VZCZCXRO3109
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSF #0231/01 0521208
ZNR UUUUU ZZH
P 211208Z FEB 07
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC PRIORITY 3262
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 SOFIA 000231 
 
SIPDIS 
 
STATE FOR USTR LMOLNAR, JCHOE-GROVES, FOR EB/IPE JURBAN; SWILSON; 
JBOGER AND EUR/NCE MNORDBERG 
COMMERCE FOR SSAVICH 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON KIPR ETRD BU
SUBJECT: BULGARIA 301: RECOMMEND RETAIN ON WATCH LIST, WITH 
OFF-CYCLE REVIEW 
 
Ref: A. 06 Sofia 1622   B. State 07944 C. 05 STATE 183379 
 
¶1. (SBU) SUMMARY:  The Bulgarian government has made tremendous 
strides over the past 15 months to improve its Intellectual Property 
Rights (IPR) regime.  It has met virtually all of our Action Plan 
requests (Ref C).  With renewed political will, it has adopted 
strong IPR legislation; established an effective interagency 
coordinating council; improved communication with industry; and 
carried out an aggressive, visible, and much discussed campaign to 
educate the public about the dangers of piracy.  It must still make 
additional progress to achieve effective, sustained enforcement, 
particularly to stem internet piracy, increase convictions and jail 
time, and reduce the overall piracy rate. 
 
¶2. (SBU) In recent years, we recommended Bulgaria be placed on the 
Priority Watch List or Watch List because they were not taking 
enough serious steps to curb piracy.  Now, we judge, they have made 
clear progress and are taking concrete actions - but not enough time 
has passed for the results (more convictions, lower piracy rates) to 
show.  Therefore, we recommend this year that Bulgaria be 
provisionally retained on the Watch List - with an asterisk - 
namely, that Bulgaria will be subject to an Off-Cycle review in six 
months.  Holding out the prospect of getting off the list, while 
encouraging and supporting the clear momentum forward we see, will 
help motivate authorities to achieve more tangible results.  This 
package should contain language commending efforts to date with a 
robust warning about the need to finish the job.  END SUMMARY 
 
STRONG LEGISLATION 
 
¶3. (SBU) Ref A lays out GOB activities through late 2006 - a strong 
effort that reflects the renewed desire at the political level to 
roll back piracy.  In trying to meet EU accession requirements and 
remove itself from the 301 Watch List, Bulgaria has strengthened its 
legislation up to - and in some cases above - EU requirements.  Laws 
adopted last year to increase deterrent penalties and criminalize 
large-scale possession were positive steps.  Court magistrates, 
accustomed to clear-cut legal lines, however, are troubled by what 
they call "grey areas" in the laws.  A combination of increased 
training and tweaks to the current regime should help.  Industry's 
301 submissions correctly recommend further efforts to fine-tune 
laws and regulations, but most observers feel Bulgaria now has a 
strong framework to protect rights-holders. 
 
INDUSTRY AND GOVERNMENT WORK TOGETHER 
 
¶4. (SBU) Industry praises increased access to the government through 
the interagency Council on Intellectual Property Protection 
(Council.)  For instance, the GOB and copyright industry 
representatives worked together on legislation and to try and 
streamline investigation practices.  The GOB has also been more 
responsive to complaints by individual companies.  Two parties told 
us that following an informal government-industry gathering in 
December their problems have been - or are in the process of being - 
resolved.  This is progress over the previous slow-to-stagnant 
bureaucratic process.  There are still outstanding individual cases, 
and industry would like further cooperation, such as permission to 
participate in raids, but this is on the right track. 
 
AGENCIES COOPERATE 
 
¶5. (SBU) The Council has also greatly improved cooperation between 
the ministries.  This has allowed timelier sharing of information 
and coordination on regulatory and law enforcement activities.  The 
Council's work has also created the sense of "one team" fighting 
piracy that we had envisioned when we suggested it to the government 
as part of our 2005 "Action Plan".  There are still areas that need 
to be improved here.  For instance, cooperation between the 
Ministries of Culture and Economy and law enforcement folks at 
Interior is good, but could be regularized. 
 
ENFORCEMENT IS SPOTTY 
 
¶6. (SBU) Overall enforcement activities are up in 2006 according to 
industry and government.  The creation of a cyber-crime unit in the 
Ministry of Interior's Organized Crime Directorate left optical disk 
and industrial piracy efforts to local police.  The cyber-crime 
group can be very strong and successful in computer crimes - child 
pornography, phishing and fraud - but due to limited resources has 
had an erratic year going against internet IP crime.  They have 
taken down a few pirate sites, only to see them re-open soon after 
and have complained to us privately that the courts are feckless - 
at best.  Sustained commitment to addressing internet IP crime, 
which is in the 99-100% range for music, is needed.  Local police 
efforts against IPR are ad hoc and should be formalized throughout 
the country.  Cooperation with industry should be improved.  There 
is no evidence of large scale illegal printing of Optical Disk Media 
 
SOFIA 00000231  002 OF 003 
 
 
(ODM) in Bulgaria, but the authorities need to increase pressure 
against large-scale burning. 
 
