VZCZCXRO5050
RR RUEHFL RUEHNP
DE RUEHRO #0227/01 0581459
ZNR UUUUU ZZH
R 271459Z FEB 09
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC 1680
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHFL/AMCONSUL FLORENCE 3496
RUEHMIL/AMCONSUL MILAN 9880
RUEHNP/AMCONSUL NAPLES 3669

UNCLAS SECTION 01 OF 04 ROME 000227 
 
SIPDIS 
 
STATE PLEASE PASS TO USTR FOR JENNIFER CHOE GROVES, LESLIE 
YANG, CHRISTOPHER WILSON 
STATE PLEASE PASS TO EEB/TPP/IPE JOELLEN URBAN, TIMOTHY 
MCGOWAN, ROBERT WATTS 
DEPT OF COMMERCE FOR SUSAN WILSON AND AMANDA WILSON 
DHS PASS TO ICE 
 
E.O. 12958: N/A 
TAGS: IT KIPR ETRD ECON EINT
SUBJECT: IPR SPECIAL 301 REVIEW -- MISSION ITALY INPUT 
 
REF: A. SECSTATE 8410 
     ¶B. ROME 143 
     ¶C. ROME 89 
     ¶D. 08 ROME 1337 
 
¶1. (U) Summary:  The fall of the Prodi government in 2008 
understandably interrupted what had been strong momentum on 
IPR issues in Italy. Post has recently seen a renewed 
executive branch determination to tackle IPR issues, in 
particular, on-line piracy.  Problems still exist, especially 
the current lack of "notice and take down" procedures, as 
well as in the failure to strike a balance between privacy 
concerns and protection of IPR. Moreover, weak data 
collection efforts hinder efforts to gauge the scope of IPR 
problems and to benchmark progress.  For these reasons, 
Mission recommends that Italy remain on the Special 301 Watch 
list and that the report mention the issues cited, together 
with attention to links between the Mafia and counterfeiting 
operations. We also recommend that this year's report 
acknowledge efforts the GOI has made and continues to make in 
drawing public attention to the IPR issue and in the 
integration of IPR into Italian foreign policy.  GOI contacts 
have repeatedly expressed disappointment in the 2008 Special 
301 report, specifically asserting that Italy was not given 
recognition for efforts to raise the profile of IPR 
protection in Italy.  Post acknowledges that strides were 
made in this area, but they have not been supported by 
tangible dissuasive actions by the judicial system. End 
Summary 
 
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Overview of IPR in Italy 
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¶2. (U) Italy has adequate IPR laws in place, but relatively 
few IPR cases are brought to trial.  Judges still regard IPR 
violations (particularly copyright violations) as petty 
offenses, and the magistracy can be said to be the weak link 
in combating IPR theft in Italy.  The Italian Finance Police 
(GDF) and Italy's Customs police (Dogana) are active and 
skilled investigators, but they are frustrated by the fact 
that few cases reach final sentencing.  Historically there 
has been a reluctance by judicial officials to impose 
deterrent penalties. A new bill already approved by the 
Chamber of Deputies and expected to be approved soon by the 
Senate will increase penalties for a range of crimes, 
including counterfeiting and piracy. While some judges still 
seem reluctant to view IP infringement as a serious crime, 
the GOI has made IP instruction part of the regular training 
that all judges must receive, and some high ranking members 
of the judiciary publicly supported the view that IPR crimes 
should be treated seriously. 
 
¶3. (U) Historically, the Italian government has viewed 
trademark infringement more seriously than crimes against 
copyright and has focused on getting illegal vendors off the 
streets. Recently, we believe we have seen a shift "up the 
food chain," with more attention on the distributors behind 
the vendors. Prosecutors in southern Italy say the sale of 
counterfeit items, including clothing, CDs, DVDs, software 
and even iPods, funds Mafia groups (especially the Neapolitan 
Camorra) and they see combating counterfeiting as a part of 
the fight against organized crime.  They also say that these 
counterfeit distribution networks are large and 
sophisticated, with branches in other European countries, 
Australia and the United States. 
 
