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

Cablegate



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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 ۦ7, 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 Turkey.


Later on we find examples from Serbia and Montenegro, staring with a cable in which ۦ11 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 ۦ5 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 ۦ7 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 software.


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 ۦ9 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 education."


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:










VZCZCXRO5837 RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV DE RUEHAK #0128/01 0231535 ZNR UUUUU ZZH R 231535Z JAN 07 FM AMEMBASSY ANKARA TO RUEHC/SECSTATE WASHDC 0661 INFO RUEHIT/AMCONSUL ISTANBUL 1980 RUEHDA/AMCONSUL ADANA 1567 RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 03 ANKARA 000128

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EB/TPP/IPE FOR JBOGER PLEASE PASS USTR FOR JCHOE-GROVES AND LERRION USPTO FOR JURBAN USDOC FOR ITA/MAC/CRUSNAK

SENSITIVE SIPDIS

E.O.12958: N/A TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], PGOV [Internal Governmental Affairs], TU [Turkey] SUBJECT: TURKEY: ADVANCE SPECIAL 301 INITIATIVE RESPONSE

Ref: A) 06 STATE 183957

B) 06 STATE 180082

ANKARA 00000128 001.2 OF 003

ۦ1. (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.

ۦ2. (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 questionable.

-- 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.

ۦ3. (U) More detailed responses to the questions raised in ref A are listed below to correspond with the original talking points:

ۦ4. (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.

ۦ5. (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.

ۦ6. (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 SEIZED MATERIALS 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.

ۦ7. (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 BSA.

(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.

ۦ8. (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:

TYPE OF CRIME DURATION W/O DURATION W/ APPEAL APPEAL ------------- -------------- -----------

Trademark 3 - 7 months 2 years Patent 3 - 10 months 2 years Utility Model 2 - 10 months 2 years Copyright: 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

WILSON







Also from Turkey (being downgraded):








UNCLAS SECTION 01 OF 04 ANKARA 000854

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DEPT FOR EB/TPP/MTA/IPE - CLACROSSE/JURBAN AND EUR/SE DEPT PASS USTR FOR JCHOE-GROVES DEPT PASS USPTO FOR JURBAN USDOC FOR ITA/MAC/CRUSNAK

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

Summary -------

ۦ1. (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 Summary.

Pharmaceuticals ---------------

ۦ2. (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.

ۦ3. (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.

ۦ4. (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. ۦ5. (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 -----------------------------------------

ۦ6. (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.

ۦ7. (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 (TNP).

-- 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 process.

-- 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.

ۦ8. (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 -----------------------

ۦ9. (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.

ۦ10. (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 ----------------------

ۦ11. (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.

Training --------

ۦ12. (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.

ۦ13. (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.

Comment/Recommendation ----------------------

ۦ14. (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. Wilson







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








UNCLAS SECTION 01 OF 05 ANKARA 000348

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DEPARTMENT FOR INR/R/MR, EUR/SE, EUR/PD, NEA/PD, DRL JCS PASS J-5/CDR S. WRIGHT

E.O. 12958: N/A TAGS: OPRC [Public Relations and Correspondence], KMDR [Media Reaction Reporting], TU [Turkey] SUBJECT: ANKARA MEDIA REACTION REPORT MONDAY, JANUARY 30, 2006

THIS REPORT PRESENTS THE TURKISH PRESS SUMMARY UNDER THREE THEMES:

HEADLINES BRIEFING EDITORIAL OPINION --------------------------------------------- --

HEADLINES

MASS APPEAL Erdogan: HAMAS, Israel Must Recognize Each Other - Milliyet 1/29 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 - Sabah Georgia Asks for Turkey's Support to Join NATO in 2008 - Milliyet Bill Gates Promises More Investment in Turkey - Vatan ABC Reporter, a Cameraman Heavily Wounded in Iraq - Hurriyet

OPINION MAKERS 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 - Zaman 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 1/29 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

BRIEFING

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 community.

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 said.

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 emphasized.

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 Sabanci.

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."

WILSON







There is more of that in the following Cablegate cable:








UNCLAS SECTION 01 OF 03 ANKARA 002645

SIPDIS

DEPARTMENT FOR INR/R/MR, EUR/SE, EUR/PD, NEA/PD, DRL JCS PASS J-5/CDR S. WRIGHT

E.O. 12958: N/A TAGS: OPRC [Public Relations and Correspondence], KMDR [Media Reaction Reporting], TU [Turkey], Press Summaries SUBJECT: ANKARA MEDIA REACTION REPORT FRIDAY, MAY 6, 2005

THIS REPORT PRESENTS THE TURKISH PRESS SUMMARY UNDER THREE THEMES:

HEADLINES BRIEFING EDITORIAL OPINION --------------------------------------------- ----- HEADLINES

MASS APPEAL 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

OPINION MAKERS 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 - Cumhuriyet 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 - Zaman

BRIEFING

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 Friday.

