12.29.11

Cablegate: With Microsoft Front Group Taking on Indonesia, a Call for Open Source Software Adoption

Posted in Asia, Cablegate at 6:09 am by Dr. Roy Schestowitz

Cablegate

Summary: Cables shed light on how Hollywood and a Microsoft front group pressured Indonesian authorities, which had also proposed moving to Free/open source software

We previously covered cables from Indonesia, just shortly after we wrote about ODF there and years after we wrote about a Microsoft MOU. According to the following Cablegate cable, Microsoft’s front group, the BSA, complained about “lack resources to move and properly store cumbersome and sensitive optical disk production machinery seized during raids.” It is in the same cable that we found (in ¶8): “Tanduk provided Katz with an impressive, newly-published handbook titled “Optical Disk Regulation Implementation Guide.” The hard-cover, Indonesian language publication caps a highly successful series of USAID-funded training workshops for the OD factory monitoring team. It includes relevant GOI laws and regulations, color photographs, and detailed technical and procedural guidance for the team. The technical advisor who ran the USAID project, a former Business Software Alliance (BSA) and Motion Picture Association (MPA) local representative, has recently agreed to continue his ODR work with the MOI for another year as a Department of Justice ICITAP senior technical advisor.

Just above that it says: “The heads of several agencies — Trade, Research and Technology, Economic Planning (Bapenas) and the DG for IPR — also pledged to replace pirated software in their agencies computers with open source or legal products.”

As we already know with Cablegate aside, Microsoft used the usual tricks to impede the adoption of FOSS in Indonesia (more on that later). In any event, here is the cable in question:


VZCZCXRO2803
PP RUEHCHI RUEHDT RUEHHM
DE RUEHJA #8114/01 1790836
ZNR UUUUU ZZH
P 280836Z JUN 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 6462
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 05 JAKARTA 008114 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
FOR EAP/MTS; EB/IPE/EAP 
COMMERCE FOR GOLIKE/4430 
COMMERCE PLEASE PASS USPTO FOR JOELLEN URBAN 
DEPT PASS TO USTR DKATZ, JGROVES, RBAE, VESPINEL 
 
E.O. 12598: N/A 
TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], 
WTO [World Tourism Organization], ECON [Economic Conditions], ID [Indonesia] 
SUBJECT: IPR Update - GOI Making Steady Progress 
 
¶1. (SBU) Summary: At the first meeting of the Indonesian 
Government's (GOI) newly-established National Intellectual 
Property Rights (IPR) Task Force on June 7 Indonesia 
National Police (INP) Chief General Sutanto and Attorney 
General Abdul Rachman Saleh pledged to improve IPR 
enforcement and Minister of Trade Mari Pangestu outlined the 
importance of IPR to the country's economic development. 
The Task Force's senior working level committee is drafting 
short and medium term plans of action, as well as 
coordinating efforts to collect better IPR enforcement data. 
The Ministry of Industry (MOI) optical disk (OD) factory 
monitoring team has registered 26 factories,  provided them 
with source identification (SID) codes, and established a 
schedule of unannounced factory visits.  It is also in the 
process of registering the remaining three factories that 
have been identified by the intellectual property (IP) 
industry.  In response to GOI demands, local OD producers 
have voluntarily surrendered over 180 OD stampers without 
SID codes.  Local OD producers and distributors have agreed 
with the GOI that, after this year, any optical disk sold 
without SID code can be considered a pirated copy.  Local IP 
industry representatives report that police cooperation has 
improved. For the first time, police are conducting vendor 
and factory raids on their own initiative.  Jakarta district 
and national police have promised to continue raids, 
particularly against Jakarta's most notorious malls. Police 
and prosecutor collaboration remains weak and there is a 
large discrepancy between the number of cases police turn 
over to the Attorney General's *~cQnzvh-0`eia and Pacific 
Affairs Director Disited Jakarta June 20-22 to discuss Indonesia's 
current Special 301 OCR with key GOI officials and IP 
industry representatives.  GOI officials expressed general 
disappointment with Indonesia's retention on the Special 301 
Priority Watch List in May.  They welcomed, though, the U.S. 
Government's (USG) decision to conduct a second consecutive 
OCR.  Katz informed them that the timing of the OCR would 
depend on GOI efforts and that it could take place as early 
as the end of August or September.  He also stressed to GOI 
officials and IP industry representatives the importance of 
providing regular enforcement data and other information in 
support of the OCR. 
 
