VZCZCXRO2366
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #1346/01 3571322
ZNR UUUUU ZZH
R 221322Z DEC 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5808
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3723
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 MADRID 001346 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/WE, EEB/TPP/IPE, EEB/CIP 
STATE PASS USTR DWEINER 
USDOC FOR 4212/DCALVERT 
USDOC ALSO FOR PTO 
 
E.O. 12958: N/A 
TAGS: ETRD KCRM KIPR SP
SUBJECT: IPR IN SPAIN: ROUND-UP OF RECENT NOTEWORTHY 
ACTIVITIES 
 
REF: A. MADRID 1318 
     ¶B. MADRID 1194 
     ¶C. MADRID 1150 
 
MADRID 00001346  001.2 OF 003 
 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 
 
SUMMARY 
 
¶1.  (U) On November 25, Spain's Congress issued a non-binding 
resolution calling on the GOS to develop a strategy to combat 
internet piracy.  Separately, Culture Minister Molina 
announced that the government anticipates new regulations to 
protect online content.  Content providers continue to 
complain that the government is not doing enough about IPR 
infringement on the internet.  The Spanish chapter of the 
Business Software Alliance (BSA) released a survey that shows 
software piracy rates in Spain significantly higher than 
elsewhere in Europe.  The local BSA head, like other 
rights-holders, opines that the government is reluctant to 
press the telecommunications companies to do more to combat 
internet piracy, but that if concrete progress is not made 
soon, the government may see itself forced to act sometime in 
the next year.  The Anti-Piracy Coalition and the Internet 
Service Providers' (ISP) association are expected to give the 
Minister of Industry, Tourism, and Trade a bare-bones 
agreement on a graduated response mechanism by December 31. 
Rights-holders say the parties remain far apart on several 
key issues, and bridging the difference will be a challenge, 
but they expect the government to try to move quickly once an 
agreement is presented.  End Summary. 
 
NON-BINDING CONGRESSIONAL RESOLUTION 
 
¶2.  (U) On November 25, the Plenary of the Congress of 
Deputies (lower house of Parliament) communicated to the 
government the following non-binding resolution: 
 
"The Congress of Deputies, in accordance with the Conclusions 
of the European Council of Culture Ministers of November 20, 
2008 on development of legal offers of on-line cultural and 
creative content and the prevention and combating of piracy 
in the digital environment, urged the Government, in the 
Framework of the Inter-Sectorial Commission against Piracy, 
to promote an effective strategy, approved by consensus, to 
fight activities in the digital environment that violate 
intellectual property rights, based on agreement among all 
sectors involved: the content industry, internet operators, 
consumers, and users. 
 
"This strategy must ensure fair balance in the exercise of 
fundamental rights, particularly the right to the protection 
of personal data, freedom of expression and of access to 
information and communication secrecy, and defense of 
intellectual property.  Furthermore, this activity must be 
supplemented by promoting respect for intellectual property 
rights and support for the development of new markets and new 
marketing models for the cultural industry that are fully 
adapted to the digital environment." 
 
¶3.  (U) According to Salvador Soriano, Deputy Director for 
Information Society Services in the Ministry of Industry, 
Tourism, and Trade, the government did not initiate or 
sponsor the resolution.  Rather, it was the brainchild of a 
Spanish Socialist Workers' Party (PSOE - ruling party) deputy 
from Madrid, Rafael Simancas, spokesman of the Committee on 
Culture.  Soriano said the government was pleased with the 
resolution because it suggests that Congress may be receptive 
to whatever legislative proposals to provide stronger 
protection for digital content might result from ongoing 
discssions between content providers and ISPs..  Any such 
proposal is expected to be controversial, especially among 
internet users' associations, whose members tend to oppose 
vocally any initiatives that might restrict or limit their 
on-line activities.  Hoping to blunt such opposition, the 
government continues to press the ISP association, Redtel, 
and the Anti-Piracy Coalition to agree on measures to protect 
content online.  While the parties are making progress in 
their negotiations, they remain far apart on several issues, 
especially legal requirements needed to implement an 
agreement and the nature of a collaborative business model 
between service and content providers to make 
copyright-protected material legally available online. 
 
 
 
MADRID 00001346  002.2 OF 003 
 
 
CULTURE MINISTER SAYS NEW ANTI-PIRACY MEASURES COMING SOON 
 
¶4.  (U) In a December 17 speech, Minister of Culture Cesar 
Antonio Molina said different approaches for sanctioning 
repeat IPR offenders are being considered and that the GOS 
expects to introduce new regulations in the not-too distant 
future.  The Minister acknowledged that the measures will be 
unpopular but commented that "what is really unpopular, 
ruinous, and a disaster is that the thousands of jobs 
generated by culture could disappear as a result of this 
illegitimate activity."  Characterizing internet piracy as "a 
termite that is destroying an entire industry network," 
Molina noted that the issue is the subject of frequent 
discussion among EU Ministers.  (Comment: We believe Molina 
was referring to the GOS preparing to respond to an expected 
joint request from Redtel and the Coalition for it to take 
certain measures, and not to a separate effort.  End 
Comment.) 
 
