VZCZCXRO8966
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSF #1365/01 3451526
ZNR UUUUU ZZH
P 111526Z DEC 07
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC PRIORITY 4583
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 SOFIA 001365 
 
SIPDIS 
 
STATE FOR USTR LMOLNAR, JCHOE-GROVES 
STATE FOR EB/IPE JURBAN, SWILSON, JBOGER AND EUR/NCE MTURNER 
 
COMMERCE FOR SSAVICH 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON KIPR BU
SUBJECT: BULGARIA:  IPR UPDATE 
 
¶1.  (SBU)  Summary:   Bulgaria continues to make progress on IPR 
after being removed from the Special 301 List in 2007.  The GOB's 
highly effective inter-agency IPR Council continues to perform well. 
 The Cyber Crime Unit of the Ministry of Interior continues to take 
proactive measures against internet piracy.  The Ministry of Culture 
has increased its copyright inspections of entertainment 
establishments five-fold.   The Department of Justice's Intellectual 
Property Law Enforcement Coordinator (IPLEC) for Eastern Europe, 
based in Sofia, arrived in November and is working closely with GOB 
officials on IPR enforcement -- the weakest link in Bulgaria's IPR 
regime.  End Summary. 
 
IPR COUNCIL BACK TO WORK 
------------------------ 
 
¶2.  (SBU)  The GOB's intergovernmental IPR council is charging ahead 
after a summer hiatus following the resignation of the council's 
chair, Deputy Minister of Culture Ina Kileva, in May.  The Council's 
productive work, along with Ms. Kileva's strong personal effort, 
were instrumental in Bulgaria's removal from the Special 301 List in 
April.  The new Deputy Minister of Culture is Yavor Milushev, a 
former actor and MP from the party of former king Simeon (NMS), a 
governing coalition partner.  Milushev has experience in ushering 
IPR legislation through parliament, and, as one of Bulgaria's most 
famous actors, boldly touts his affinity for the IPR cause.  With 
Mr. Milushev at the helm, for the first time since the Council was 
established in January 2006, the U.S. Embassy has been invited to 
attend IPR Council meetings as an observer. 
 
INTERNET PIRACY A PRIORITY 
--------------------------- 
 
¶3.  (SBU)  In a widely-publicized case last March, the Ministry of 
Interior's Cyber Crime Unit, led by the professional and energetic 
Yavor Kolev, raided the offices of four major torrent sites in 
Bulgaria that were providing platforms for peer-to-peer (P2P) 
sharing of music, films and software.  Since the closure of these 
sites, police statistics show a dramatic decrease in the uploading 
of new content from Bulgarian-based sites.  The police and the 
Investigation Service of the Ministry of Justice have launched 
investigations of the owners of the sites bol.bg, data.bg, 
zamunda.net, and arenabg.com.   Our contacts at the Ministry of 
Interior tell us that the torrent sections of bol.bg and data.bg are 
no longer in operation.  The torrent site of zamunda.net continues 
to operate, hosted by a Dutch server and registered under a Syrian 
name.  The torrent site of Arenabg.com continues operation, but 
until recently was located in Texas. 
 
¶4.  (SBU)  Yavor Kolev tells us that with the closure of the large 
torrent sites listed above, his Cyber Crime Unit is now focused on 
combating smaller-scale Internet Service Providers (ISPs).  A total 
of 23 Tera Bytes (equivalent of 38,000 CDs) were seized between 
October 18 and November 28, 2007, when police raided the offices of 
three local ISPs in Sofia and Bansko (Southwest Bulgaria).  Police 
launched investigations against all three owners. 
 
COPYRIGHT ENFORCEMENT GAINS PACE 
-------------------------------- 
 
¶5.  (SBU)  The Ministry of Culture increased five-fold its 
inspections of cafes, retail establishments and computer halls in 
October and November.  Inspectors are checking whether contracts for 
use of copyright products are in place and whether owners have paid 
required fees.  To further strengthen contract enforcement, the 
Ministry of Culture is planning to meet with importers and producers 
of copyrighted products to design an effective mechanism for payment 
of copyright fees.  The Ministry of Economy and Energy held a 
similar IPR strategy session with industry and foreign government 
representatives on December 10.  In addition, a proposed change to 
the copyright law will identify more clearly the roles of the 
organizations for collective management of rights, voluntary 
membership organizations of authors and producers, and their 
involvement in the fee collection.  Finally, according to our 
contacts, by the end of 2007 the Council of Electronic Media (CEM) - 
the government's regulatory authority - will check all radio 
stations and TV channels across the country to ensure they have in 
hand signed contracts for playing music and other copyrighted 
material. 
 
 
RAIDS AND SEIZURES CONTINUE 
--------------------------- 
 
¶6.  (SBU)  The Economic Police at the Ministry of Interior reported 
they seized 28,000 pirated optical disks (ODs) and 4,000 magnetic 
disks between June 1 and October 30, 2007.  In the last 3 years the 
 
SOFIA 00001365  002 OF 002 
 
 
Economic Police tracked down five DVDR and CDR production 
facilities, with the latest successful raid in the town of Pomorie 
(South Black Sea) in August, 2007.  In November, the Customs 
Administration seized over 2000 illegally imported copies of the 
Windows operating system.  From January to October 2007, the Customs 
Administration seized over 1,300 counterfeited goods for violation 
of industrial property rights (logo, brand name, etc.), in 
comparison to a total of only 300 counterfeited goods seized in 
calendar year 2006. 
 
CHALLENGES REMAIN 
----------------- 
¶7.  (SBU)  The local IFPI representative office has informed us that 
three of the nine operating CD/DVD production facilities have 
refused industry representatives access to their plants.   When we 
raised this issue in November, Deputy Economy and Energy Minister 
Lachezar Borissov said that new legislation would have to be drafted 
in order to even make it legally possible for industry 
representatives to accompany Economy Ministry officials on their 
inspections.  Borissov said that his Ministry performs one 
inspection approximately every 15 days (for a total of 20 from 
January to October, 2007) and they have not found any new illegal 
production, although they do discover administrative violations from 
time to time. 
¶8.  (SBU)  The most serious concern on the IPR front is enforcement. 
 Our industry contacts complain that certain Ministry of Justice 
investigators and prosecutors consistently cause unreasonable delays 
during pre-court investigations.  The majority of IPR cases are 
still stuck in the pre-court phase or are argued against "an 
undisclosed perpetrator," although the police claim that they have 
enough evidence to bring cases against specific individuals.  In 
addition, judges need to be educated and convinced of the importance 
of deterrent sentences issued for IPR offenders.  Fortunately, the 
U.S. Department of Justice's Intellectual Property Law Enforcement 
Coordinator for Eastern Europe, who is based in Sofia, arrived in 
November and is beginning to work with GOB officials to enhance 
their capability to prosecute IPR crime. 
 
¶9.  (SBU)  Comment: Bulgaria continues to improve its IPR regime 
following its removal from the Special 301 Watch List in 2007.   Our 
industry contacts tell us they consider the IPR situation in 
Bulgaria relatively stable, although there is much work still to be 
done.  With the new DOJ IPLEC now in place, we are well positioned 
to assist Bulgaria in the area where it needs help the most -- 
enforcement. 
 
BEYRLE