VZCZCXYZ0014
OO RUEHWEB

DE RUEHBW #0885/01 1721234
ZNR UUUUU ZZH
O 211234Z JUN 07
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1044
INFO RUEHBS/USEU BRUSSELS
RUEHVJ/AMEMBASSY SARAJEVO 0352
RUEHSQ/AMEMBASSY SKOPJE 0874
RUEHSF/AMEMBASSY SOFIA 0849
RUEHVB/AMEMBASSY ZAGREB 1433
RUEHBM/AMEMBASSY BUCHAREST 0257
RUCPDOC/USDOC WASHDC

UNCLAS BELGRADE 000885 
 
SIPDIS 
 
DEPT FOR EB/IPE-JBOGER 
DEPT PLS PASS TO USTR JCHOE-GROVES, DOC-CPETERS, USPTO-JURBAN 
AND LOC-STEPP 
USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PREL SR KIPR
SUBJECT: MPA WITHDRAWS FUNDING FOR ANTI-PIRACY ASSOCIATION IN 
SERBIA 
 
SUMMARY 
------- 
¶1.  The Anti-Piracy Association of Serbia and Montenegro 
ceased to exist in Serbia on March 15, 2007, after a November 
2006 decision of the Motion Picture Association (MPA) to 
withdraw its annual funding to the local association as of 
January.  The MPA cited re-focusing resources on a smaller 
number of countries with larger markets as the reason for its 
decision.  Local film distributors say they are unable to 
financially support the continuation of the APA due to 
revenue losses from pirated films, and they are struggling to 
reorganize in the aftermath of MPA's decision.  END SUMMARY. 
 
¶2.  The Anti-Piracy Association of Serbia and Montenegro 
(APASCG) was formed in 2003 with some USD 40,000 in annual 
funding from the MPA.  The APASCG was staffed with one full- 
time attorney and two office assistants.  It had 14 members 
in the film distribution industry and has focused its efforts 
on protecting audio-visual products and services of all kinds 
from unauthorized use.  The association has been very active 
in the American Chamber of Commerce's Intellectual Property 
Rights (IPR) Committee along with other associations like 
International Federation of the Phonographic Industry (IFPI) 
and the Business Software Alliance (BSA). 
 
¶3.  In December 2006, the APASCG received a letter from Chris 
Marcich, Senior Vice President and Managing Director of MPA 
Europe, Middle East and Asia, stating that the USD 50,000 
annual funding would no longer be available for the 
association in 2007.  Marcich stated that it was a policy 
decision to re-focus resources on a smaller number of 
countries.  Factors such as market size, effectiveness of 
anti-piracy activities, estimated losses, and near-term 
commercial prospects were used in selecting countries for 
further funding.  Marcich said funding for eight countries 
would be discontinued in 2007 while another six programs 
would experience significant cuts in MPA contributions.  He 
told econoff that many of these cancelled programs have 
become locally funded, and he believes that this promotes 
greater ownership of the anti-piracy activities.  Econoff 
asked Marcich for MPA to reconsider its decision for Serbia. 
 
¶4.  Zoran Savic, Director of Millennium Film and Chairman of 
the APASCG, unsuccessfully appealed to the MPA in a January 
22, 2007 letter on behalf of the association.  He cited 
several successes of the APASCG over the past three years. 
Three years ago, judges in Serbia were reluctant to 
adjudicate IPR cases.  Now there are over 450 pending 
criminal cases with 53 favorable sentences rendered in 2006. 
Savic also noted the significant public relations activities 
and extensive work with all relevant enforcement bodies.  He 
highlighted the association's achievement of developing a 
procedure to force internet providers to remove piracy sites 
from the internet, in which www.boamorte.worldbreak.com was 
successfully removed in two days. 
 
¶5.  In addition to public relations activities, the APASCG 
monitored markets, notified enforcement officials of known 
piracy problems and requested investigations.  It also 
provided training to these enforcement bodies on how to 
recognize counterfeit goods.  The association was very active 
in the courts as well, representing rights holders and 
verifying legitimacy of movie titles in question. 
 
¶6.  Savic told econoff that the four main local film 
distributors are having difficulty funding legal assistance 
in APASCG's absence.  The largest law firm in Serbia, which 
has extensive experience in IPR protection, has offered its 
services for EUR 2,000/month.  Savic said that two of the 
distributors can pay the EUR 500/month, but he is having 
trouble convincing the other two, which cite financial 
difficulties. 
 
¶7.  Film and music piracy continues to be a problem.  The 
International Intellectual Property Association (IIPA) places 
the level of pirated music in Serbia at 90 percent.  Members 
of the APASCG told econoff that there they have experienced a 
50 percent drop in revenues from sales to video clubs 
compared to the same four-month period last year and a 250 
percent drop in sales to kiosks.  These film distributors 
 
contend that of 450 active video clubs in Serbia, only five 
purchase their entire inventory legitimately.  Some 70 
purchase some inventory from legitimate distributors, while 
the rest offer completely pirated titles. 
 
COMMENT 
------- 
¶8.  MPA's decision to cut funds significantly hamstrings 
anti-piracy efforts in the film industry in Serbia.  Revenue 
losses from piracy have made distributors reluctant to fund 
the APASCG and realize what Marcich describes as "greater 
ownership."  The opposite result is likely to occur where the 
activities of the group are less coordinated and more on an 
ad hoc basis.  We hope that MPA reconsiders its decision. 
Given advances in building an enforcement infrastructure, the 
stage has been set for more success in driving pirated audio- 
visual goods from the Serbian market. But MPA withdrawal, 
coupled with the weakness of the local distributors, could 
undercut prospects for progress. END COMMENT. 
 
POLT