs, 
tapes, and records.  Inspectors have requested prosecution of 
13 cases and assessed mandatory fines in seven other cases. 
¶10. (SBU) A local legitimate film distributor in Belgrade 
told econoff on Feb 10 that Montenegro's enforcement efforts 
are showing immediate dividends.  Between November 1 and 
December 15, 2005, Millennium Film and Video sold 148 DVDs 
(approx. EUR 2,092) to two clubs in Podgorica.  Sales 
increased five times between December 16 and February 10, 
2006, to 749 DVDs (approx. EUR 10,506) to nine clubs in 
Podgorica.  He attributes this success to the effective 
enforcement and PR activities of the Montenegrin government. 
¶11. (U) On February 1, 2006, Montenegrin Prime Minister Milo 
Djukanovic together with Bill Gates signed a three-year 
contract, providing software licenses to Montenegrin 
educational and scientific institutions.  In September 2005, 
the GoM and Microsoft concluded a USD 2.36 million contract, 
creating a strategic partnership between the GoM and 
Microsoft for legalization of all the Microsoft software 
being used by state institutions.  By mid-March, Microsoft 
and local governments in Montenegro will have completed the 
licensing of software used by the municipalities. 
¶12. (U) In January 2006, Microsoft's local business partner 
introduced a public campaign of flyers and billboards, "Stop 
Piracy," advising that licensing current software is "as easy 
as 1, 2, 3: Count PCs, Order License, Done." 
¶13. (U) In addition to the steps under the agreed Action 
Plan, Montenegro's first society of composers and artists was 
registered on January 9, 2006.  Registration will allow for 
the collection and distribution of royalties for use of 
protected works. 
¶14. (U) Compared to Montenegro's status a year ago (Reftel 
E), it has made significant although not complete progress 
towards our agreed goals in protecting intellectual property. 
Government action has proceeded at an acceptable pace.  Final 
passage of the Law on Optical Discs and amendments to the 
Penal Code by Parliament may be delayed, as political 
attention is consumed by the central question of possible 
independence of Montenegro from Serbia, which will likely be 
decided by referendum in the second quarter of 2006. 
¶15. (U) As mentioned in the IIPA submission, enforcement 
improved in Serbia in 2005.  Through numerous discussions 
with the Business Software Alliance, they expressed 
satisfaction with police efforts to raid facilities and 
arrest street vendors.  The number of guilty verdicts 
rendered, though small, was a significant improvement from 
¶16. (U) However, subsequent press releases, touting the 
success of these enforcement activities, were not 
forthcoming.  The private sector was frustrated with the 
unwillingness of ministries to permit the use of the results 
in an effective anti-piracy campaign. 
¶17. (U) The Embassy participates in the AmCham IPR Working 
Group that consists of representatives from the various 
stakeholder industries.  One of the main recommendations of 
the group is for the government to appoint an agency and 
spokesperson to cooperate with the private sector in its 
anti-piracy campaign.  Such a partnership between the 
government of Serbia and the private sector would deliver a 
clear message to the public that piracy will not be tolerated 
in Serbia. 
--------------------------------------------- ----- 
¶19. (U) Discussions with representatives from the 
pharmaceutical industry indicate that there have been 
improvements in the area of data exclusivity.  On November 1, 
2005, a new Regulation on the Licensing of Medicinal Products 
went into force which provides for the protection of clinical 
data in the licensing application process.  Therefore, 
generic companies cannot use clinical data from research- 
oriented pharmaceutical companies for up to six years for 
original products and up to 10 years for high tech products. 
This regulation was welcomed by the industry, and we were 
told that a generic license application was already denied 
due to usage of protected clinical data. 
¶20. (SBU) As a part of the WTO accession talks, Serbia has 
agreed to begin drafting a law for the protection of 
undisclosed trade secrets.  According to Article 39 of TRIPS, 
members must ensure effective protection against unfair 
competition by establishing a regime which protects 
undisclosed trade secrets from unfair commercial use. 
¶21. (U) Serbia could benefit from further training in the 
inspectorates (market and tourist) under the auspices of the 
Ministry of Trade. A precondition for this training would the 
passage of the Enforcement Law, which will provide powers for 
them.  Both the Serbian Customs Administration and the 
Montenegrin Customs Administration with its line inspectors 
could benefit from additional training in how to detect and 
intercept export and especially import of counterfeit goods. 