National IPR Task Force Holds First Meetings 
-------------------------------------------- 
 
¶3. (SBU) Ministry of Justice Director General of IPR Abdul 
Bari Azed informed Katz on June 20 that the GOI's newly- 
established National IPR Task Force held its first monthly 
senior working level meeting in May and quarterly 
ministerial-level meeting on June 7.  Bari reported that on 
June 7 Indonesian National Police Chief Sutanto and Attorney 
General Abdul Rachman Saleh along with other key cabinet 
officials pledged to improve IPR enforcement. (Note: Katz 
confirmed Bari's account in subsequent meetings with the 
MOI, MOT and police. End note.)  Minister of Trade (MOT) 
Mari Pangestu, vice chair of the Task Force, explained the 
importance of IPR protection and enforcement to Indonesia's 
investment climate and economic development.  The heads of 
several agencies -- Trade, Research and Technology, Economic 
Planning (Bapenas) and the DG for IPR -- also pledged to 
replace pirated software in their agencies computers with 
open source or legal products. 
 
¶4. (SBU) According to Bari, General Sutanto promised INP 
support for MOI OD factory monitoring team inspections and 
continued police raids on pirate OD vendors and factories, 
with emphasis on Ratu Plaza and Mangga Dua Mall, two of 
Jakarta's most notorious pirate OD markets.  Sutanto pointed 
out the challenges inherent in conducting aggressive raids 
against Harko-Glodok, Jakarta's primary pirate OD 
distribution center, noting that it risked social disorder. 
(Note: Harko-Glodok is located in an ethnic Chinese majority 
area of Jakarta and is thought to have links to organized 
crime.  A police raid on the area several years ago led to 
riots, a fire, and several deaths, with police paying 
compensation for some of the damage. End note.) 
 
¶5. (SBU) Bari, who serves as chairman of the Task Force's 
 
JAKARTA 00008114  002 OF 005 
 
 
senior working level committee, said his group would meet 
again in July to agree on text of short and medium term 
plans of action.  Priorities will include OD Regulation 
(ODR) implementation and collecting better data and 
information on GOI IPR enforcement efforts, particularly 
from Indonesia's major urban centers (greater Jakarta, 
Surabaya, Medan, Bandung, Makasar and Denpasar).  Bari noted 
that members of the senior working level committee met 
recently with officials at the Supreme Court to request data 
on civil and criminal IPR cases.  According to Bari, the 
committee is also establishing sub-committees to focus on 
specific issues.  One subcommittee, led by Ministry of Trade 
Senior Advisor Halida Miljani, would liaise with IP industry 
representatives and associations, and another with donors 
and the diplomatic community.  (Note: Miljani on May 30 
briefed American Chamber of Commerce IPR Committee members 
on the National Task Force. End note.) 
 
OD Factory Monitoring Team Sets Schedule 
--------------------------------- 
 
¶6.  (SBU) MOI Directorate General for Chemical, Agriculture 
and Forestry Based Industry Director Tony Tanduk on June 21 
told Katz that the MOI has registered 26 OD factories  and 
distributed SID codes to each of them.  It is also in the 
process of registering the remaining three OD factories 
identified by the IP industry.  The MOI has allocated Rp 300 
million (approximately USD 30,000) per year to the OD 
factory monitoring team. The team, which now includes 
members of the INP, has set a schedule of six unannounced 
factory visits per month.  The first three inspections 
occurred on June 13.  While all three factories had SID 
codes engraved in their moulds and stampers, none were 
producing ODs.  Tanduk remarked, somewhat sheepishly, that 
managers at all three factories claimed that they were 
waiting to ensure the accuracy of copyright documentation. 
 