¶4. (U) Though key figures in the government now seem to 
recognize the importance of IPR protection, Italy is still 
lacking a coordinated effort among government agencies. This 
is evidenced by a lack of balance between protection of 
privacy and protection of IPR, with privacy concerns favored. 
 In addition, there is a continued lack of a comprehensive 
action plan to protect intellectual property rights, or even 
a comprehensive data set detailing IPR infractions 
investigated and actions taken. 
 
 
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Examples of IP enforcement in 2008 
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¶5. (U) The GDF and Dogana are actively engaged in 
 
ROME 00000227  002 OF 004 
 
 
investigations and seizures throughout Italy. A few examples 
of large or significant seizures in 2008 include the 
following: 
 
-- In December police shut down a large counterfeit goods 
operation in Tuscany.  Chinese and Senegalese nationals were 
arrested and police seized one million products (clothes, 
bags and shoes).  Press reports put the value of the products 
at 55 million euros. Products were manufactured in China and 
were found in 19 warehouses in Tuscany.  For the first time 
in Tuscany, local magistrates levied Rico-style charges 
against members of the organization. 
 
-- Also in Tuscany, police seized nearly two million pairs of 
children's footwear with fake "true leather" labels that were 
found to have been manufactured with toxic materials.  In 
this case, magistrates charged Chinese distributors with 
crimes against public health and charged several Italians 
with fraud.  (Comment: Typically in Italy, IPR infringement 
is viewed more seriously when linked with organized crime or 
public health. End comment.) 
 
-- In Milan, a successful investigation by the Guardia di 
Finanza led to seizure of property (bank accounts, cars, real 
estate) owned by a network of clothing counterfeiters led by 
a group of Chinese. The network was headquartered in Milan 
but was active in Bologna, Florence and several other cities. 
The counterfeited property was worth $7 million. 
 
-- In Catania (Sicily), GDF agents closed down a 13,000 
square meter market of pirated and counterfeit goods in 
October 2008.  Thirty stands and over 80,000 articles of fake 
merchandise (including clothes, toys and electric appliances) 
were confiscated. 
 
-- Also in Catania, in December, the GDF confiscated some 
75,000 fake articles (mainly jewelry and watches) in the 
city's historic center. 
 
¶6. (U) In 2008 an Italian judge ordered Italian Internet 
Service Providers to block the Sweden-based file-sharing Web 
site "The Pirate Bay."  Though the blocking of the site was 
later deemed illegal, GOI contacts report that the Italian 
government used diplomatic channels to formally complain to 
the Swedish government about the site's illegal on-line 
activities. 
 
 
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GOI efforts, a pause (and frustrations) 
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¶7. (U) GOI officials have repeatedly told the Embassy that 
they do not feel adequate credit was given to their IP 
protection efforts in the last Special 301 report. In 
2007-2008 the Embassy worked intensively and successfully 
with the GOI to secure high level endorsement of IPR 
protection at the highest levels of government.  In addition, 
the Anti-Counterfeiting High Commissioner's office was 
actively raising the public profile of IP-related crimes. 
Post recognizes that this was a real step forward in 
government attitude and that momentum on IPR issues was high 
when the previous Prodi government collapsed in the Spring of 
¶2008. 
 
¶8. (U) This collapse stalled IPR protection efforts for 
months while elections were held and a new government 
organized.  Shortly after the formation of the new government 
under PM Silvio Berlusconi, the office of the 
Anti-Counterfeiting High Commissioner was closed for budget 
reasons.  The GOI asserts that the responsibilities of this 
office were not eliminated, but were folded into the Economic 
Development Ministry.  This may be the case, but the loss of 
this office lowered its profile and independence, and 
continues to be mourned by IP industries. 
 
¶9. (U) Despite this pause, some key figures in the government 
express determination to produce real results in IP 
protection.  In 2008, the Economic Development Ministry 
created a General Directorate for Intellectual Property to 
take on functions previously shared between the Italian 
Patent and Trademark Office and the Anti-Counterfeiting High 
Commission.  It is too early to judge the effectiveness of 
 
ROME 00000227  003 OF 004 
 
 
this change, however. 
 
