VZCZCXRO1704
RR RUEHLMC
DE RUEHLM #0461/01 1331148
ZNR UUUUU ZZH
R 121148Z MAY 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 8107
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2013
RUEHKA/AMEMBASSY DHAKA 0877
RUEHIL/AMEMBASSY ISLAMABAD 7870
RUEHKT/AMEMBASSY KATHMANDU 6051
RUEHKP/AMCONSUL KARACHI 2345
RUEHCG/AMCONSUL CHENNAI 8476
RUEHGV/USMISSION GENEVA 2754
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 02 COLOMBO 000461 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/INS AND EB/TPP/IPE 
DEPARTMENT PLEASE PASS TO USTR 
NEW DELHI FOR USPTO DOMINIC KEATING 
 
E.O 12958: N/A 
TAGS: ECON ETRD KIPR EAID CE
SUBJECT: SRI LANKA: POLICE RAID VENDORS OF PIRATED SOFTWARE 
 
REF: 07 COLOMBO 128 
 
¶1.  (SBU) Summary:  On May 6, Sri Lankan police raided software 
dealers in a popular shopping mall in Colombo.  The raid was Sri 
Lanka's first intellectual property rights (IPR) enforcement action 
against pirated software dealers.  With uncommon swiftness, 
offenders were raided, charged, pleaded guilty, and convicted within 
24 hours.  Police vowed to continue the fight against piracy, but 
lack the budget to truly go on the offensive.  End summary. 
 
¶2.  (SBU) On May 6, the Colombo Crimes Division of the Sri Lanka 
Police raided three shops in Majestic City, the premier shopping 
mall in Colombo.  The Police acted on a complaint by the Business 
Software Alliance (BSA) on behalf of Microsoft Corporation.  The 
police seized about 400 illegal Microsoft CDs during the raid.  On 
May 7, less than 24 hours after the raid, the shop owners were 
produced in court, where they pleaded guilty.  They were fined 
Rupees 450,000 (approximately $4,100) each.  In addition, they were 
sentenced to six months imprisonment, suspended for five years. 
(Note: Maximum penalties for IPR violations in Sri Lanka include a 
fine of up to Rupees 500,000 ($4,600) and/or a prison sentence of 6 
months, but smaller penalties have been the norm.)  The shop owners 
also agreed to refrain from dealing in counterfeit Microsoft 
products.  The seized goods have been destroyed. 
 
¶3.  (SBU) Microsoft's office in Colombo is working with local 
partners to develop the brand's business here.  The firm therefore 
does not want to be seen as driving the crackdown.  As a result, it 
is working closely with the Business Software Alliance, which is 
driving the enforcement effort.  According to Sudath Perera, Senior 
Partner of Sudath Perera Associates and legal counsel/representative 
for the Business Software Alliance, this was the first raid on 
pirated software dealers in Sri Lanka.  A global software piracy 
study conducted for the alliance in 2007 revealed a very high 
software piracy rate -- close to 90% -- in Sri Lanka. 
 
¶4.  (U) According to industry sources, the intent of the raid was to 
create awareness of software intellectual property rights among 
dealers and businesses.  Police also said the raid was to send a 
strong signal to IPR violators of all kinds.  Anura Senanayake, 
Director of the Colombo Crimes Division of the Police, told 
newspapers that he strongly supported the raid and warned the 
private sector to stop using pirated software.  Newspapers quoted 
him saying, "I strongly encourage all computer dealers and software 
resellers everywhere to ensure that they only sell legal and 
original software to avoid facing the full consequences of the law. 
We will be conducting continued enforcement against software pirates 
until piracy is wiped out."  He also reminded businesses to respect 
the law of the country by purchasing and using original software. 
When contacted by EconFSN, Senanayake affirmed his statements and 
said he is willing to do more raids.  He encouraged rights holders 
to contact the police with their complaints. 
 
¶5.  (SBU) According to Sudath Perera Associates, the local 
magistrate and police were cooperative in issuing a search warrant, 
organizing the raid, and prosecuting the accused.  According to 
them, recent IPR awareness-raising programs organized by rights 
holder groups for judicial and police officers have helped to 
improve enforcement.  In March 2008, BSA organized an awareness 
program for police officers.  The American Chamber of Commerce of 
Sri Lanka carried out a similar training program for magistrates in 
¶2007.  Sri Lanka's National IPR office has worked with international 
experts, including the U.S. Patent and Trade Office and the World 
Intellectual Property Rights Organization (WIPO), to conduct 
seminars that have also raised awareness among government 
officials. 
 
¶6.  (SBU) The BSA/Microsoft action followed successful raids by 
Toshiba Corporation and Polo Ralph Lauren early this year.  Toshiba 
instigated raids on several shops selling counterfeit ink 
cartridges.  Polo has filed several court cases against 
manufacturers and retailers of counterfeit apparel.  In some cases 
the accused have pleaded guilty.  Other cases have proceeded to 
trial. 
 
¶7.  (SBU) Comment: Sri Lanka's overall IPR laws and regulations are 
strong, yet it remains far too easy to buy pirated goods throughout 
the country.  The arrests this month demonstrate that the government 
 
COLOMBO 00000461  002 OF 002 
 
 
is willing to make arrests and see them through to conviction when 
prodded by industry and stakeholders; unfortunately, it remains too 
dependent on such complaints and handholding.  To get to the point 
where its enforcement is routine, rather than exceptional, the 
government needs to give the police and National IPR office the 
budgets and the trained staff needed to truly combat IPR violations. 
 Embassy and USG agencies are providing much of the training, but 
with the government perennially in deficit, IPR enforcement budgets 
are unlikely to grow soon. 
BLAKE