This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 PARIS 003153 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR E, EB, EB/IPE, EUR/WE 
DEPT PLS PASS USTR FOR JSANFORD/VESPINEL/RMEYERS 
COMMERCE FOR SJACOBS, SWILSON 
DOJ FOR CHARROP, FMARSHALL, RHESSE 
COMMERCE PLEASE PASS USPTO 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD PGOV FR
SUBJECT:  FRANCE'S DIGITAL COPYRIGHT BILL: SENATE VOTES TO SOFTEN 
INTEROPERABILITY BUT LOW PENALTIES REMAIN UNCHANGED 
 
REF. PARIS 01847 
 
¶1. This is an action request. See paragraph 13 
 
¶2. (SBU)  SUMMARY.  The French Senate approved in the early hours of 
May 11 the GOF draft law on digital copyright, in a format which 
leaves unchanged the National Assembly's decriminalized penalty 
regime, the principle (if not the requirement) of interoperability, 
and the so-called "Vivendi Universal Amendment" criminalizing 
peer-to-peer software publishing.  The draft law adopted by the 
Senate largely takes the sting out of interoperability by laying out 
general guidelines -- which no longer require Digital Rights 
Management (DRM) vendors to divulge industrial secrets to their 
competitors -- and creating a new independent authority to decide on 
the scope of interoperability and the "right to the exception for 
private copy." The newly adopted text, known as the Law on Author's 
Rights and Related Rights in the Information Society, generally 
abbreviated as DADVSI in French is a step that would bring France in 
line with the 2001 EU Digital Copyright Directive.Over the next 
month, the text will likely go to a reconciliation conference at the 
end of the month, and be signed into law before the summer. END 
SUMMARY. 
 
Senate Approval And Next Steps 
------------------------------ 
¶3.  (SBU) The DADVSI draft law was adopted by the French upper house 
on May 11, with 164 votes in favor, 128 against, and 37 abstentions. 
 All the votes in favor came from representatives of the right of 
center government UMP party.  The text will now go before a joint 
committee of both houses of the French Parliament to be reconciled, 
and for final approval under the current Government "fast-track" 
emergency procedure, which requires only one reading by both houses. 
 Upon completion of the legislative procedure, the draft bill will 
be submitted to President Jacques Chirac for signature some time 
before the summer.  France, which had tabled implementing 
legislation in November 2003, is the last country, with Spain, to 
transpose the EU Copyright Directive. 
 
Exceptions to Exclusive Copyrights: 
---------------------------------- 
¶4.  (SBU) Exceptions to exclusive copyrights, for public libraries 
and archives, will now have to fulfil the "three-step test," i.e. 
that they be confined to special cases, not conflict with a normal 
exploitation of the work, and not unreasonably prejudice the 
legitimate interests of the right holder.   Education and research 
have been added to the restrictive lists of exceptions in the 
Senate, following the threat of a campaign of civil disobedience "in 
any way they deemed useful and relevant" by over 2000 members of the 
French scientific community. 
 
¶5.  (SBU) The more traditonal exception for private copy, an 
essential feature of French "droit d'auteur," which allows French 
residents to freely make copies of works (except software) for their 
private use (and that of their family and friends) has also been 
refreshed. The number of copies allowed as part of that exception 
will now be decided by a new high regulatory authority, in charge of 
outlining the contours of the private copy exception as well as the 
new interoperability principle.  The new authority will also work 
hand-in-hand with the already existing Copyright Commission, which 
sets the rates and conditions for the "tax on private copy" meant to 
address the losses incurred by copyright holders. This tax is levied 
on blank media (audio and video cassettes, CD, DVD, as well as 
memory and hard drives in portable media players).  While most of 
this tax goes to rightholders, a quarter of it, representing some 40 
million euros a year (USD 50 million), is used to finance cultural 
events and festivals throughout France. 
 
Penalties Remain Unchanged 
-------------------------- 
¶6.  (SBU)  The system of "gradual sanctions", i.e. decriminalized 
fines, has been confirmed by the Senate as "fair and balanced" -- 
despite efforts by one Senator and former Minister of Trade and 
Industry, Gerard Longuet, to switch from what he described as 
"organized indifference" to stiffer sentences.  Culture Minister 
Donnedieu de Vabres reiterated on this occasion that the purpose of 
the bill was not to go after offenders but to ensure the protection 
of works.  As a result, non-commercial downloads are subject to the 
lowest fine in France's Penal Code (38 euros), the equivalent of a 
traffic ticket,  instead of the original three years' imprisonment 
and 300,000 euro fine proposed earlier by the GOF.  These heavy 
penalities in the first GOF draft bill created a major outburst in 
the National Assembly, eventually leading to the adoption of the 
radical "global licence."  In the words of one Socialist and 
technologically savvy member of the National Assembly, it would be 
wrong "to describe the eight million people who have downloaded 
music from the Internet as delinquents."  On May 11, the Culture 
Minister announced that an "index" of all protected works would be 
set up to enforce the three goals of the bill: respect of copyright, 
private copy and interoperability. 
 
Softening Interoperability 
-------------------------- 
¶7.  (SBU)  The Senate has proposed largely weakening the National 
Assembly's radical ideas on the DRM technology.  Two amendments in 
the National Assembly's version had stated that providers of DRM 
systems should provide the necessary technical documentation to ANY 
party needing it to ensure that interoperability, including the 
source code.  This was interpreted as a direct attack on Apple's 
iTunes platform and their iPod players. 
 