¶7.  (SBU) Under an agreement with the MOI, owners of 
stampers without SIDs have agreed to turn them in to MOI by 
June 15.  Tanduk showed Katz one surrendered stamper and 
said he has collected 186 to date; he expects to receive 
another 100 in the coming weeks.  The MOI plans to destroy 
the stampers at an IPR public destruction ceremony with the 
police sometime in July.  The agreement also stipulates 
that, after December 31, 2006, the GOI will consider all ODs 
sold without SID codes as illegal pirated copies.  Some 
owners of stampers and factories have delayed using SID 
codes, as it requires them to send stampers and molds to 
Singapore or Hong Kong for engraving.  Katz suggested that 
Tanduk send a letter to all registered factories warning 
them that all their molds and stampers must include engraved 
SIDs codes.  Tanduk agreed. 
 
¶8.  (SBU) Tanduk provided Katz with an impressive, newly- 
published handbook titled "Optical Disk Regulation 
Implementation Guide."  The hard-cover, Indonesian language 
publication caps a highly successful series of USAID-funded 
training workshops for the OD factory monitoring team.  It 
includes relevant GOI laws and regulations, color 
photographs, and detailed technical and procedural guidance 
for the team.  The technical advisor who ran the USAID 
project, a former Business Software Alliance (BSA) and 
Motion Picture Association (MPA) local representative, has 
recently agreed to continue his ODR work with the MOI for 
another year as a Department of Justice ICITAP senior 
technical advisor. 
 
Police Continue Raids 
--------------------- 
 
¶9. (SBU) Jakarta Metropolitan Police (Metropolda) Special 
Crimes Lieutenant Colonel Police Agus Adriyanto and Chief of 
Investigation Umar Surya Fana on June 23 provided Katz with 
a spreadsheet detailing 267 IPR raids on pirate OD vendors 
that police conducted throughout the greater Jakarta 
metropolitan area since the beginning of this year. 
According to the report, police seized roughly 1.2 million 
pirated ODs, and at least temporarily detained 433. 
According to a local MPA representative, these figures do 
not include a raid on Ratu Plaza late on June 23, during 
which Metropolda police seized roughly 100,000 pirated ODs 
and arrested several people.  The 267 raids also do not 
include West Jakarta Police's seizure on June 1 of 140 DVD 
burners and 55,000 pirated ODs and the arrest of two 
persons.  Metropolda also seized 55 burners and 360,000 
pirated ODs and arrested two persons in a separate raid on 
 
JAKARTA 00008114  003 OF 005 
 
 
April 27.  Based on leads from this raid, police raided a 
small distribution warehouse where they seized 30,000 
pirated ODs and arrested another two individuals. 
 
¶10. (SBU) Umar explained that police had investigated and 
referred all 267 cases to the AGO.  He also showed Katz a 
wall chart indicating that 16 individuals remained in 
Metropolda's temporary detention facilities on IPR-related 
charges.  Umar could not say how many of the 433 individuals 
arrested in 2006 were transferred to AGO holding facilities 
along with their case files.  He complained that once police 
sent cases to the AGO, it was very difficult to obtain 
information on their outcomes from the AGO or courts.  Katz 
suggested that joint workshops with the police, AGO and 
courts on IPR evidence collection, investigations and 
prosecutions might facilitate greater cooperation between 
these groups.  Both Agus and Umar welcomed the idea. 
 
