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Reference ID:
07TALLINN66
Created:
2007-01-31 15:19
Released:
2011-08-30 01:44
Classification:
UNCLASSIFIED
Origin:
Embassy Tallinn
VZCZCXRO3756
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTL #0066/01 0311519
ZNR UUUUU ZZH
R 311519Z JAN 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9472
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 03 TALLINN 000066
SIPDIS
STATE FOR EB/CBA, EB/TPP/IPE AND EUR/NB
COMMERCE PLEASE PASS USPTO/OFFICE OF ENFORCEMENT
HELSINKI FOR ECON
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN KIPR EN
SUBJECT: ESTONIA: IPR WORKSHOP REVEALS SHORTCOMINGS AND
FORGES TIES
REF 06 TALLINN 424
¶1. (U) Summary: On January 17-18, Embassy Tallinn and the
U.S. Patent and Trademark Office (USPTO) held a workshop
focusing on copyright infringement in the digital
environment. The event was a rare coming together of 60
Estonian police, prosecutors, judges, government officials,
law professors and industry representatives. The group
discussed enforcement problems resulting from limits on
investigative tools, the prosecutorial practice of dropping
cases for lack of 'public interest', and the small size of
the market. Panelists shared valuable best practices and
collaborated on techniques for pursuing internet-based IPR
criminals. The event received local TV and press coverage,
and participants gave high marks to the interactive case
study and mock trial. End Summary.
¶2. (U) At a two-day workshop titled "Criminal Enforcement
of Intellectual Property Rights", sixty Estonian police
officers, prosecutors, and judges met for the first time
together to discuss and learn about IPR-related crimes and
procedures. The Enforcement Division of the U.S. Patent &
Trademark Office (USPTO) sponsored the event. The workshop
focused on the digital environment, since internet piracy
is a new and constantly evolving challenge to IPR
enforcement in countries with well-developed IT sectors,
such as Estonia. This event was a follow-up to Embassy
Tallinn's international IPR conference in April 2006,
titled "Copyright Infringement in the Digital Environment"
(Ref A). USPTO, the FBI, DOJ, and the U.S. District Court
for Southern New York sent panelists, as did the
International Federation of the Phonographic Industry
(IFPI), the Business Software Alliance (BSA), the Estonian
Organization for Copyright Protection (EOCP), and the
Patent Office of the United Kingdom. The key judge,
prosecutor, and investigator from a recent high-profile
Finnish case discussed "Finreactor", Finland's largest
peer-to-peer (P2P) piracy case, in which twenty-two people
were convicted and ordered to pay damages of EUR 420,000 to
music, film, and computer game companies.
¶3. (U) During introductory remarks, the Estonian Police
Commissioner and the Deputy Under-Secretary on Criminal
Policy for the Ministry of Justice both stressed the
economic, cultural, and security reasons for engaging in
the fight against piracy. In their characterization,
piracy not only costs industry billions each year, but also
represents lost jobs and lost tax revenues. Increasingly,
they saw piracy as a source of income for organized crime
syndicates, since the illegal copying and sale of IPR
material is far safer and more lucrative than drugs or
other crimes. Robert Stoll of the USPTO noted that
emerging artists -- and local cultures -- are hurt
disproportionately by internet piracy because they, unlike
industry mega-stars, cannot afford to continue performing,
if pirates steal what should have been legitimate sales.
Police find common ground; different techniques
--------------------------------------------- --
¶4. (U) The discussion panel on "Investigating IPR Crimes"
generated the most interest from conference participants.
All parties agreed that the hardest aspect of investigating
illegal P2P networks is pinpointing the identity and
location of a given internet provider (IP) address.
Differences arose, however, when comparing the measures
that law enforcement agencies can take. Robert Herzog of
the FBI said that giving false information, using an alias,
pretending to be a file sharer or a hacker, using
informants, even making illegal purchases in the pursuit of
an investigation are all permitted in the U.S. - under
prosecutorial oversight. However, Estonian investigators
said they cannot do such things without a court order from
a pre-trial judge. According to Finnish prosecutor Antti
Pihlajamaki, the police did not use undercover identities
in the Finreactor case; one of the detectives used his own
nickname in chat rooms to collect evidence, and did not
provide false information. While investigators in the
Finnish case managed to gather sufficient evidence without
going undercover, Estonian police and industry groups say
the requirement to obtain such pre-trial court orders does
pose an obstacle to law enforcement here - especially given
the relative inexperience of judges in handling digital IPR
cases.