¶22. (U) Based on input from the AmCham IPR working group, we 
have drafted a proposed action plan for 2006.  We see five 
key action items that would further improve IPR protection 
and address U.S. industry concerns: 
- Ensure "fast-track" approval of new IPR Enforcement Law in 
Serbia that will provide powers for market inspection, tax 
inspectors and police to act whenever pirated or counterfeit 
goods are found and make companies liable for criminal 
- Tax inspectors and police should have powers to act ex 
officio in search for non-licensed software and other IPR 
infringements during their regular controls, whether through 
effective enforcement of the current Law on Tax 
Administration or through an amendment to the IPR Enforcement 
- In both Serbia and Montenegro prepare, approve and fast- 
track in the parliamentary procedure the Law on Optical 
Discs, in order to regulate commercial production and 
duplication of optical discs, which is the medium commonly 
used to infringe IPR. 
- Appoint a government agency and spokesperson with the task 
of cooperating with the private sector to effectively promote 
the enforcement activities of the government by releasing 
statistics of raids conducted, optical discs seized, etc. 
- Passage of the amendments to the Penal Code in Montenegro 
that will provide full criminal protection of IPRs. 
¶23. (SBU) Some government officials have been receptive to 
these action items in recent meetings, and we will urge the 
GOS and GOM to move forward.  Our approach is to secure an 
agreed, time-bound, action plan for addressing these issues 
as a work program for 2006.  The Ambassador will be 
conducting meetings with senior officials in Belgrade in the 
coming days to test their receptiveness to implementing these 
measures.  We will continue to provide targeted assistance to 
help the governments fulfill this action plan and to build 
institutional capacity to combat and prosecute piracy. 
¶24. (SBU) The Special 301 process is a useful tool to advance 
our interests with respect to IPR protection.  The IPR 
environment in SAM is not currently satisfactory, but it is 
steadily improving.  The key question here is whether putting 
SAM on the Watch List would prompt stronger government action 
and bring us closer to our goals.  However, the history of 
our bilateral relations since the Milosevic period suggests 
that putting SAM on the Watch List will be viewed as a 
"sanction," no matter how we characterize it.  Such a step 
would also come during a time of political uncertainty 
regarding the Montenegrin referendum for independence as well 
as negotiations on the final status of Kosovo (and, possibly, 
suspension of assistance for lack of ICTY cooperation). 
¶25. (SBU) Both the State Union and republic-level governments 
of Serbia and Montenegro took seriously our warning in 2005 
that it risked placement on the Special 301 Watch List, and 
the result has been effective actions to remedy shortfalls in 
IPR protection.  However, we fear that placing SaM on the 
watch list now, when the two governments are focused on 
staying off the list to provide a contrast to other 
neighboring countries, like Bulgaria and Croatia, would 
backfire.  We are hoping for further progress on the basis of 
our recent proposal a new action plan.  To avoid any slowing 
of the momentum that has been generated, we recommend against 
placing the Serbia and Montenegro on the Watch List. 

More in the following:

DE RUEHBW #0321/01 0610716
R 020716Z MAR 06

E.O. 12958: N/A 
TAGS: ECON [Economic Conditions], EFIN [Financial and Monetary Affairs], 
KPAO [Public Affairs Office], ETRD [Foreign Trade], EINV [Foreign Investments], 
EAID [Foreign Economic Assistance], PGOV [Internal Governmental Affairs],
MW [Montenegro], SR [Serbia] 
-- Five Percent GDP Growth Predicted 
-- Funding for Entrepreneurs 
-- Sixth Internet Provider 
-- Banks Report 2005 Profits 
-- Microsoft Engages in Montenegro 
-- Niksic Steelworks 
-- GoM Agrees 2006 Privatization Plan 
-- Unemployment Steady 
-- Pensions Increased 
Five Percent GDP Growth Predicted 
¶1. (U) The Institute for International Economic Studies 
(WIIW) in Vienna projects the GDP growth in Montenegro will 
reach 5.0 percent.  GDP growth was 4.0 percent in 2004 and 
3.7 percent in 2005. WIIW expects unemployment to plateau 
at the current level, and inflation to rise slightly to 3.0 
percent from 2.5 percent in 2005. 
Funding for Entrepreneurs 
¶2. (U) The GoM announced it will provide Euros 11.2 million 
in credits to support the growth and development of small 
and medium enterprises (SMEs).  The GoM is looking for SME 
growth to cut the unemployment rate, and will tie the 
loans, with favorable interest rates and repayment terms, 
to job creation. Projects in less developed regions will 
enjoy even more favorable terms. 
Sixth Internet Provider 
¶3. (U) VIP Broadband Montenegro, a UK-Netherlands- 
Montenegro firm, will become Montenegro's sixth Internet 
provider (ISP), and the second to focus on broadband. 