¶11.  (SBU) Katz congratulated Agus and Umar on their 
successes and noted that reports of their actions had been 
received in Washington.  He encouraged them to continue 
their efforts, and suggested particular attention be paid to 
Jakarta's most notorious malls.  Umar said his unit would 
remain focused on Ratu Plaza, Mangga Dua and Harko-Glodok, 
but added that raids on Harko-Glodok posed risks.  On June 
22 some Jakarta police ran into physical resistance when 
they attempted to conduct a limited raid on Harko-Glodok's 
street vendors, located some distance away from its main 
wholesale distribution center. 
 
¶12.  (SBU) Umar, a son-in-law of Indonesia Anti-Corruption 
Chairman Taufikurrahman Ruki, said that support for 
Metropolda's efforts came directly to him from General 
Sutanto.   He provided Katz with a tour of Metropolda's 
halls and warehouse filled with growing sacks of seized 
pirated ODs and DVD burners.  Sometime in July, the police 
plan to hold a public destruction ceremony with support from 
the Motion Pictures Association (MPA).  An investigator for 
a local law firm, who works part-time for MPA and supports 
Metropolda's raids, has recently accepted a second DOJ 
ICITAP one-year senior technical advisor position to support 
INP IPR enforcement efforts. 
 
¶13. (SBU) In a separate meeting on June 23, INP Headquarters 
Special Economic Crimes Colonel Police Rycko Amelza Danniel 
told Katz that INP Police Chief General Sutanto has ordered 
his unit to work with North Jakarta police units to develop 
a plan for shutting down Harko-Glodok.  Rycko added that his 
unit would also begin collecting data from police raids, 
seizures and arrests from major urban centers across 
Indonesia. 
 
AGO Remains Weak But Interested 
------------------------------- 
 
¶14. (SBU) Although he did not provide detailed information, 
AGO Acting Deputy Attorney General for Special Crimes Abdul 
Hakim Ritonga on June 23 informed Katz that the Jakarta AGO 
had prosecuted roughly a dozen IPR cases over the past year. 
He admitted that until recently IPR has not been a high 
priority.  He suggested the AGO could raise the profile of 
IPR by including it under the purview of the AGO's newly 
created Transnational Crimes Task Force.  Katz remarked that 
detailed data on IPR prosecutions and convictions throughout 
Indonesia would be very useful for the Special 301 decision- 
making process.  Ritonga said that he could gather such 
information, provided the U.S. Embassy formally requested 
it. 
 
¶15.  (SBU) Katz showed the Ritonga Metropolda's data on 
raids, arrests and investigations since the beginning of 
this year, and asked if the AGO could tell us what happened 
with each case.  Ritonga said it was possible, but warned 
that, while police have recently referred many IPR-related 
case files to the AGO, their cases were often poorly 
investigated, lacked sufficient evidence, or were intended 
to simply to boost police arrest numbers and impress 
superiors.  Ritonga said he would support joint workshops 
with the police, AGO and courts on IPR evidence collection, 
investigations and prosecutions. 
 
Draft Customs Law Includes Ex Officio Powers 
-------------------------------------------- 
 
¶16. (SBU) Ministry of Finance Directorate General of Customs 
IPR Unit Chief Okto Iranto on June 22 told Katz that the 
 
JAKARTA 00008114  004 OF 005 
 
 
GOI's new draft customs law contained the same ex officio 
powers contained in the existing 1995 customs law.  The new 
customs law, however, is intended to resolve court 
jurisdiction issues that held up the issuance of 
implementing regulations for the ex officio power. Okto said 
that Indonesia Customs is eager to obtain the new authority, 
as it will enable customs officers to detain temporarily 
suspected shipments of pirate or counterfeit goods.  He 
added that Customs has consulted closely with local IP 
industry representatives on the status of ex officio powers 
in the draft law, including the  American Chamber of 
Commerce IPR Committee on May 2.  The issue was also 
discussed throughout a May 16-18 USPTO-Indonesia Customs 
workshop in Jakarta that included presentations and 
participation by senior Customs officials and IP industry 
representatives.  Okto said that the GOI has set a deadline 
by the end of this year to enact the new Customs law and 
accompanying implementing regulations. 
 