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Tackling Internet Piracy 
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¶10. (U) Italy's G-8 presidency has provided an additional 
motivation to tackle on-line piracy. In early 2009, the GOI 
created an interministerial committee tasked with coming up 
with a workable action plan for tackling on-line piracy. 
Committee hearings with stakeholders are expected to begin in 
early March, and GOI contacts say they expect to see a plan 
that places some responsibility on Internet Service Providers 
and takes into consideration plans put forth in France and 
the UK.  In addition, the GOI is pushing "Internet 
Regulation" as a G-8 topic. While there has been some 
concern, especially among critics of the government, that 
this might translate into suppression of on-line speech, the 
GOI contends that the intention is to protect IP on-line and 
to combat other Internet crime.  The committee has also 
created an anti-piracy web site where industry and members of 
the public can monitor the committee's progress and comment 
on the issue. 
 
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Inclination to Protect On-line Privacy More than On-line IPR 
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¶11. (U) Alongside these positive steps have come some 
setbacks. Recent rulings from the Data Protection Authority 
(also known as the Privacy Authority) have effectively 
stopped investigation and prosecution of illegal downloading 
of copyrighted material (Reftel C). The Privacy Authority 
decided that monitoring of peer-to-peer traffic is a 
violation of privacy rights.  Monitoring of peer-to-peer 
traffic by rights holders had been the starting point of the 
majority of criminal cases made against illegal downloaders. 
IP industries say this decision seriously harms enforcement 
of copyright protection in Italy.  (Comment: Though the 
Privacy Authority is an autonomous body, an effort by the GOI 
to cooperatively examine IPR and Privacy Rights could lead to 
methods to protect both rights. The Privacy Authority appears 
unwilling to consider intellectual property rights as it 
makes its decisions and without an Authority looking out for 
IPR, this effectively places privacy above IPR protection. 
End comment.) 
 
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Additional Responses to Reftel A Points 
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¶12. (U) Enforcement statistics:  There is still a lack of 
uniform enforcement statistics since each enforcement agency 
keeps its own data and cases that pass from one agency to 
another may even be counted twice. In addition, there is very 
limited information available concerning judicial action 
related to IPR enforcement. 
 
¶13. (U) TRIPS implementation:  Italy's de jure IPR regime is 
compliant with the TRIPS agreement. 
 
¶14. (U) Data Protection: Though the pharmaceutical industry 
still disputes Italy's pharmaceutical pricing practices, the 
embassy has had no complaints from industry regarding the 
protection of pharmaceutical or agricultural test data. 
 
¶15. (U) Optical Media Piracy: While use of source 
identification codes is encouraged in the optical disc 
industries, their use is not mandated by law. 
 
¶16. (U) Use/Procurement of Government Software:  National 
government offices contain mostly legal software, though 
problems still exist at the local and regional level.  In its 
role as G-8 president, Italy is pushing for the G-8 
Intellectual Property Experts Group (IPEG) to adopt 
guidelines for government use of software in compliance with 
intellectual property rights.  A non-paper was submitted 
containing the guidelines and will be discussed for possible 
adoption at the next IPEG meeting in April. 
 
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Mission Efforts to Promote IPR Protection 
 
ROME 00000227  004 OF 004 
 
 
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¶17. (U) Over the last 15 or so years the Embassy and 
Consulates have organized successful IPR promotion efforts 
ranging from roundtables with key GOI figures, public 
speeches by the ambassador and others, to awards for 
successful enforcement action and seminars designed to 
sensitize the magistracy to IPR issues.  These programs have 
effectively raised the profile of IPR with GOI officials, as 
evidenced by the seriousness with which IPR and the Special 
301 list are now viewed.  In order to ensure that IPR 
protection in Italy is driven by Italians, who are best 
equipped to orchestrate successful IP action in their own 
country, the Mission is pushing IP industries in Italy to 
take the lead in programming events and in letting their 
concerns be known to officials.  Officers at the Embassy and 
Consulates continue to meet regularly with government 
officials to push for policy changes that will improve IPR 
protection, as well as with members of investigative services 
to monitor IPR protection in Italy and to offer consultation. 
 In addition the Embassy and Consulates continue to work with 
industry contacts to support them in their IPR promotion 
efforts.  Mission officials also raise awareness of the 
problems through both public and private comments. 
DIBBLE