VZCZCXYZ0020
PP RUEHWEB

DE RUEHKV #2260/01 2540855
ZNR UUUUU ZZH
P 110855Z SEP 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 3674
INFO RUEAWJA/DEPT OF JUSTICE WASHDC
RUCPDOC/USDOC WASHDC
RUEHMO/AMEMBASSY MOSCOW 0240
RUEHGV/USMISSION GENEVA 0085

UNCLAS KYIV 002260 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/TPP/IPE AND EUR/UMB 
STATE PLEASE PASS TO USTR FOR JGROVES/PBURKHEAD 
COMMERCE FOR ITA/MAC/OIPR 
COMMERCE FOR 4231/ITA/OEENIS/NISD - CLUCYCK 
COMMERCE PLEASE PASS TO USPTO 
STATE PLEASE PASS TO COPYRIGHT OFFICE 
 
E.O. 12958: DECL: N/A 
TAGS: ETRD KIPR ECON UP
SUBJECT: UKRAINE IPR CONFERENCE HOSTS LATEST ROUND IN FIGHT 
OVER COPYRIGHTS 
 
REFS: A) KYIV 1205 
 
      B) KYIV 348 
      C) 2006 KYIV 4359 
      D) 2006 KIEV 3810 
      E) 2006 KIEV 3414 
      F) 2006 KIEV 3293 
      G) 2006 KIEV 3145 
 
¶1. Summary: Ukraine's annual IPR Conference, held September 
3-7, brought together GOU officials, industry reps, and 
international experts to promote better IPR protection in 
the country.  Discussion of possible Copyright Law 
amendments and the operation of royalty collecting 
societies proved most contentious.  Although the courts 
have now confirmed the revocation of the license of a rogue 
and long-irksome collecting society, Ukraine's collective 
management system remains in need of reform.  Post has 
insisted that Washington be able to review any legislative 
amendments before they are sent to parliament, now not 
expected to occur until 2008.  The conference also allowed 
participants to explore alternative IPR enforcement methods 
and how to align Ukraine's IPR practices more fully with 
Europe.  Post thanks USPTO and the Copyright Office for 
providing top-notch guest speakers for the event.  End 
Summary. 
 
"Ukraine Will Never Return to the Dark Days" 
-------------------------------------------- 
 
¶2. Ukraine's State Department of Intellectual Property 
(SDIP) held its annual IPR Conference in Yalta, September 
3-7.  The approximately 200 conference participants 
included a range of GOU officials, industry 
representatives, and international experts from 
institutions such as the World Intellectual Property 
Organization (WIPO).  SDIP Chairman Mykola Paladiy opened 
the event by reviewing progress on the IPR front, stating 
that Ukraine would "never return to the dark days" when it 
was listed as a Priority Foreign Country on the USG's 
Special 301 Report. 
 
Rogue Collecting Society Loses License 
-------------------------------------- 
 
¶3. SDIP Deputy Chairman Valentin Chebotarov chaired a 
special session on copyrights.  SDIP officials briefed on a 
recent court decision upholding the GOU's revocation 
several months back of the license of Oberih, a rogue 
royalty collecting society that had long drawn the ire of 
both the domestic and foreign copyright industry (refs E- 
F).  (Note: Several contacts had told Econoff prior to the 
decision that they feared Oberih had a good chance of 
winning its appeal in court.  End note.)  SDIP's move, now 
confirmed by the courts, closed a long-standing irritant 
for the copyright industry. 
 
Continued Disagreement over Copyright Law Amendment 
--------------------------------------------- ------ 
 
¶4. Chebotarov admitted that Ukraine's copyright system 
needed further changes, and said the GOU was still working 
on revisions to the draft Copyright Law amendment to 
clarify the functioning of royalty collecting societies. 
He noted, however, that SDIP would finalize the draft law 
only after further input from interested parties, and not 
before the end of the year.  SDIP officials outlined their 
current thinking regarding possible legal changes, 
describing a kind of two-tier collective management 
system.  One "authorized" collecting society (or at the 
most two) would deal directly with all IP users.  This 
"authorized" society would collect royalty payments on 
behalf of rights holders, but distribute them to various 
other collecting societies operating in Ukraine, as 
designated by rights holders.  These second-tier collecting 
societies would then be responsible for returning the 
royalty payments to individual rights holders. 
 
¶5. Matt Skelton, from the U.S. Copyright Office, and Mihaly 
Ficsor, a highly regarded authority from the Central and 
Eastern European Copyright Alliance, cautioned the GOU 
against forms of mandatory or extended collective 
management.  If enshrined in Ukrainian law, such provisions 
 
could unfairly and inadvisably reduce the rights of 
copyright owners, they said.  Skelton also outlined other 
areas where Ukrainian royalty collecting societies could 
play a positive role, such as enforcement -- helping to 
bring pirates to court -- and lobbying -- advising the GOU 
on possible legislative changes. 
 