A Question of Priorities
------------------------
TALLINN 00000066 002 OF 003
¶5. (U) A bigger obstacle to the criminal enforcement of IPR
is Article 202 of the Estonian Code of Criminal Procedure.
This 'discretionary clause' allows prosecutors to drop
cases they deem lacking sufficient public interest.
According to local industry groups, this article is applied
extensively in IPR cases, which are often dropped even when
the industry brings evidence of a violation to law
enforcement. When the IFPI panelist asked for an
explanation of why prosecutors choose to drop IPR cases
under this article, one responded that this is at their
discretion and not for public discussion. Prosecutors in
the audience referred to criminal cases as an
"extraordinary measure" and recommended that industry use
civil courts instead. U.S. panelists noted that although
95% of IPR infringement cases in the U.S. are handled in
civil court, it is important to utilize criminal
prosecution occasionally - especially in cases of high-
profile or repeat offenders - to send a message to would-be
IP pirates.
¶6. (U) During a panel on "The view from private industry",
the problems of small markets came up. The panel noted,
the major record and movie industry groups worldwide (IFPI,
MPAA and trademark representatives) are less motivated to
put resources into Estonia to combat piracy more
aggressively. Eva Tibar-Suvalav, representing Nike, said
that many companies are reluctant to invest in combating
counterfeit goods, because the cost of doing so is often
greater than the losses due to such trademark
infringements. Nike, she said, is one of the few
exceptions, and as a result it is virtually impossible to
find fake Nike products in Estonia, yet counterfeits of
other sportswear brands are still available. Peter Scott
of IFPI offered their highly sophisticated forensic DVD
analyses lab in London as a service to law enforcement.
Privately, however, he told us that IFPI has had to cut
funding to the EOCP - the only anti-piracy organization in
Estonia. Mr. Scott also described a novel enforcement
approach being used by IFPI to go after one of the largest
online digital piracy groups in Russia - follow the money.
IFPI has obtained the cooperation of Visa, MasterCard and
American Express to block transfers of funds into the bank
accounts of the Russian website. Panelists observed,
however, that those infringing IPR law in Estonia, are more
often individual end-users, less likely to attract the
resources of larger industry groups.
¶7. (U) The Judges' panel with U.S. District Judge Lewis
Kaplan's presentation on the U.S. system was one of the
highlights of the workshop, and revealed another key
difference between the two legal systems: sentencing
guidelines. In Estonian courts, sentencing occurs
simultaneous with the announcement of the verdict and is
based on the Estonian penal code. Participants were
surprised to learn that U.S. judges are constrained by
federal guidelines, which stipulate sentencing based on the
specific circumstances of the crime brought into evidence.
The result is that the U.S. system gives more leeway to
prosecutors, while in the Estonian and Finnish system,
judges have more discretion in the final outcome of the
case. Conference participants considered the subsequent
interactive case study and mock trial to be very practical,
as very few digital IPR cases in Estonia actually reach the
trial and verdict stage. The mock prosecution and defense
gave near Oscar-winning performances during the trial,
which the panel of Estonian, Finnish, and U.S. judges ended
with a unanimous guilty verdict.
¶8. (U) Media coverage of the event raised awareness of the
pervasiveness of internet piracy in this otherwise tech-
savvy country. USPTO's Robert Stoll gave a 30-minute live
interview on the popular Estonian morning program
"Terevisioon", which was rebroadcast several times over the
next few days. The Russian-language newspaper "Molodjozh
Estonii" and Russian-language TV evening news also covered
the workshop, and the Estonian-language paper "Postimees"
ran an op-ed by the Charge d'affaires on IPR protection the
following week.
¶9. (U) Comment: The two-day USPTO workshop spurred greater
understanding both by law enforcement and by industry of
the challenges they each face, and the stakes involved, in
digital IPR cases. Further attention to IPR enforcement by
local authorities is all the more important, because major
international industry groups do not see enough incentive
to step into such small markets to combat piracy. Further,
TALLINN 00000066 003 OF 003
the structure of the Estonian legal system makes it even
more important for judges to have a clear understanding of
IPR enforcement. Based on the turnout and high level of
interest in the USPTO workshop, together with recent AmCham
seminars on IPR (for both teachers and small businesses),
we see progress on increasing awareness and compliance in
Estonia with international IPR standards. There is still a
long way to go to bring down the high rates of digital
piracy, but the new working-level relationships and
experience coming out of this workshop will further the
cause of IPR enforcement. End comment.
¶10. (U) This cable was cleared by USPTO.
GOLDSTEIN
WWeek 2015