 
BUSINESS SOFTWARE ALLIANCE RELEASES STUDY 
 
¶5.  (U) On December 10, the Spanish chapter of the Business 
Software Alliance (BSA) released a study on software piracy 
that ranked Spain in 12th place worldwide in 2007 with losses 
of USD 900 million generated by software piracy.  The study 
found that over the past five years, Spain has been 
consistently 8-12 points above the western European average 
in percentage of software pirated, with a 43 percent piracy 
ratio in 2007 as opposed to 33 percent for western Europe. 
 
¶6.  (U) According to Luis Frutos Miralles of Sage Spain, 
President of the Spanish chapter of BSA, business software 
piracy in Spain comes in three forms.  First is the 
traditional practice, especially prevalent among small and 
medium-sized enterprises, of purchasing one license and 
distributing the software package to multiple employees.  The 
national government does not pirate software in this way. 
BSA is less certain about the autonomous community 
governments but believes that their compliance is generally 
good. There are, however, a number of municipal governments 
that BSA suspects of using pirated software, and Frutos said 
further public education efforts are needed to bring these 
towns into line.  BSA regularly conducts campaigns aimed at 
small and medium-sized businesses and is working to expand 
its outreach to regional and local governments as well. 
 
¶7.  (U) Another source of piracy is for authorized 
distributors, often in an effort to increase their 
competitive advantage, to give away or sell at nominal prices 
software as part of hardware installations and other 
commercial agreements.  Software companies, Frutos said, have 
trouble policing all their distributors and enforcing the 
terms of their contracts, and wondered if this was also a 
problem in the U.S. or in other EU countries. Finally, Frutos 
said, the volume of illegal downloads of protected software 
on the internet is source of growing concern. 
 
¶8.  (SBU) BSA is not a member of the Anti-Piracy Coalition, 
which comprises mostly movie and music companies and 
copyright management societies; the local entertainment 
software alliance has only just joined.  However, in talking 
about digital piracy and the government's efforts to curb it, 
Frutos spoke in much the same terms as representatives of 
PROMUSICAE or the Motion Picture Association (MPA) or the 
General Society of Authors and Publishers (SGAE - see 
septel).  He said BSA has developed a proposal to send 
warning letters to infringers, which it plans to present to 
ISPs and the government.  In his view, Telefonica and the 
other major telcoms, which own the ISPs, are driving a very 
hard bargain and resisting any commitment that would require 
them to monitor or police their customers.  The GOS, 
especially the Ministry of Industry, Tourism, and Trade, is 
reluctant to force the telecoms to do anything against their 
will.  At the same time, the government wants the telecoms to 
show more flexibility so that the government can avoid 
intervening overtly to impose a solution.  Frutos predicted 
that the situation will remain frozen until at some point in 
the next year the government sees itself forced to take some 
sort of forceful action against piracy. 
 
COMMENT 
 
¶9.  (SBU) The recent GOS-sponsored Digital Content (FICOD) 
 
MADRID 00001346  003.2 OF 003 
 
 
and IPR Conferences and the launch of the Ministry of 
Culture's public education campaign (ref A) appear to have 
foreshadowed a series of other IPR-related events which have 
increased public attention to the issue.  The Congressional 
resolution, while non-binding, shows that legislators 
understand the need for action.  The Ministry of Culture, 
which sees artists as entertainers and their representatives 
as important constituents, understands how serious the piracy 
problem is and wants the government to be more proactive in 
addressing the issue, as evidenced by the Minister's remarks 
that new regulations are coming.  However, another key 
player, the Ministry of Industry, Tourism, and Trade, remains 
somewhat less forward-leaning, and the GOS as a whole 
continues to defer action pending an agreement between the 
ISPs and rights-holders.  The new President of the 
Anti-Piracy Coalition and the local MPA representative told 
us last week that Industry, Tourism, and Trade Minister 
Miguel Sebastian wants to see an agreement by December 31, 
and that the parties will oblige by presenting a bare-bones 
document that lists some areas of agreement on development of 
a graduated response regime, but both noted that the parties 
remain far apart on several critical issues related to 
implementation.  They believe, however, that the government 
may move quickly once this new agreement is presented.  End 
Comment. 
AGUIRRE