Banks Report 2005 Profits 
¶4. (U) The ten leading banks in Montenegro combined for a 
profit of Euros 4 million in 2005, after losing Euros 1.1 
million in 2004.  Of the ten, only one lost money: 
Hypothecate Bank, which while still plagued by management 
problems, lost only Euros 2 million in 2005 compared to 
2004 losses of Euros 7.3 million.  Opportunity Bank, 
initially established in 2002 with support from USAID to 
focus on microenterprises, and whose majority shareholder 
is a U.S. NGO, reported profits of Euros 1.4 million. 
Microsoft Engages in Montenegro 
¶5. (U) Microsoft is working with the GoM and with private 
business to increase the use of licensed software in 
Montenegro.  After meeting with PM Djukanovic, Bill Gates 
announced Microsoft would provide software on favorable 
terms to Montenegro's educational and scientific sector. In 
the private sector, Microsoft will team with NGO Montenegro 
Business Alliance to educate business about intellectual 
property rights. 
Niksic Steelworks 
¶6. (U) The preliminary GoM auditor's report on Midland 
Resources management of Niksic Steel evinces Midland's 
contractual failures, media reported.  Midland, a UK- 
offshore firm with Russian capital, privatized Niksic Steel 
in 2004, with the obligation to make significant 
obligations. The auditor's report says that when Midland 
walked away in November 2005, it left a debt of more than 
Euros 2.6 million to Montenegro. Deputy PM Gvozdenovic 
promised that the GoM would get Midland to pay all arrears, 
by agreement or by lawsuit. 
GoM Agrees 2006 Privatization Plan 
¶7. (U) With about 80 percent of Montenegro's state-owned 
BELGRADE 00000321  002 OF 002 
industries now privatized, the GoM announced its 
privatization plan for 2006.  The first companies on the 
list are generally smaller industries with niche (or 
sometimes non-existent) markets, without prominent firms 
like KAP or Telekom CG, both privatized in 2005. 
Privatization strategies will be developed for Electric 
Power of Montenegro (EPCG), the Port of Bar, Plantaze 
Vinyards, Montenegro Airports (with facilities in Podgorica 
and on the coast at Tivat), and Montenegro Airlines, as 
well as a renewed effort to privatize the Niksic 
Steelworks.  Tenders for the latter companies will probably 
not be published before the end of 2006. 
Unemployment Steady 
¶8. (U) The GoM said unemployment was steady at 18.4 
percent.  Labor Ministry officials said that the real 
unemployment, calculated by international standards, was 
between 12 and 15 percent. 
Pensions Increased 
¶9. (U) Pensions in Montenegro for the first half of 2006 
will be increased by 6.36 percent as compared to December 
2005.  The first significant increase in pensions in 
several years will raise average pensions to Euros 137 per 
month (low: Euros 50, high Euros 571). 
¶10. (U) Two auctions of Treasury bills, with a total face 
value of EUR 2.2 million, was held in January (note: data 
lags by one month). The average weighted annualized 
interest rate for the auction held in January amounted to 
0.59 percent.  The lowest accepted interest rate at the 
auctions held in December was 0.49 percent while the 
highest accepted interest rate was 0.69 percent. 
Participants at the auctions included local banks. 
¶11. (U) The NEX20 index of the Nex Montenegro Stock 
Exchange ended the month of February at 10,251.87, down 
2.02 percent. The Moste index of Montenegroberza declined 
1.6 percent to 480.786 in February. Major components of the 
NEX20 include the privatized Telekom CG and Jugopetrol; 
major components of the Moste include publicly traded 
shares of aluminum smelter KAP and vineyard Plantaze. Note: 
The Montenegrin exchanges are still nascent, and the level 
of capitalization represented is small although rising (NEX 
capitalization at the end of 2004 was Euros 495 million; at 
the end of November 2005 it was Euros 1,410 million). 

And on we move to Jakarta:

DE RUEHJA #2531/01 0551044
P 241044Z FEB 06

E.O. 12598: N/A 
TAGS: ETRD [Foreign Trade], KIPR [Intellectual Property Rights],
PGOV [Internal Governmental Affairs], ID [Indonesia] 
REF: A) State 14937;  B) 05 Jakarta 16289 
¶1.  (SBU) Summary:  Local IPR industry representatives now 
tell us that the IPR enforcement landscape has changed 
considerably since they made their Special 310 out-of-cycle 
review (OCR) submissions in December 2005.  They now see a 
more credible and sustained enforcement effort backed up by 
signals of high-level political will, including President 
Yudhoyono's personal involvement in a MOU with Microsoft to 
legalize government software and Police Chief Sutanto's 
strong directive against piracy.  There is clear evidence 
the U.S. decision to maintain Indonesia on the priority 
watch list (PWL) during the recent out of cycle review has 
demoralized key IPR officials at the Ministries of Trade and 
Justice.  We urge Washington agencies to upgrade Indonesia 
to Watch List status during the 2006 regular Special 301 
review.  End Summary. 