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 others.

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.

EDITORIAL OPINION:

"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 benefit."

EDELMAN







Here is the "SENSITIVE" cable about "SPECIAL 301 REVIEW: SERBIA AND MONTENEGRO":








UNCLAS SECTION 01 OF 04 BELGRADE 000275

SIPDIS

DEPT FOR EB/IPE-CLACROSSE DEPT PLS PASS TO USTR JCHOE-GROVES, DOC-JBOGER, USDOC PLS PASS TO SSAVICH AND USPTO-JURBAN AND LOC-STEPP

SENSITIVE

E.O. 12958: N/A TAGS: ECON [Economic Conditions], PREL [External Political Relations], SR [Serbia], MW [Montenegro], KIPR [Intellectual Property Rights], Economic Development SUBJECT: 2006 SPECIAL 301 REVIEW: SERBIA AND MONTENEGRO

REF: A) STATE 14937 B) BELGRADE 8 C) 05 BELGRADE 741 D) 05 BELGRADE 643 E) 05 BELGRADE 403

SUMMARY ------- ۦ1. (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.

ۦ2. (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.

ۦ3. (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.

ITEMS REMAINING ON LAST YEAR'S ACTION PLAN ------------------------------------------ ۦ4. (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.

ۦ5. (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.

ۦ6. (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.

ۦ7. (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.

ۦ8. (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.

IMMEDIATE RESULTS IN MONTENEGRO WITH NEW ENFORCEMENT LAW --------------------------------------------- -------------- ۦ9. (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.

ۦ10. (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.

ۦ11. (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.

ۦ12. (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."

ۦ13. (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.

ۦ14. (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.

ENFORCEMENT IMPROVED BUT PR WAS LACKING --------------------------------------- ۦ15. (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 2004.

ۦ16. (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.

ۦ17. (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.

ADDITIONAL IPR AREAS OF IMPROVEMENT NOT IN IIPA REPORT --------------------------------------------- ----- ۦ19. (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.

ۦ20. (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.

TRAINING --------

ۦ21. (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.

EXPECTED NEXT STEPS ------------------- ۦ22. (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 penalties.

- 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 Law.

- 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.

ۦ23. (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.

Recommendation -------------- ۦ24. (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).

ۦ25. (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.

MOORE







More in the following:








VZCZCXRO4665 RR RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG DE RUEHBW #0321/01 0610716 ZNR UUUUU ZZH R 020716Z MAR 06 FM AMEMBASSY BELGRADE TO RUEHC/SECSTATE WASHDC 8083 INFO RUEATRS/DEPT OF TREASURY WASHDC RUCPDOC/USDOC WASHDC RUEHC/DEPT OF LABOR WASHDC RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 BELGRADE 000321

SIPDIS

SIPDIS

DEPARTMENT PASS TO OPIC, EXIM, TDA AND USAID USDOC FOR 4232/ITA/MAC/OEERIS/SSAVICH

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] SUBJECT: MONTENEGRO: ECONOMIC DEVELOPMENTS: FEBRUARY 2006

Index: MACROECONOMICS: -- Five Percent GDP Growth Predicted

BUSINESS and TOURISM: -- Funding for Entrepreneurs -- Sixth Internet Provider -- Banks Report 2005 Profits -- Microsoft Engages in Montenegro -- Niksic Steelworks -- GoM Agrees 2006 Privatization Plan

PUBLIC ECONOMY: -- Unemployment Steady -- Pensions Increased

T-BILLS STOCKS

MACROECONOMICS:

Five Percent GDP Growth Predicted

ۦ1. (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.

BUSINESS and TOURISM:

Funding for Entrepreneurs

ۦ2. (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

ۦ3. (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

ۦ4. (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

ۦ5. (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

ۦ6. (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

ۦ7. (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.

PUBLIC ECONOMY: --------------------

Unemployment Steady

ۦ8. (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

ۦ9. (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).

T-BILLS

ۦ10. (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.

STOCKS

ۦ11. (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).