Other GOI Efforts 
----------------- 
 
¶17. (SBU) During their June 21 meeting, Bari informed Katz 
of several other ongoing IPR related efforts within his 
office.  The Directorate of IPR is cooperating with the 
Japan International Cooperation Agency (JICA) in conducting 
15 IPR public awareness seminars throughout Indonesia this 
year for officials, academics, students and the press.  DG 
IPR also collaborated with the European Commission-ASEAN IPR 
Co-operation Program] in holding a May 22-23 workshop in 
Jakarta on civil and criminal court proceedings.  Lastly, DG 
IPR Abdul Bari Azed on June 6 gave opening remarks at the 
opening of a BSA representative office in Jakarta. 
 
Amcham Members See Improved Enforcement and Cooperation 
--------------------------------------------- ---------- 
 
¶18. (SBU) At a June 22 meeting with Katz, Amcham IPR 
Committee members were in agreement that police were 
improving IPR enforcement and cooperation.  An MPA 
representative said that, for the first time, police were 
conducting raids on their own initiative and were no longer 
requiring formal complaints to act.  She attributed this to 
General Sutanto's December 2005 instruction to district 
police chiefs ordering them to step up IPR enforcement 
activities, particularly against pirated ODs.  The MPA 
representative noted that Jakarta police raids on Ratu Plaza 
and Mangga Dua Mall, however, stopped after Indonesia was 
retained on the Priority Watch List in May, but that police 
continued raids at other locations across the city. 
 
¶19. (SBU) A representative of a major U.S. cigarette 
manufacturer said that he has received very good cooperation 
from police and customs over the last year in seizing large 
shipments of counterfeit cigarettes.  In these cases, 
customs is able to make seizures without ex officio powers 
because the counterfeit cigarettes have counterfeit excise 
stickers that violate Indonesia's tax laws.  He added that 
his company was considering a plan to provide equipment and 
training to some police units.  He noted that one unit he 
works closely with in the Riau Islands has 70 officers but 
severely lacks other resources: it has only two vehicles, 
one telephone line, no internet, and a yearly operating 
budget of USD 12,000. 
 
¶20. (SBU) A Business Software Alliance (BSA) representative 
added that police also lack resources to move and properly 
store cumbersome and sensitive optical disk production 
machinery seized during raids.  Police are scared that if 
the machinery is damaged while under their custody, the 
courts may rule that they pay compensation to the owners. 
Consequently, police customarily seal OD machinery with 
police tape at factories, and it is often just a matter of 
days before pirates break the seals move the machinery or 
simply begin operating again. 
 
Comment 
------- 
 
¶21.  (SBU)  The GOI continues to make steady progress on 
IPR, and high level backing from the Police Chief and 
Attorney General bodes well.  Closer cooperation between the 
MOI, police and AGO will be important for ensuring effective 
factory monitoring and greater prosecutions of pirates.  Our 
new senior technical advisors at the MOI and police, and a 
new Embassy resident legal advisor with considerable IPR 
 
JAKARTA 00008114  005 OF 005 
 
 
experience, should provide valuable new tools for assisting 
the GOI with these challenges. 
 
¶22. (U) USTR Director David Katz has cleared this cable. 
SILVER

A separate cable says that “[o]ne of the ICT National Team’s stated objectives is to work towards legalizing all government software, regardless of whether it is open source or licensed.” Here is the full cable:


UNCLAS SECTION 01 OF 03 JAKARTA 000475 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
FOR EAP/MTS; EB/TPP/IPE JBOGER 
COMMERCE FOR 4430/BERLINGUETTE AND PETERS 
COMMERCE PASS USPTO FOR URBAN AND FOWLER 
DEPT PASS USTR FOR DKATZ, JGROVES, RBAE, CCOLLEY 
 
