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Viewing cable 09MADRID1152, MADRID IPR CONFERENCE: GOS MOVES TOWARDS

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Reference ID Created Released Classification Origin
09MADRID1152 2009-12-02 12:12 2010-12-03 21:09 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Madrid
VZCZCXRO5150
RR RUEHIK
DE RUEHMD #1152/01 3361200
ZNR UUUUU ZZH
R 021200Z DEC 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1520
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 4248
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 04 MADRID 001152 

SENSITIVE 
SIPDIS 

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

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

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

MADRID 00001152 001.3 OF 004 


SUMMARY 

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

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

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

LEGISLATIVE ISSUES 

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

APPROACHES TO COMBATING ONLINE PIRACY 

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

MADRID 00001152 002.3 OF 004 


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

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

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

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

RIGHTS-HOLDERS' CONCERNS 

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

MADRID 00001152 003.3 OF 004 


of ISPs in combating illicit downloads. 

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

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

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

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

COMMENT 

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

MADRID 00001152 004.3 OF 004 


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