Enforcement Actions 
¶2. (SBU) In early January, Indonesia's new and no-nonsense 
National Police Chief General Sutanto issued a directive to 
all of Indonesia's 33 regional police chiefs instructing 
them to step-up enforcement activities in all areas 
pertaining to optical disc piracy, including retail sales 
and factory production. The result has been a dramatic 
increase in police raids across the country, and 
particularly in major urban centers.  In Jakarta, the 
metropolitan police, working closely with the local Motion 
Pictures Association (MPA) representative, made good on 
their promise to conduct regular monthly raids following the 
successful November 2005 raids against some of Jakarta's 
most notorious malls (Ratu Plaza, Mangga Dua and Harko 
Glodok).  Since November, they have conducted repeat raids 
at those same centers as well as new raids in other areas. 
In February 2006, they raided 65 shops and, with 
contributions from earlier raids, have collected over 6 tons 
of pirated optical discs that now await destruction at an 
appropriate high-level event.  A local Business Software 
Alliance (BSA) representative claims that overall piracy is 
down by as much as 10 percent in Jakarta and 50 percent in 
¶3. (SBU) The police have also conducted recent factory 
raids.  On February 9 and 10, with MPA support, police 
raided 2 factories in Tanggerang where they seized three CD 
and four DVD production lines and roughly 18,000 pirated 
optical discs.  The local MPA representative says his 
organization and the police plan to raid an additional 8 
malls and a major factory by the end of March.  According to 
the MPA representative, the police said that following 
General Sutanto's directive, they no longer require MPA 
support (usually for transportation and meals) to organize 
and conduct raids.  Sutanto has now turned his attention 
towards creating an anti-piracy film in collaboration with a 
local recording industry association and Indonesia Customs. 
¶4. (SBU) On a February 22 visit to Jakarta, a Singapore MPA 
representative told us the recent GOI actions on IPR are 
"the most remarkable developments in the past six years." 
He also expressed concern that the recent decision to keep 
Indonesia on the PWL had been based on dated information 
that does not accurately reflect what he described as a new, 
credible and sustained enforcement campaign, supported by 
political will from the very top.  He also expressed fear 
that the OCR decision would dampen current momentum, and 
said he would recommend to MPA and the IIPA that they revise 
earlier recommendations and support upgrading Indonesia to 
Watch List during the upcoming regular Special 301 review. 
Local BSA and IFPI reps say they support this view and will 
also press for an upgrade to the Watch List. 
Optical Disc Regulations (ODR) 
¶5. (SBU) Local IPR industry reps tell us they now believe 
that the list of roughly 22 optical disc factories in the 
GOI's database accounts for most of the factories known to 
exist.  They note that earlier estimates of as many as 50-60 
factories were based largely on rough estimates, and some 
suspected factories may have closed or moved.  The 
interagency ODR monitoring team continues to build capacity 
through its participation in USAID funded trainings and 
awareness campaigns.  It is also making steady progress 
towards registering factories (17 of 22 are now registered), 
supplying SID codes (the 17 registered factories now have 
JAKARTA 00002531  002 OF 003 
SID codes), and conducting regular inspections.  The 
monitoring group's head, Tony Tanduk, recently told us that 
his team is having better success in entering factories with 
greater police support following General Sutanto's 
directive.  Still, the monitoring team consists of an ad hoc 
group of officials who take time-off from other 
responsibilities to work on ODR implementation and rely 
heavily on industry support.  Moving forward, it will be 
important to encourage the GOI to provide the team with a 
regular budget and staff. 
Arrests, Prosecutions and Convictions 
¶6. (SBU) In early February, Jakarta courts convicted six 
pirate software vendors to jail terms of roughly 1 year 
each.  Police raids on vendors in February alone resulted in 
some 50 arrests, and police netted another 17 during the 
recent factory raids, including one major distributor.  MPA 
estimates that the Attorney General's Office now has some 
220 IPR cases pending.  In general, prosecutions and 
convictions still remain weak, a reflection of the very low 
capacity of Indonesia's judicial system.  MPA tells us that, 
with the police now making more concerted efforts, the next 
focus of effort should be on the Attorney General's Office, 
which is responsible for prosecuting IPR cases. 