E.O. 12598: N/A 
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], ID [Indonesia] 
SUBJECT: INDONESIA IPR - ANNUAL SPECIAL 301 SUBMISSION 
 
Ref: a) State 07944; b) Jakarta 00011 
 
¶1. (SBU) Summary:  Since Indonesia's upgrade to the Special 301 
Watch List in November 2006, the Government of Indonesia (GOI) has 
continued to make steady progress towards improving its enforcement 
and protection of intellectual property rights (IPR).  A National 
Intellectual Property (IP) Task Force now holds regular interagency 
coordination meetings, and President Yudhoyono (SBY) signed a decree 
in November 2006 committing the GOI to legalize all its computer 
software.  Parliament passed a new Customs Law on November 15 that, 
when fully implemented, will provide ex officio powers for Customs 
Officials to seize suspected infringing products.  Jakarta 
Metropolitan Police continue to elicit praise from local and 
regional International Intellectual Property Association (IIPA) 
representatives for raids on notorious malls, vendors, distributors 
and factories.  The Ministry of Industry's Optical Disk Factory 
Monitoring Team (ODFMT) inspected registered factories in November 
2006 and February 2007 and issued initial warning letters to some 12 
optical disk (OD) factories.  The Ministry of Industry (MOI) plans 
to assign full-time staff to the ODFMT, conduct more regular 
inspections (including inspections after hours), and begin 
sanctioning non-compliant factories.  A recent Supreme Court ruling 
in favor of the company Intel in a trademark infringement case case 
bodes well for future cases. 
 
¶2.  (SBU) Summary, continued. Despite these steps, the GOI needs to 
further improve the operations of the ODFMT and involve the police 
more closely in the ODFMT's operations.  It also needs to step up 
prosecutions and deterrent convictions of IPR violators and combat 
book piracy and pharmaceutical counterfeiting.  But the GOI is 
steadily taking ownership over the IPR issue, and our interactions 
with Indonesia on the issue have grown less confrontational and more 
collaborative.  To further encourage this important U.S. policy 
success, we recommend that Indonesia remain on the Watch List for 
the entire 2007 Special 301 regular cycle.  End Summary. 
 
¶3.  (SBU) In response to Ref A, we reviewed this year's Special 301 
submissions from the GOI, IIPA, Intel, PhRMA, and the Phillip Morris 
Company.  In general, we agree with their data, characterizations, 
and assessments of the state of IPR protection and enforcement in 
Indonesia.  Piracy and counterfeiting rates remain high and, 
although improving, enforcement remains weak.  At the same time, GOI 
engagement and political will continue to improve and are gaining 
their own momentum. 
 
National IP Task Force Remains Active 
------------------------------------- 
 
¶4. (SBU) According to GOI contacts, The National IP Task Force 
continues hold regularly scheduled quarterly working level meetings, 
as well less frequent senior and Ministerial-level meetings.  At the 
working level, the Task Force has developed a national IP strategy 
and strengthened data collection and interagency coordination. 
However, the lack of a formal budget continues to hamper the Task 
Force, and it must rely on limited funding from the Ministry of 
Justice Directorate General for IPR.  Nevertheless, the Task Force's 
regular interagency meetings, particularly those of senior and 
ministerial level officials, are encouraging greater GOI focus on 
IPR.  Following the first Task Force meeting last year, for example, 
the Minister of Justice and National Police Chief collaborated in 
developing a clever, animated TV spot emphasizing the costs of 
piracy on Indonesia's culture and creative arts. 
 
SBY Leads Efforts to Legalize GOI Software 
------------------------------------------ 
 
¶5.  (SBU) There are other recent examples of growing GOI initiative 
and high-level political will to improve IPR protection.  On 
November 13, SBY signed a decree establishing an Information 
Communication Technology National Team.  The team consists of 
academics, business leaders and GOI officials and aims to create an 
IT regulatory regime that can contribute to economic growth, job 
creation and poverty alleviation.  One of the ICT National Team's 
stated objectives is to work towards legalizing all government 
software, regardless of whether it is open source or licensed. 
Further, the Team will also pursue approaches to cracking down on 
the use of pirate software in internet cafes, universities and the 
private businesses.  The ICT team will report directly to President 
SBY and work out of an office at the Ministry of Communication and 
Information Technology. 
 