POLT







And on we move to Jakarta:








VZCZCXRO7584 PP RUEHCHI RUEHDT RUEHHM DE RUEHJA #2531/01 0551044 ZNR UUUUU ZZH P 241044Z FEB 06 FM AMEMBASSY JAKARTA TO RUEHC/SECSTATE WASHDC PRIORITY 0139 INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 JAKARTA 002531

SIPDIS

SIPDIS SENSITIVE

FOR EAP/MTS AND EB/IPE/EAP COMMERCE PLEASE PASS USPTO FOR JOELLEN URBAN DEPT PASS TO USTR FOR KATZ AND GROVES

E.O. 12598: N/A TAGS: ETRD [Foreign Trade], KIPR [Intellectual Property Rights], PGOV [Internal Governmental Affairs], ID [Indonesia] SUBJECT: INDONESIA: 2006 SPECIAL 301 SUBMISSION

REF: A) State 14937; B) 05 Jakarta 16289

ۦ1. (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 -------------------

ۦ2. (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 Surabaya.

ۦ3. (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.

ۦ4. (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) ------------------------------

ۦ5. (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 -------------------------------------

ۦ6. (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 ------------------

ۦ7. (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 software.

ۦ8. (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 important.

ۦ9. (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 judiciary.

Comment and Recommendation --------------------------

ۦ10. (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.

ۦ11. (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 2001:

--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.

ۦ12. (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.

ۦ13. (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.

PASCOE







Finally, there is Slovakia:








UNCLAS BRATISLAVA 000212

SIPDIS

DEPARTMENT FOR EUR/NCE MCKNIGHT AND EB/IPC:WILSON

DEPT PLEASE PASS TO USTR FOR BPECK USDOC FOR KSCHLEGELMILCH USPTO FOR JURBAN/DASHLEY-JOHNSON LOC FOR TEPP

E.O. 12958: N/A TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], ECON [Economic Conditions], XG [Europe], LO [Slovakia], IPR SUBJECT: 2003 SPECIAL 301 REVIEW FOR SLOVAKIA

REF: STATE 43420

ۦ1. 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.

TRIPS IMPLEMENTATION -------------------- ۦ2. 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.

ۦ3. 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.

ۦ4. 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 issue.

ۦ5. 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.

OPTICAL MEDIA ------------- ۦ6. 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.

ۦ7. 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.

COMPUTER SOFTWARE ----------------- ۦ8. 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.

ۦ9. 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 education."

ۦ10. 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 2002.

TRADEMARKS ---------- ۦ11. 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.

ۦ12. 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 appearance.

ۦ13. 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.

DESIGNS ------- ۦ14. 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.

DESIGNATION OF ORIGIN --------------------- ۦ15. 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.

ENUMERATION LEGISLATION ----------------------- ۦ16. 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.

INTERNET PIRACY --------------- ۦ17. 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.

IPR ENFORCEMENT --------------- ۦ18. 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.

ۦ19. 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.

ۦ20. 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.

ۦ21. 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.

WCT AND WPPT COMPLIANCE ----------------------- ۦ22. 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.

COMMENT ------- ۦ23. 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.