Other Developments 
¶7. (SBU) On January 13, the Ministry of Information and 
Communications Technology and Microsoft signed an MOU on 
legalizing all GOI Microsoft software.  President Yudhoyono, 
on his own initiative, personally led the effort to sign the 
MOU, following his 2005 meeting with Microsoft Chairman Bill 
Gates.  It is estimated that 90 percent of GOI computers use 
pirated versions of Microsoft operating systems and 
¶8. (SBU) A Presidential Decree to establish a National Task 
Force is finalized and still awaits President Yudhoyono's 
signature.  Bureaucracy, higher priorities, and a logjam of 
pending Presidential decisions seem to be the main 
impediments to its passage.  While the Task Force should 
facilitate greater interagency cooperation, strong signals 
from the top, such as the Microsoft MOU and Sutanto's 
directive, are equally important.  The regional MPA 
representative recently told us that the Task Force was not 
the highest priority, and credible enforcement and 
reductions in the availability of pirated products was more 
¶9. (SBU) Finally, as reported in ref b, we continue to hear 
reports from a number of IPR attorneys that Indonesia's 
Commercial Court continues to perform well on a healthy 
volume of civil IPR cases (mostly related to trademark 
disputes).  Again, we should consider this a significant 
achievement given the overall weak state of Indonesia's 
Comment and Recommendation 
¶10. (SBU) The IPR enforcement landscape has changed since we 
transmitted Ref B and engaged the GOI in a digital video 
conference on January 17.  Industry representatives, who a 
few months back doubted the motives behind raids, now see a 
more credible and sustained effort and positive momentum. 
Enforcement has been the weak link in Indonesia's IPR 
efforts for years, and coupled with other positive 
developments, we continue to believe there is ample progress 
to warrant an upgrade to Watch List status. 
¶11. (SBU) From a longer-term perspective, the last two 
Indonesian administrations have made unmistakable progress 
on OD piracy issues since USTR placed it the PWL in May 
--Parliament passed a strengthened Copyright Law in July 
2002 that went into force in July 2003. 
--Former President Megawati Sukarnoputri signed a Government 
Regulation on Optical Discs in October 2004.  In terms of 
legal hierarchy, Government Regulations are the highest form 
of GOI regulation commonly used. 
--The former Minister of Trade and Industry issued 
JAKARTA 00002531  003 OF 003 
complementing Ministerial Regulations on optical discs, also 
in October 2004. 
--With assistance from the U.S., the Ministry of Industry 
formed and trained OD monitoring teams in 2005.  Although 
there is room for more progress, these teams have registered 
more than three quarters of the OD factories known to exist 
in Indonesia, and are actively enforcing the ODRs. 
--As noted above, the National Police Chief issued a 
directive in January 2006 to Indonesia's 33 regional police 
chiefs instructing them to step-up enforcement activities in 
all areas pertaining to optical disc piracy. 
--Also as noted above, police in Jakarta and other major 
Indonesian cities have dramatically increased the number of 
raids against OD vendors and factories since November 2005. 
¶12.  (SBU) Although they would admit that Indonesia still 
has a way to go, Indonesian IPR officials believe adamantly 
that they have made impressive progress over the last few 
years towards improving Indonesia's IPR climate, and we 
agree.  In particular, the IPR enforcement progress over the 
past four months has come in the face of competing law 
enforcement priorities and financial and political 
opposition from illegal OD producers and vendors.  For these 
reasons, the recent USG decision to retain Indonesia on the 
PWL stunned and demoralized our GOI IPR contacts.  Several 
of our close GOI interlocutors have told us flatly that 
"they feel like giving up" following the OCR decision.  The 
Ministry of Justice Director General for IPR, upon hearing 
of our decision, cancelled his planned February 16 meeting 
with USTR Director for Southeast Asia David Katz.  We are 
frankly concerned that the downturn in our IPR relationship 
could reduce the effectiveness of the USG-funded senior IPR 
technical advisors we are placing with the ODR monitoring 
team and police. 
¶13. (SBU) The bottom line is that the proponents of IPR 
protection within the GOI and Indonesian society are a small 
and embattled group, and they face off daily against many 
strong enemies and competing law enforcement priorities.  As 
we argued in Ref B, one of the most effective ways we can 
support this group is by upgrading Indonesia to Watch List 
status, and we believe this remains our most effective 
policy choice moving forward. 

Finally, there is Slovakia:

E.O. 12958: N/A 
TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], 
ECON [Economic Conditions], XG [Europe], LO [Slovakia], IPR 
REF: STATE 43420 
¶1.  Summary:  Slovakia has enacted nearly all of the 
intellectual property legislation required by TRIPS, and the 
overall IPR situation has improved from a historical 
perspective.  However, a lack of IPR protection for 
pharmaceuticals caused Slovakia to be placed on the Special 
301 Watch List in each of the past three years and there is 
little evidence that the situation has improved adequately. 