¶6. Boisterous disagreement quickly ensued.  The quasi 
state-run collecting society UASP recognized rights 
holders' complaints about its operations, but defended 
itself on the grounds that it was forming a new and 
improved collective management structure.  (Comment: We 
suspect that this UASP body is SDIP's preferred candidate 
to become the "authorized" collecting society sitting atop 
their envisioned two-tier system.  End Comment.) 
Representatives of the two IFPI-backed royalty collecting 
societies (the Ukrainian Music Rights League and the 
Ukrainian Music Alliance) criticized the current version of 
the draft Copyright Law amendment, and attacked UASP for 
collecting royalty payments without authorization of the 
true rights holders.  Ignat Berezhny, head of the Ukrainian 
Music Industry Association, emphasized the importance of 
international cooperation and urged the GOU to provide an 
English translation of any proposed Copyright Law 
amendments for IFPI's analysis and comment.  (Note: Post 
has similarly requested an English translation of the draft 
amendment so that the USG can review.  SDIP has promised to 
provide a translation after completing additional 
revisions, and before moving the draft forward through the 
government.  End note.) 
 
Alternative Enforcement Tactics 
------------------------------- 
 
¶7. Erik Wilbers, Acting Director of the WIPO Arbitration 
and Mediation Center, encouraged Ukraine to look to 
mediation as an alternative to costly and lengthy (Comment: 
and often corrupt) court proceedings.  Deputy Chairman of 
the High Commercial Court Viktor Moskalenko agreed that 
court-ordered alternative dispute resolution could be 
helpful, although several journalists present at the event 
expressed doubt that Ukrainian society was "ready" for such 
measures.  Wilbers responded that mediation and arbitration 
are in fact most useful in highly litigious societies. 
 
¶8. Todd Reves, from the U.S. Patent and Trademark Office, 
focused on border enforcement measures as a way to ease 
pressure on law enforcement and courts and, in effect, to 
get "the most bang for the buck" in combating piracy and 
counterfeiting.  Reves encouraged the GOU to use risk 
analysis in order to most efficiently screen imported 
goods. 
 
¶9. Microsoft rep Daniil Klyuchnikov noted that the 
corporation was shifting to educational and media 
activities throughout Ukraine's regions (rather than just 
Kyiv) as part of its reinvigorated anti-piracy campaign 
(ref A). 
 
Moving Towards Europe 
--------------------- 
 
¶10. Several speakers encouraged Ukraine to harmonize its 
IPR procedures more fully with Europe.  Jorg Weberndorfer, 
from the Office for Harmonization in the Internal Market 
(OHIM) urged Ukraine to consider adopting OHIM's standards 
for issuing trademarks.  Wilbers suggested that Ukrainian 
companies include provisions allowing for WIPO mediation 
when drawing up IP-related contracts.  Laura Pazeraite, a 
Lithuanian trademark lawyer, briefed on Lithuania's efforts 
to harmonize its trademark system with Europe and OHIM, 
providing a model for Ukraine. 
 
Capitalizing on Ukraine's Intellectual Potential 
--------------------------------------------- --- 
 
¶11. Paladiy and Viktor Ivchenko, Chairman of the State 
Agency on Investment and Innovation (more on this 
organization to be reported septel), highlighted promoting 
innovation as a GOU priority.  Econoff emphasized that 
increased IPR protection should be a cornerstone of any 
pro-innovation policy.  The conference also gave a range of 
 
industry reps, from mineral water producers to coal mining 
companies to software developers, the opportunity to 
explore how to better protect their intellectual property 
rights.  For example, Sergey Malenkov, from the mining 
equipment producer Dongiprouglemash, warned the audience of 
how his company had erred by failing to file for a patent 
on one particular invention quickly enough. 
 
Comment: Copyright Victory a Hollow One? 
---------------------------------------- 
 
¶12. Post had hoped that the revocation of the Oberih 
royalty collecting society's license, if it could only be 
held up in the courts, would lead to a significant 
resolution of collective management problems.  Indeed, we 
encouraged SDIP's move through a demarche on our concerns 
about Oberih (refs D and G), and during meetings of the IPR 
Enforcement Cooperation Group by urging the GOU to do more 
to address rights holders concerns (refs B-C).  It is clear 
that problems remain even after Oberih's demise, however. 
Oberih continues to operate, albeit now without the SDIP 
stamp of approval, as do other unscrupulous collecting 
societies.   Post also remains concerned by SDIP's penchant 
for government control over the collective management 
system and the prospect of a state-anointed "authorized" 
collecting society playing an exclusive role.  That said, 
SDIP's desire to reform the system to make it easier for 
the user to direct royalty payments to the proper rights 
holder is understandable.  We have made our desire to 
review any proposed copyright legislation very clear, and 
will follow up to ensure that Washington can review draft 
laws before they move through the legislative process. 
 
Thanks to USPTO and Copyright Office 
------------------------------------ 
 
¶13. Post sincerely thanks the U.S. Patent and Trademark 
Office (USPTO) and the U.S. Copyright Office for the 
participation of Todd Reves and Matt Skelton in the 
conference.  They added a much-appreciated level of 
expertise, as well as an American point of view, to the 
event. 
 
TAYLOR