VZCZCXYZ0026
RR RUEHWEB

DE RUEHFR #7212/01 3071636
ZNR UUUUU ZZH
R 031636Z NOV 06
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 2841
RUCPDOC/DEPARTMENT OF COMMERCE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS PARIS 007212 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EFIN KIPR FR
SUBJECT: U/S LAVIN RAISES COPYRIGHT LEGISLATION CONCERNS WITH GOF 
 
REF: A) PARIS 6811 B) PARIS 5242 
 
1.(SBU) Summary: Commerce Under Secretary Franklin Lavin raised 
concerns over France's recently passed copyright legislation 
(reftels) with Ministry of Culture advisors Laurence Franceschini 
and Marc Herubel on October 19, and separately with Trade Minister 
Lagarde's Chief of Staff Stanislas Pottier and Invest in France 
President Philippe Favre.  Lavin said the French copyright 
legislation could potentially represent "a backwards step" for 
innovation, jobs and culture.  The Under Secretary made the point to 
the Culture Ministry that Apple is the largest carrier of 
Francophone music. 
 
¶2. (SBU) Franceschini and Herubel said the GOF would take a 
pragmatic approach to drafting implementing regulations to the 
legislation, including the decree establishing a "technical 
measures" regulatory authority. The advisors said the regulatory 
authority would make decisions on the dissemination of DRM on a 
case-by-case basis and that the potential impact on the integrity of 
a firm's IP would be factored into the decision-making.  However, 
the Culture Ministry could not guarantee that software providers 
would absolutely not have to give up protected intellectual property 
information for the sake of interoperability.  In response to 
questioning, Herubel said the GOF would welcome U.S. analysis for 
WTO/TRIPS-consistency of the legislation to help inform implementing 
regulations. End summary. 
 
¶3. (SBU) ITA Under Secretary Franklin Lavin met with Ministry of 
Culture Deputy Cabinet Director Laurence Franceschini and Technical 
Advisor Marc Herubel on October 19 to raise U.S. concerns related to 
France's copyright law.  Herubel told Lavin the legislation had been 
passed under fast-track procedures, and that political pressure on 
the National Assembly had resulted in the legislation "going a 
little far" in satisfying a vocal slice of the user population.  The 
July decision of the Constitutional Court (ref B) -- and now the 
process of drafting implementing regulations -- was helping to 
reestablish "equilibrium" and ensure protection of IP integrity. 
 
¶3. (SBU) Franceschini and Herubel said implementing regulations 
would include a decree creating a new regulatory authority 
responsible for matters related to the mandatory dissemination of 
DRM systems, among other issues. The decree should be ready by the 
end of the year, with the goal of standing up the authority in 
January. 
 
¶4. (SBU) Franceschini said the regulatory authority would make 
decisions on dissemination of DRM systems on a case-by-case basis. 
She claimed the approach would be "pragmatic" and the potential 
impact on the integrity of a firm's IP would be factored into 
decision-making.  Franceschini also claimed firms could enjoy a 
level of DRM protection by setting compensation prices high, though 
she was unclear on how/whether the ability to do might be impaired 
by decisions of the regulatory authority.  When Franceschini was 
challenged as to how the Ministry would guard against confiscation 
of technology, she was unable to provide a clear explanation, saying 
only that the courts would adjudicate fairly. 
 
¶5. (SBU) Asked why the market wouldn't be more efficient in clearing 
such transactions, Franceschini listed several concerns.  In a 
non-interoperable environment, resulting segmentation increased 
risks of piracy, as experience had shown.  The vertically integrated 
strategies around DRM, favored by companies such as Apple, clearly 
had been critical in helping to launch a new market.  As the market 
matured, it was important to encourage an "interoperable 
environment" in which several standards might co-exist. 
Franceschini drew on the television analogy: the consumer would not 
put up with ten decoder boxes in order to watch ten different 
channels. The advisors added that when France's Competition Council 
denied a suit brought by Virgin Mega to open up Fairplay, the market 
was not yet mature.  Now that it has matured, provisions must be 
made for interoperability, otherwise the consumer is held prisoner. 
 
 
¶6. (SBU) In response to probing, Herubel said he thought the 
copyright legislation was WTO/TRIPS-consistent.  But he noted that 
if the United States had a different analysis, he would be 
interested in factoring that into consideration as the Ministry 
proceeds with drafting implementing regulations. 
 
¶7. (SBU) U/S Lavin closed the meeting by underscoring the importance 
of what was at stake.  The French copyright legislation could 
potentially represent "a backwards step" for innovation, jobs and 
culture.  It would be critical to strike a balance between 
interoperability and proprietary rights that did not come down on 
the wrong side of the equation. He said this legislation gives the 
impression to future innovators and investors the government may 
arbitrarily, in the name of culture and consumer rights, take away 
intellectual property rights if a later competitor promises to 
provide the same service at a lower price. The Under Secretary also 
made the point that Apple is the largest carrier of Francophone 
music.  Apple has increased the public's access to current and past 
French music. That, he said, is the irony here. 
 
¶8. (SBU) In a separate meeting, Stanislas Pottier, Chief of Staff to 
the French Trade Minister, told Lavin there would be 
inter-ministerial consultations on the implementing regulations.  He 
appeared confident his Ministry could ensure strong IP protection in 
the implementing regulations.  Pottier said the Prime Minister's 
office was concerned about not weakening IP protection.  Philippe 
Favre, head of the French Government's investment promotion agency 
Invest in France, intimated to Lavin that the IP damaging elements 
of the legislation would be resolved in the implementing 
regulations.   U/S Lavin also discussed the DRM issue with MEDEF, 
the French Employer's association.  MEDEF did not appear fluent on 
the issue, but was ready to explore it further. 
 
¶10. (SBU) Comment: The Culture Ministry said it would seriously 
review input into the implementing regulation drafting process.  If 
we have specific concerns over WTO/TRIPS consistency, for example, 
sharing those with the French before the decree is finalized may 
help mitigate negative consequences of the legislation. 
 
¶11. (U) Technical note: it appears that both film and music will be 
within the scope of the legislation and software publishers will be 
responsible for paying compensation to the DRM provider. 
 
¶12. (U) U/S Lavin has cleared this cable. 
 
STAPLETON