Problems related to general patent protection, especially 
data exclusivity, continue to be an issue because it is 
unclear which department of the GOS has responsibility. 
Piracy of optical and other visual medias remains minimal, 
but home "burning" of CD's has likely increased.  The 
Ministry of Interior (MOI) and the police have an 
independent office dedicated to computer-related crime. 
Although GOS offices and large companies predominantly use 
licensed software, experts say entrepreneurs and small- and 
medium-size enterprises continue to use pirated software. 
The sale of counterfeit trademarked goods is minimal.  Due 
to problems in the pharmaceutical area we recommend that 
Slovakia remain on the Watch List unless the GOS moves 
aggressively to address these issues before the 301 
decisions must be made.  End summary. 
¶2.  The Patent Law, the Commercial Code, the Law on 
Trademarks, the Law on Inventions, Industrial Design and 
Rationalization, the Law on Protection of Appellations of 
Origin of Products, and the Copyright Act, all implement 
Slovakia's TRIPS obligations.  The Civil and Penal Codes 
implement obligations with regard to enforcement.  TRIPS has 
been valid in Slovakia since 1995, but industry sources 
report that implementation and enforcement, despite some 
improvement, still remain problematic. 
¶3.  Slovak law remains problematic because it fails to 
harmonize data exclusivity with market authorization, and 
this raises potential conflicts with the country's WTO 
obligations.  Data exclusivity is drastically weakened 
because the GOS recognizes the date of first marketing 
authorization in any EU country as the start of the six-year 
period of protection in Slovakia, but does not accept the 
corresponding EU marketing authorization.  Since Slovak 
marketing authorization often takes two or three years 
longer than its EU equivalent, the six-year period of data 
exclusivity protection is drastically reduced.  In an effort 
to placate disgruntled industry members, in 2002 the GOS 
passed a law offering a 10-year period of data exclusivity 
for "high technology" drugs.  However, in 2003 the GOS 
returned to a six-year period of protection. 
¶4.  Foreign pharmaceutical manufacturers continue to 
complain that the GOS allows competitors to sell drugs that 
are protected by valid patents.  Reportedly, the GOS has 
told the patent holders to sue the infringing companies 
directly, rather than getting involved itself or denying the 
guilty companies legal approval to sell the disputed drugs 
in the first place.  Industry sources complain that Slovak 
legislation is unclear and that GOS officials do not 
understand who has responsibility for enforcement of various 
laws, or even that patents are held on certain drugs. 
Currently, at least one foreign pharmaceutical 
manufacturer's infringement case is caught between two GOS 
offices that each say the other is responsible for the 
¶5.  In 2002, Slovakia became a member of the EPO, acceding 
to all of the appropriate regulations, including the 
Convention on the Grant of European Patents and the Protocol 
on Centralization of the European Patent System.  According 
to Lubos Knoth at the Slovak Industrial Property Office 
(SIPO), Slovakia now provides European patents with the same 
level of protection as they enjoy in other EPO members. 
Moreover, licensed Slovak attorneys can now represent their 
customers in the EPO. 
¶6.  According to the Slovak Anti-Piracy Union (SAPU), the 
problem of video piracy has decreased significantly since 
2002.  The practice of video rental shops buying one legal 
copy of a video and then making several pirated copies, as 
well as the presence of pirated videos at flea markets, is 
now rare.  On the other hand, counterfeited DVD's, primarily 
of Ukrainian and Russian origin, have started to become more 
common. Efforts by the police, tax authorities and customs 
officers to monitor this situation have been commendable. 
According to a SAPU official, in 2003 up to 1,000 DVDs were 
seized and five or six individuals were arrested and put on 
probation for a period of 2 years.  Generally, Slovakia is a 
transit-and-target country rather than a producing nation, 
as it has no visual media pressing plants.  However, Sky 
Media, a Swiss company reportedly with Russian interests, 
plans to open Europe's largest CD-rom and DVD production 
facility in Slovakia later this year. 
¶7.  Although some progress has occurred in the area of music 
media, further improvement is essential. According to 
Slavomir Olsovsky from the International Federation of the 
Phonographic Industries (IFPI), legislation has been to a 
large extent harmonized, but enforcement is still lacking 
because of the insufficient skills and experience of police 
and customs officers.  A flea market in Eastern Slovakia's 
largest city, Kosice, was recently the site of a major 
police action, during which dozens of music CDs and other 
goods were confiscated, and forty people were arrested for 
selling illegal merchandise.  The number of home 
manufactured, or so-called "burned" CD's has likely climbed 
significantly due to the increasing penetration of personal 
computer copiers.  There are no industrial facilities to 
press pirated and/or counterfeited CD's in the country. 