¶7. (SBU) Street-level piracy is down in Sofia; partly due to more 
successful police efforts and legal changes, and partly due to an 
increase in internet crime.  Physical piracy of ODM and luxury goods 
in the Black Sea and ski resorts remains high.  Action against 
counterfeit spirits has improved, but many whiskies and other 
American-owned brands are still pirated.  In addition, an alcohol 
inspector and three high-level Ministry of Economy officials were 
attacked in 2006, most likely because of their actions against 
producers of fake liquor; no one has been apprehended and the cases 
never received publicity. 
 
PROSECUTORS NOW ON BOARD; BUT MUST GET CRACKING 
 
¶8. (SBU) The prosecutor's office, reinvigorated a year ago with new 
leadership and a determination to clean out the dead wood, has begun 
to take IPR crimes more seriously.  A Deputy Prosecutor leads IPR 
efforts with regional prosecutors and is creating a manual to 
formalize procedures throughout the country.  We would like to see 
at least one IPR expert in each regional prosecutor's office and are 
working towards that goal with Department of Justice-funded and 
organized training seminars.  Industry reports favorable success in 
creating allies with prosecutors and police through these seminars, 
and we are hoping that the arrival of DOJ's regional IPR Coordinator 
to lead IPR efforts out of Embassy Sofia will be a force 
multiplier. 
 
COURTS REMAIN THE WEAK LINK 
 
¶9. (SBU) The courts are a weak part of the process - not just for 
IPR cases.  The good judges are not fully aware of IPR laws and the 
bad ones at best don't really care.  Deterrent penalties are strong 
thanks to embassy and industry-pushed changes in the law in 
2005-2006, but the courts are not consistently imposing them.  USAID 
has begun training judges, but we could use more USG and industry 
programs and funds to get this effort out across the country.  With 
stronger efforts by the prosecutor's office we expect the courts to 
also improve their ability to fairly dole out justice - but this 
will take time.  The government's good efforts will begin to bear 
fruit in the form of reduced piracy only when serious penalties are 
imposed.  Bulgaria must now increase convictions, fines and jail 
time in order to send the message to pirates that the government has 
the will and capacity to stop IP crime. 
 
EMBASSY EFFORTS - SUCCESSES THROUGH A TEAM APPROACH 
 
¶10. (SBU) In addition to increased training offered by DOJ and 
USAID, we have increased cooperation with law enforcement through 
the Legatt.  Persistent lobbying by FCS and PolEc has stretched 
across the government from the working level to Ministers and the 
PM's office.  Ambassador Beyrle has called for increased efforts to 
fight piracy - as recently as February 15 in a major address on 
economic issues - and at the working level we have also spoken to 
public groups about IPR.  Public Affairs has brought in speakers and 
crafted IV programs to help increase awareness of this issue. 
 
FUTURE STEPS: GOB HAS PLANS; WE MUST KEEP THEM HONEST 
 
¶11. (SBU) We have told the GOB we share the EU's concerns that 
recent progress could be slowed or reversed following EU accession 
or if Bulgaria is taken off the 301 list.  The government has 
assured us they have plans to continue their efforts, including a 
second phase of the public awareness campaign in movie theaters; a 
study in the spring/summer to evaluate the success of their efforts 
and re-tool if necessary; work with secondary and university 
students; additional efforts with the prosecutor on methodology; 
cooperation with the media; and obtaining financing from the Dutch 
government for IPR programs.  They also feel the leg-work they have 
done this year in the legislative arena and in building 
relationships between institutions - particularly with the 
prosecutors - will begin to bear fruit this year.  On our side, we 
must continue our efforts with law enforcement and the courts, and 
hold the government to its plans. 
 
COMMENT 
¶12. (SBU) Bulgaria made substantial progress last year.  By honestly 
holding out the prospect that - depending on their near-term actions 
- they could be removed from the list, we can leverage the good work 
they have done to date.  An off-cycle review, combined with 
increased engagement from Washington and at the highest levels here, 
will motivate them to continue efforts especially on the law 
enforcement side with increased raids, seizures, arrests, 
convictions and jail time.  Our engagement and public message must 
include praise for hitting most of our action plan goals and laying 
a strong institutional groundwork.  If there were a prize for 
 
SOFIA 00000231  003 OF 003 
 
 
Most-Improved, Bulgaria would certainly win it, but we think some 
added attention over the next few months is needed to get them over 
the top. 
 
BEYRLE