¶8. (SBU)  In press statements, Apple said that the French copyright 
law amounted to "state-sponsored piracy" and that it would pull its 
business out of France. This declaration had an unfortunate impact. 
It heartened claims by free-software advocates and politicians who 
said that the opening up of DRM would benefit makers of DRM systems 
by enabling them to prosecute competitors as facilitating piracy. 
U.S. Secretary of Commerce Carlos Gutierrez's press comments saying 
that while he needed to take a look at the legislation, he supported 
protecting intellectual property rights were widely interpreted to 
be supportive of Apple, and French pro-interoperability groups 
reacted disapprovingly.  The Odebi League, a citizen's action group 
defending the rights of Internet users, told Apple to "mind its 
business and not meddle into the French legislative process" and 
pointed out that "if Apple wishes to do business in France, it has 
to respect the rights that the French enjoy."  Some senators said 
they regretted that Apple did not appeal to them directly and 
interpreted it as a lack of interest. 
 
Creating A New Regulatory Authority 
----------------------------------- 
¶9.  (SBU)  The Senate bill proposes a new regulatory authority to 
examine the question of private copies and interoperability.   This 
new seven-member High Authority, modelled along the lines of 
France's independent regulatory bodies in the electricity and gas 
sectors (CREG), and in the telecoms and electronic commerce sector 
(ARCEP), replaces the much-decried "college of mediators" initiated 
by the National Assembly.  Its responsibilities, much like its 
guidelines, have been left as open as possible to allow for the fast 
pace of technological change.  At the same time,  prodded by 
embattled Culture Minister Donnedieu de Vabre and Villepin 
administration, the Senate Cultural Affairs Committee developed a 
text designed to meet as little opposition as possible from the 
National Assembly once in the joint committee for conciliation. 
These considerations explain the current text's willingness to pass 
the difficult decisions on to the new authority. 
 
Previous Support For Interoperability and Copying 
--------------------------------------------- ---- 
¶10. (SBU)  Public discussion of DRM and its effect on the private 
copy exception have been particularly vivid in France.  French 
consumer associations initiated and often won court cases where DRM 
restricted private copying -- a sacrosanct exception under French 
copyright law. 
Over the past three years, French consumer organizations have 
initiated a number of court cases dealing with complaints of 
consumers about CDs and DVDs that could not be copied and ripped 
because of technical protection measures in place. In dealing with 
the cases, French courts had developed the argument that the ability 
to play a CD or a DVD on different devices constituted an essential 
characteristic of a CD or DVD, and that producers of such devices 
could be held liable for misleading the consumer in case of 
incompatibilities.  This first step towards establishing the right 
to interoperability was confirmed earlier this year, when a Paris 
Court of Appeals concluded that DRMs must respect the private copy 
exception. 
 
NEXT STEPS 
---------- 
 
¶11. (SBU) Next steps include the drafting of implementing 
regulations, which would also give the GOF (and stakeholders) an 
opportunity to tweak the legislation, particularly regarding 
penalties and sentencing.  This is expected to take place over the 
summer.  The GOF will draft and implement these by decree. Other 
possibilities for modification, according to lawyers, include a 
constitutional challenge, which could come on any number of 
articles. We understand that the Commission will eventually examine 
all the EU member-states' transpositions of the directive at some 
point over the next year.  Finally, the GOF notes that the law has a 
"review clause" of 18 months, requiring the government to provide 
the Parliament with an evaluation of its efficacy. 
COMMENT AND ACTION REQUEST 
-------------------------- 
¶12.  (SBU).  France is one of the last countries to fulfil its 
obligation to transpose this 2002 EU Directive.  In making only a 
minimal effort, many Senators seemed to be acknowledging how quickly 
technology had moved since then 2002, and during the debates, French 
Parliamentarians underscored the irony of a belated implementation 
of a directive which the EU Commission is reportedly already in the 
process of re-examining.   In our conversations over the last weeks 
where we raised our serious concerns over the quality and direction 
of this controversial bill, French government officials and 
observers had sought to reassure us and other stakeholders. We were 
told (see reftels) that the Senate version would address many if not 
most of industry's concerns. Senate legislative staff was thought 
more pro-business, more technologically savvy, and less ideological. 
Industry observers, many of whom where involved in a low-profile but 
intense effort to reshape the bill with key amendments were 
optimistic as well. Working with French industry allies, they 
proposed close to 300 amendments. However, with the President and 
Prime Minister under political siege, the government and the 
majority party were in a hurry to get this complicated and 
troublesome bill off their to-do list. By placing the bill on a 
legislative fast-track, the government could be assured that the 
conciliation conference would be over quickly. This political 
pressure resulted in some improvements, such as interoperability, 
where industry analysts are somewhat relieved at the results, but a 
number of crucial elements remain unchanged, notably the lack of 
deterrent penalties. 
 
¶13. (SBU) COMMENT AND ACTION REQUEST.  The next six months will 
provide some limited opportunities to fine-tune the bill, notably in 
the drafting of implementing regulations, which the GOF can issue by 
decree.  Other options would be to raise examination of the 
legislation in light of other EU member state transpositions as well 
as WIPO and TRIPS commitments.  Post would appreciate Washington's 
cleared interagency guidance, including any legal analysis regarding 
the legislation's impact.   End Comment. 
 
Stapleton