¶8.  Computer programs are protected as literary works, 
according to Section 7(1)a of the Copyright Act.  Use of 
unlicensed computer programs is a crime, which carries a 
sentence of up to five years in prison or a financial 
penalty. Since 2001, the Slovak Police Presidium has 
operated a special independent office dedicated to computer- 
related crime.  Generally, Slovakia is a consumer of pirated 
software but not a significant producer, and most of the 
pirated goods come from Ukraine, Russia and Poland. 
Problems persist regarding Slovakia's personal computer 
gaming clubs, which continue to violate computer licensing 
laws.  In 2003, Slovak police conducted raids at 12 Internet 
cafes in the city of Nitra, seizing 116 personal computers 
that contained illegal software. 
¶9.  According to industry experts, software piracy has 
noticeably decreased in Slovakia.  Microsoft's Bill Gates 
said during his visit to the country in January 2004, "We 
have registered a decline in software piracy in Slovakia." 
Based on the Microsoft's Enterprise Agreement with the GOS 
signed in 2002, all copyrights of Microsoft software being 
used in the state administration have been purchased by 
Slovak authorities for a total of USD 13 million 
(representing a 65 percent discount on the regular price). 
In 2001, a similar agreement was signed between Microsoft 
and the Slovak Chamber of Physicians and in 2004, Slovakia 
joined Microsoft's worldwide project "Partners in 
¶10.  In October 2003, the Slovak branch of the U.S. based 
Business Software Alliance (BSA) launched a nationwide 
campaign to fight illegal software.  Together with the 
police, the BSA sent out 100,000 letters to entrepreneurs 
reminding them that the use of unlicensed products was 
against the law.  Ads on local radio stations relayed the 
same message.  The International Planning and Research 
Corporation assigned Slovakia a piracy rate of 45 percent 
for 2002, the second lowest figure in the region, down from 
66 percent in 1994.  A 2003 study by BSA and the IDC Company 
suggested that if Slovakia reduced its software piracy rate 
by 10 percentage points, its IT sector could grow to nearly 
USD 1 billion annually by 2006, from USD 545 million in 
¶11.  Trips obligations on trademarks, bringing Slovakia into 
conformation with EU legislation, came into effect in 2002. 
In addition, Slovakia passed a law on customs measures 
regarding the import and export of illegal and counterfeit 
goods to comply with TRIPS articles dealing with customs and 
border control.  However, implementation is weak along the 
Ukrainian border, which is considered by experts to be an 
easy target for pirates. 
¶12.  An amendment to the Act on Trademarks came in effect on 
February 1, 2004, granting European "community" trademarks 
validity in Slovakia after its accession to the EU on May 1, 
2004.  Existing community trademarks will automatically be 
valid in the enlarged EU.  While the holders of existing 
national or international trademarks of similar appearance 
may not contest this automatic extension of existing 
community trademarks, they can protect their rights by 
applying for a ban on the use of existing similar community 
trademarks in Slovakia if their trademark was previously 
registered. In addition, commencing November 1, 2003, 
trademark holders can file objections to new applications 
for the registration of community trademarks of similar 
¶13.  According to sources, illegal use of trademarks is not 
perceived to be a significant problem in Slovakia.  The 
Customs Code makes it possible for Slovak Customs to seize 
counterfeited goods.  (NOTE: Previously, this authority was 
granted only to the trademark owner himself).  However, both 
customs and police are still not sufficiently trained 
regarding which trademarks are licensed in Slovakia. 
¶14. Protection of industrial designs by the 2002 Act on 
Designs, conforms to EU standards.  After accession to the 
EU, the protection afforded designs in existing member 
states will automatically apply in Slovakia, just as Slovak 
businesses will be able to take advantage of the same 
protection for their designs in the enlarged EU. 
¶15.  In the area of designation of origin, Slovak 
legislation (Act. 466/2003) conforms to Council Regulation 
(EC) No. 535/97 on the protection of geographical 
indications and designations of origin for agricultural 
products and foodstuffs. 
¶16.  Compensation of enumeration is defined by the Copyright 
Act, which entered into effect on January 1, 2004.  The law 
imposes a six percent levy on all recording carriers such as 
CD's and video and audiotapes, and a three percent levy on 
all recording devices such as computers, video recorders, 
DVD players and other reprographic appliances.  Slovakia is 
the only country in Europe to also imposed a 0.5 percent 
levy on all hard discs in computers.  The proceeds from 
these levies go to industry rights holders, including 
foreign entities, although the exact amounts are difficult 
to calculate and vary according to bilateral and 
multilateral agreements.  For example, the Slovak Performing 
and Mechanical Rights Society (SOZA) is responsible for 
distributing compensation for U.S.-made music recordings to 
the American Society of Composers, Authors and Publishers. 