THAYER

NNNN







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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[Meme] A Special Patent Office, the EPO
"I have no death certificate yet"
Links 11/07/2024: Internet Phone Book and Intense Mind Control/Censorship by Social Control Media
Links for the day
Andreas Tille, Chris Lamb & Debian sexism, not listening to real female developers
Reprinted with permission from Daniel Pocock
GNU/Linux Expanding in Russia, But Not Exactly Invading the Market
Russian spies work at Microsoft
[Meme] GPL is Still an Alien Concept to the Boardroom of IBM
stomp all over copyleft while blackmailing the FSF into inaction
ChromeOS and GNU/Linux Also Leapfrog and Surpass Apple in Kenya
ChromeOS is at about 1% there, so 6% total (more than Apple)
[Meme] Pay Cash, Avoid Hidden Fees
Cashless society means a less free society
5 Weeks Have Passed Since the Edward Brocklesby (ejb) Scandal or 'Gate' Started. Debian Has Not Yet Responded in Any Way Whatsoever (to Quell Concerns/Fears).
still an ongoing series
The Media Cannot Use the B Word (Bribe) Anymore?
That might "offend" Microsoft
99 More to Go (in 9 Days)
Unless the FSF extends the 'cutoff' date as it usually does
Microsoft Windows in Bulgaria: From 99% to Barely a Quarter
Only 15 years ago it seemed like Windows had cemented its 'lead'
[Meme] Changing How We Think of Patents
they're only about serving and protecting powerful people
Our Most Productive Summer Since We Started (2006)
We have over 10,000 lines of written notes and drafts
Compare WIPO to ADR Forum
it is "rude" not to hire lawyers
[Meme] GPL Circumvention by IBM (Red Hat)
"GPL? All mine!"
GNU/Linux and ChromeOS in Costa Rica: Over 4% Now
Desktop (or Laptop) & Tablet & Mobile combined would be about 50% "Linux"
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, July 10, 2024
IRC logs for Wednesday, July 10, 2024
Links 11/07/2024: Space Programs, Education, and Mass Layoffs
Links for the day
Fellowship indexing pages by person
Reprinted with permission from the Free Software Fellowship
US State Department admitted General Hugh S. Johnson went off-topic, Andreas Tille called for punishments
Reprinted with permission from Daniel Pocock
Gemini Links 11/07/2024: Shifting Interests and It's All Books Now
Links for the day
IBM (Red Hat) is Burning Away Its Investment in GNU and Linux
IBM will have nothing left but smoke
Emma Irwin, from Mozilla to Microsoft & Debian harassment rumors: the hidden report into Open Labs Hackerspace, Albania
Reprinted with permission from the Free Software Fellowship
Let's Encrypt in a Freefall in Geminispace (More Capsules 'Get' It)
Getting a "cert" from a CA says nothing about legitimacy; any malicious site or malware author can get a 'free' one these days. It's like 'Trophy Of Participation' (where merely attending guarantees an award).
Statement on Daniel Pocock is Free Publicity for Daniel Pocock (Streisand Effect)
Since April when a new Debian Project Leader was elected...
Links 10/07/2024: War, Environment, and End of ICQ
Links for the day
What Microsoft Hopes Nobody Noticed During Independence Day Week/Weekend
Microsoft violated California's Fair Employment and Housing Act and the Americans with Disabilities Act
Gemini Links 10/07/2024: Recalling St.GIGA, smol.pub Tricks
Links for the day
Anti-Linux Sites, Powered by Microsoft to Generate False Text Under a Domain Like LinuxSecurity.com
They need to be named and shamed for doing this
Red Hat Developer (developers.redhat.com), Brought to You by Microsoft Staff to Promote Microsoft Proprietary Software That Doesn't Run on GNU/Linux
Yesterday at redhat.com
OSI Blog Posts From Salaried Microsoft Writers, Promoting Microsoft Proprietary Software and GPL-Violating Code Prison
OSI attacking its very own (original) mission
Apple's Main Competition Isn't Microsoft But Low-Cost Chromebooks and GNU/Linux Distros
Case of Dominica
[Meme] Reporting Crimes to the Police, to the Public, to the Media
people who are committing crimes try to accuse those who expose them as the "real" criminals
Microsoft Has Already Lost the Cash Cow in Jamaica
we're looking at around 7% for GNU/Linux
[Meme] Then They Call Their Volunteers 'Fascists' (or Even Worse Labels)
They want the public to think that people who resigned in protest were in fact "expelled" and that moreover they are "conservative" or something to that effect
Sven Luther & Debian forged expulsion after resignation, now with Wind River Software, DebConf24 platinum sponsor
Reprinted with permission from Daniel Pocock
Pop Weekend in Schagen, Netherlands & Debian Day
Reprinted with permission from Daniel Pocock
IBM/Red Hat Racism and Imperialism: Not a New Problem
Especially in that region
In Cuba, Android Surges to New Records, Only About 3% of Web Users Are on Vista 11
only about 15% are traced back to Windows
Colombia: Windows Falls to All-Time Low (26%)
We might be looking at a community of over 1 million GNU/Linux users in that one country
Microsoft "are still in their Extend phase and have been for some time. They know how to play the long game. It's anyone's guess when their Extinguish phase will begin."
It's reassuring to see recognition of the threat
Links 10/07/2024: Microsoft Burns Users of Office 365 connectors in Teams
Links for the day
[Video/Audio] John Shipton's Speech at Julian Assange's (His Son's) Birthday Last Week
We assume someone who was at the event uploaded the recording of this speech (Julian Assange was not there)
In Brunei and Malaysia GNU/Linux Gains Some More, All-Time High Approached in Indonesia
Further gains in southeast Asia are more of the norm these days
[Meme] War is Peace and Antitrust Means Trust
Checking if Microsoft 'trusts' your OS is the same as security???
[Video] The Fake Security Complex (and Why You Should Not Trust Canonical)
"tech world" is full of fake security
Egypt (Population 115 Million) Climbing Towards 7% GNU/Linux Usage, Says statCounter
Egypt is one of Africa's largest populations
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, July 09, 2024
IRC logs for Tuesday, July 09, 2024
Debian harassment: verbal and textual references to abuse every bit as bad as deepfake and AI generated images of women
Reprinted with permission from Daniel Pocock
Six Percent of Maharlika
Microsoft has not been getting good news there in recent years
[Meme] When You Do Mass Layoffs in the United States a Day Before July 4th (Independence Day)
Microsoft still hasn't said how many people it fired