¶6.  (SBU) Two months after SBY signed the decree, Minister of 
Communication and Information Sofyan Djalil signed an MOU with PT. 
Microsoft Indonesia, under which the software maker will help GOI 
ministries legalize and upgrade their MS Windows products at a 
significantly discounted price.  Although there has been some public 
 
JAKARTA 00000475  002 OF 003 
 
 
criticism of the MOU, including by State Minister for Research and 
Technology Kusmayanto Kadiman, SBY has stood behind the agreement. 
PT Microsoft Indonesia President Director Tony Chen recently told us 
he was "astonished" by the GOI's growing commitment to legalize its 
software and recommended we encourage the GOI by maintaining 
Indonesia on the Special 301 Watch List. 
 
Customs Law Enacted with Ex Officio Powers 
------------------------------------------ 
 
¶7.  (SBU) Parliament passed a new Customs Law on November 15, 2006, 
that, when fully implemented, will provide ex officio powers for 
Indonesian Customs officials to seize suspected infringing products 
without a court order.  The new law retains ex officio powers that 
existed in the old law, but also clears up court jurisdictional 
issues that had blocked their implementation.  Indonesia Customs 
expects to promulgate the new law's implementing regulations, 
including those pertaining to ex officio powers, by the end of 
2007. 
 
Jakarta Police Sustaining Enforcement 
------------------------------------- 
 
¶8. (SBU) As noted in the GOI's submission, and confirmed by local 
IIPA representatives, the Jakarta Metropolitan Police have sustained 
enforcement actions against malls, vendors, distributors and 
factories of pirated optical discs.  Ratu Plaza, Indonesia's most 
notorious modern market for pirated ODs, has been the subject of 
repeated raids, and one Motion Pictures Association (MPA) regional 
representative told us recently that some of Ratu's vendors have 
given up or moved to other, less-centrally located malls.  That same 
MPA representative described the Jakarta Police's continuing police 
cooperation as "brilliant" and he too recommended Indonesia remain 
on the Watch List.  Our EEB-funded senior IPR technical advisor has 
been instrumental in training and encouraging the Jakarta Police to 
step up their IPR enforcement.  Looking forward, the advisor will 
work to encourage greater police collaboration with the ODFMT and 
prosecutors, as well as greater police enforcement actions beyond 
the boundaries of metropolitan Jakarta. 
 
Monitoring Team Yielding Some Results 
------------------------------------- 
 
¶9. (SBU) As noted in ref b, the ODFMT, with training and planning 
support from our second EEB-funded advisor, conducted monitoring 
visits to all registered optical disc factories in November 2006. 
The MOI subsequently sent 12 warning letters to factories observed 
to have irregularities.  However, the letters highlighted only minor 
infractions, and there has been little ODFMT follow-up.  Although 
the visits revealed weaknesses in the ODFMT's capacity and security 
procedures, they also gleaned useful baseline data on the capacity 
and activities of registered optical disc factories.  More 
importantly, the visits allowed the ODFMT to collect forensic 
exemplars from a majority of the known production machines in 
Indonesia's registered factories.  The International Federtion of 
the Phonographic" Industry (IFPI) continus to analyze tthese 
exemplars in its forensic laboratory in London, and already they are 
yielding important information. 
 
¶10.  (SBU) The ODFMT still requires considerable institution and 
capacity building to be fully effective.  The ODFMT does not have 
full-time monitors, and relies largely on MOI and Police officials 
temporarily seconded from other positions.  t needs direct support 
from the police, particulrly if it is tt c"n*duct visits at night 
and to wlll guarded factories.  The ODFMT also needs to impe ment a 
more credible system of warning and sanctioning factories in 
violation of laws and regulations. 
 