¶17.  In 2003, the SAPU, responsible for protection of movie 
industry rights, discovered 57 websites offering up to 700 
movie titles in the form of burned CDs in 2003.  SAPU has 
worked with the police in an effort to close down the 
websites and prosecute the administrators.  Most of the 
sites had operated on an order-only base (no titles in 
stock).  The BSA, responsible for monitoring software- 
related crime, reported that for the first time ever, an 
individual in Slovakia had received a sentence of one-year 
of probation for the crime of selling computer programs 
through the Internet. 
¶18.  According to the SIPO, Slovakia's TRIPS obligations are 
implemented through the Civil and Penal Codes.  The Slovak 
Customs Directorate is responsible for border enforcement, 
while the Slovak Police Presidium under the MOI is 
responsible for cases occurring within Slovakia.  The State 
Institute for Criminology has a department that specializes 
in determining whether goods are pirated or genuine.  Legal 
representatives of specialized organizations protecting 
intellectual property rights are often invited to assist in 
determining the size of damage and applying compensations. 
A lack of experience on the side of executing bodies still 
persists a major obstacle in IPR enforcement. 
¶19.  In 2003, police seized around 6,000 music CD's (in 
audio or MP3 format), the overwhelming majority of which 
were burned, not industrially produced.  This compares to 
7,500 CD's in 2002; 7,630 in 2001; 13,859 in 2000, and 
26,500 in 1999.  Experts partially blame the decline on 
police incompetence, but also admit that fewer people are 
purchasing pirated CD's as household "burning" becomes more 
common.  According to SAPU's statistics, in the area of 
movies, the police made 114 raids on flea markets during 
2003, and seized 467 videocassettes, 316 DVD's and 560 CD's 
with movie content. 
¶20.  In addition to enforcement, prosecution remains a 
problem.  Slovakia still has no specialized IPR prosecutors 
or police, there are no formal procedures or registrations 
required for lawyers seeking to adjudicate IPR cases, and 
punishment for IPR crimes remains inadequate.  If a pirate 
obtains a skilled lawyer, he can often be acquitted. 
Further, most pirates who are prosecuted receive light 
sentences, such as small fines or probation, although they 
can be sentenced for up to five years in prison in case of 
breaching copyright rights and up to three years in prison 
in case of violating industrial property rights.  To date, 
no persons convicted of piracy have served prison terms. 
¶21.  There are no dedicated courts for the adjudication of 
IPR cases in Slovakia.  However in 2003, the GOS established 
a panel of three judges to adjudicate IPR cases at three 
regional courts, in Banska Bystrica, Kosice and Bratislava. 
The Ministry of Justice, in cooperation with the SIPO, 
conducted intensive training of assigned judges on IPR and 
related issues. 
¶22.  Obligations from WIPO's Copyright Treaty (WCT) and 
WIPO's Performance and Phonograms Treaty (WPPT) were 
implemented into the Slovak Copyright Act in 2000. Slovakia 
became party to WCT and WPPT in 2002.  Moreover, a new 
Copyright Law (618/2003), effective from January 1, 2004, 
has also been brought into compliance with Directive 
2001/29/EC of the European Parliament and of the Council of 
22 May 2001 on the harmonization of certain aspects of 
copyright and related rights in the information society. 
¶23.  We do not believe piracy is a major problem in 
Slovakia.  Authorities have been generally cooperative with 
aggressive private sector efforts to combat piracy of 
various products protected by IPR legislation.  However, 
weak data exclusivity protection remains a major concern and 
we believe it warrants keeping Slovakia on the Special 301 
Watch List.  We are encouraged by Slovakia's membership in 
various international IPR organizations and hope it will 
lead to greater patent protection within the pharmaceutical 
industry.  If so, we would call for Slovakia to be removed 
from the Special 301 List in the future.  Post will continue 
to lobby hard for actual implementation of laws protecting 
patent information, and we urge USG officials to raise the 
importance of this issue with the Slovak embassy in 
Washington as well. 

For those who wish to explore the technical and political aspects of this, disadvantaged countries are suppressed further by imposing on them a law that makes them subservient to the West. There is nothing genuinely ethical about this. Changing their law is unlikely to actually benefit the domestic industry; quite the contrary (in most cases) would happen when laws get changed by outside pressure.

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A Single Comment

  1. Needs Sunlight said,

    September 16, 2011 at 2:49 am


    Again, it would help if the relevant sections of each cable were highlighted. That does wonders for readability.

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