VZCZCXRO0387
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSF #0522/01 2131456
ZNR UUUUU ZZH
P 311456Z JUL 08
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5289
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 SOFIA 000522 
 
SENSITIVE 
SIPDIS 
 
STATE FOR USTR MOLNAR, JCHOE-GROVES, EEB/TPP/IPE JURBAN, 
SWILSON AND JBROGER; COMMERCE FOR SAVICH AND ITA/MAC/OIPR 
CPETERS 
 
E.O. 12958: N/A 
TAGS: ECON KIPR ETRD BU
SUBJECT: IPR IN BULGARIA:  MODEST PROGRESS ON A BUMPY ROAD 
 
REF: 07 SOFIA 1365 
 
¶1.  (SBU) SUMMARY:  The GOB continues to make progress on 
intellectual property rights (IPR).  Industry and government 
are working in tandem to draft amendments to the copyright 
law, and the Ministry of Culture recently brokered a deal 
between rights holders and the tourist industry on royalties. 
 The Ministry of Interior's Cyber Crime Unit has launched 
several significant raids, seizing record numbers of illegal 
music and movies in the first half of 2008.  But,  industry 
has effectively lost its seat on the Intergovernmental IPR 
Council and major IPR cases still have not made it to court. 
End Summary. 
 
INDUSTRY-GOVERNMENT RELATIONS 
 
¶2.  (SBU) The Intergovernmental IPR Council continues to push 
through legislation and improve cooperation between 
enforcement bodies.  It made a misstep in early spring when 
Deputy Minister of Culture Yavor Milushev restricted Council 
membership to representatives of government entities (NB: 
including a U.S. Embassy representative).  Instead of meeting 
during council meetings, industry representatives now meet 
separately with Deputy Minister Milushev a day prior to 
intergovernmental meetings.  Milushev then raises industry 
concerns with the full council the following day.  Milushev 
took this action because he believed council meetings were 
becoming unmanageable and inefficient with multiple industry 
and rights holders' participation.  He argued that the new 
consultative mechanism with industry would offer rights 
holders more opportunity to discuss their concerns directly 
with Milushev, the intergovernmental Council chair.  Industry 
disagrees.  Ina Kileva, Chair of the Bulgarian Association of 
Music Producers, is spearheading industry efforts to regain 
Council observer status.  We support her efforts. 
 
¶3.  (SBU) Industry-government cooperation is otherwise 
improving.  Minister of Culture Stefan Danailov recently 
withdrew draft amendments to the copyright law that industry 
firmly opposed.  Now, Kileva and her association are working 
closely with the Ministry of Culture to formulate new draft 
amendments that would take a more comprehensive approach to 
copyright.  At industry's urging, Danailov has publicly 
called for both wider public debate on the new draft law and 
improved cooperation between the government and civil sector. 
 
 
¶4.  (SBU) Additionally, Deputy Minister Milushev recently 
arranged a meeting between the Hotel Business Association 
(which includes 80-90 percent of all hotel and restaurant 
owners on the Black Sea coast) and the association that 
represents music composers and collects copyright fees on 
their behalf.  Due to Milushev's efforts, the two sides 
settled on a Framework Agreement which will compel each hotel 
and restaurant to sign an individual contract with the 
composers' association.  In exchange for signing the 
agreement, these businesses will receive a discounted price 
on the copyright fee.  Until now, these businesses had been 
playing music illegally. 
 
ENFORCEMENT EFFORTS 
 
¶5.  (U) The Cyber Crime Unit of the Ministry of Interior 
continues to carry out high profile operations.  It completed 
its biggest raid yet in January 2008, seizing a total of 25 
terrabytes (TB) of illegal music and movies in Dobrich 
(Northeast Bulgaria.)  In May, the Unit searched the office 
of an Internet Service Provider (ISP) in Haskovo (Southeast 
Bulgaria) and seized a total of 6.5 TB of illegal content. 
On June 19, the Crime Unit made yet another large raid in 
Varna, seizing illegal software worth USD 200,000, 21 
computer terminals, and a server.  To date this year, more 
than 35 TB of illegal content has been seized, compared to a 
total 50 TB in all of 2007. 
 
¶6.  (SBU) Despite these successes, Cyber Crime Unit head 
Yavor Kolev tells us he does not have the necessary staff -- 
the Unit is comprised of 12 officers -- to adequately address 
IPR violations in Bulgaria.  The MOI is currently undergoing 
restructuring and we are urging the GOB to dedicate the 
necessary resources to IPR violations. 
 
JUDICIARY:  STILL THE ACHILLES' HEEL 
 
¶7.  (SBU) In March 2007, the Cyber Crime Unit shut down four 
major torrent sites -- Arenabg.com, Zamunda.net, Data.bg and 
bol.bg (reftel).  Bol.bg and Data.bg remain closed.  The 
 
SOFIA 00000522  002 OF 002 
 
 
owners of Arenabg.com and Zamunda.net were arrested and then 
released by the courts after two days detention pending 
further investigation.  Shortly thereafter, both sites 
reopened.  Cases against the owners of the two sites are 
still in progress.  Arenabg.com is the first torrent tracker 
case in Bulgaria, but its entry into court has been delayed 
by a technical mistake on the part of the prosecution. 
Arenabg.com's owner, Elian Geshev, still faces charges of 
"aiding and abetting" the illegal distribution of large 
amounts of illegal content.  The case against the owners of 
Zamunda.net remains trapped in the investigation process. 
Both sites remain popular.  Cyber Crime Unit efforts to shut 
them down permanently have been frustrated by zamunda.net's 
re-registration in the Netherlands and arena.bg's continuous 
relocation of its registration site. 
 
EMBASSY AGENDA 
 
¶8.  (SBU) With courts remaining the weakest link in 
Bulgaria's IPR regime, we continue to encourage improved 
judicial performance.  In addition, DOJ's regional 
coordinator for IPR is advising a recently-formed working 
group of police, prosecutors and industry representatives to 
address key IPR issues.  First, the working group will 
examine whether the criminal code could be amended to allow 
for sampling of seized pirated goods for the creation of 
expert reports, as is the current practice in the United 
States and much of Western Europe. Second, it will examine 
whether Serbia's successful implementation of an expediter 
procedure law should be replicated in Bulgaria.  This law 
allows police to make smaller, street-level raids of pirated 
goods.  In exchange for immediate confession, the violator 
would pay an administrative fine, which acts as a 
disincentive for first-time offenders and does not require an 
expert report or lengthy trial. 
 
¶9.  (SBU) The Embassy and Department of Justice continue to 
offer IPR-related training opportunities for police and 
prosecutors.  In March of this year DOJ participated in a 
government-organized workshop for police on internet crimes. 
Forty Bulgarian officers participated in the event, including 
at least one cyber-crime officer from each of Bulgaria's 28 
districts.  DOJ also recently completed a two-day training 
session for 20 prosecutors, which included a section on 
electronic evidence.  Of those in attendance, only one had 
ever previously utilized electronic evidence in a case. The 
Embassy is also developing an IPR-focused Volunteer Visitor 
Program for police and prosecutors for FY 2009. 
 
¶10.  (SBU) Comment:  Bulgaria continues to make incremental 
progress on IPR issues, with the judiciary stuck in a 
stutter-step.  We will continue to focus our efforts on 
urging better industry-government cooperation, increasing IPR 
enforcement capacities within the Ministry of Interior, and 
providing training to representatives of Bulgaria's perennial 
weak-spot, the judiciary. 
Karagiannis