¶11.  (SBU) MOI Director General for Downstream Chemical Industries 
Benny Wahyudi told us on February 20 that the ODFMT visited seven 
factories on February 17, and inspected the five that were open and 
operating.  He promised to provide us with the results of those 
visits as soon as they were compiled.  Wahyudi agreed that the 
Monitoring Team needs at least one full-time staff member.  He 
noted, though, that this person might have to be a contractor, as 
the MOI did not have a specific budget and position set aside to 
staff the ODFMT.  Wahyudi also agreed that the MOI would need to 
work closer with the police and develop a more effective system of 
warning and sanctions.  He suggested that the Embassy senior advisor 
for the ODFMT would be instrumental in helping the MOI address these 
challenges. 
 
Glimmer of Hope in Intel Case 
----------------------------- 
 
¶12. (SBU) The Supreme Court's February 1 ruling in favor of Intel in 
 
JAKARTA 00000475  003 OF 003 
 
 
the Intel Jeans case is also a favorable development.  In the case, 
the court cancelled the trademark of a local brand of jeans, Intel 
Jeans, and ruled that Intel is entitled to trademark protection as a 
well known brand.  The ruling bodes well for the Supreme Court's 
upcoming decision in the appeal of Intel's Panggung case (the 
Indonesian firm PT Panggung produces a number of electronics 
products under the registered trademark "Intel").  While the 
Commercial Court's previous rulings against Intel in the Panggung 
case have been setbacks, Intel's legal counsel recently described 
the case as an aberration in the Commercial Court's otherwise 
respectable record in handling civil IPR cases, particularly those 
involving trademarks. 
 
Significant Concerns Remain 
--------------------------- 
 
¶13. (SBU) Despite the clear momentum on IPR issues, there are 
remaining concerns.  Indonesia's record on IPR prosecutions remains 
poor.  Frequent prosecutor rotations, lack of transparency, and 
corruption make this a daunting task; and high level political will 
and support will be critical to making headway on IPR convictions 
and prosecutions.  Pharmaceutical counterfeiting and book piracy 
also remain largely unchecked.  GOI officials tell us frequently 
that they consider pharmaceutical counterfeiting to be a serious 
health concern for the country, as well as a potential rallying 
point for greater public support for IPR protection and enforcement. 
 Key GOI officials have endorsed a University of Indonesia study 
revealing alarming pharmaceutical counterfeiting rates and its high 
cost to the Indonesian economy.  The GOI, however, has yet to 
effectively engage the pharmaceutical industry on these issues. 
Book piracy remains rampant in universities and local bookshops. 
Indonesia has yet to develop an association or other means through 
which publishers and authors can collect and distribute book 
royalties.  The GOI would very likely welcome U.S. technical 
assistance in this area. 
 
Watch List is the Best Option 
----------------------------- 
 
¶14. (SBU) Over the past two years, the combination of a 
reform-minded government in Indonesia and five regular or 
out-of-cycle Special 301 reviews has done much to change our 
interactions with the GOI on IPR issues.  GOI leaders are pursuing 
initiatives to promote IPR that were a only short time ago beyond 
our expectations.  At the same time, our relationships with working 
level contacts have become much more collaborative, particularly 
following Indonesia's removal from the Priority Watch List last 
November.  Four months later, although much work remains, the GOI is 
moving forward on IPR issues largely under its own steam.  With the 
GOI taking increasing ownership of the issue and steadily improving 
its IPR enforcement and protection, we believe a third consecutive 
OCR would be counterproductive.  Accordingly, Embassy Jakarta 
recommends strongly that Washington agencies retain Indonesia on the 
Special 301 Watch List for the 2007 regular Special 301 cycle, with 
no OCR. 
 
HEFFERN

We will cover some more Indonesia cables in a separate post.

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