VZCZCXRO6901
PP RUEHKN RUEHKR RUEHMJ
DE RUEHKN #0142/01 3170846
ZNR UUUUU ZZH
P R 130846Z NOV 09
FM AMEMBASSY KOLONIA
TO RUEHC/SECSTATE WASHDC PRIORITY 2384
INFO RUEHKR/AMEMBASSY KOROR 0360
RUEHMJ/AMEMBASSY MAJURO 0474
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RHHJJPI/PACOM IDHS HONOLULU HI
RUEHKN/AMEMBASSY KOLONIA 2753

UNCLAS SECTION 01 OF 02 KOLONIA 000142 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV FM
SUBJECT: IPR ISSUES IGNORED BY FSM GOVERNMENT; POPULATION DOESN'T 
ACCEPT THAT PIRATED DVDS ARE ILLEGAL 
 
¶1.  (SBU) SUMMARY:  The only movie theater in the FSM may close 
its doors because it cannot compete against readily available 
pirated DVDs.  Pohnpei State and the National Attorney General 
Offices concede that pirated DVDs are easy to obtain, but 
neither plans to take any action to limit their distribution. 
The state contends that the theater owner should file a 
complaint in the courts, which the owner's attorney believes 
they could not win.  End Summary. 
 
Movie Theater Raises Concerns 
----------------------------- 
 
¶2.  (SBU) On November 5, Brian Etscheit, the owner of the only 
movie theater within the FSM, Pohnpei Cinema, told Econ/ConOff 
that he may have to close.  The theater is located approximately 
400 meters from the U.S. Embassy in Pohnpei.  Etscheit stated 
that he cannot compete with the pirated DVDs that are now 
readily available throughout Pohnpei.  The theater previously 
made about $10,000 a month and was able to cover all of its 
expenses.  Etscheit contemplated projecting pirated DVDs onto 
his screens, noting that pirated movies arrive in the FSM before 
original movies and the equipment to project the DVDs are 
cheaper than operating the current equipment.  However, on the 
advice of his attorney, he decided not to pursue this option. 
 
¶3.  (SBU) By 2005 the last DVD/VHS store renting licensed 
movies, Movie Land, switched to pirated DVDs.  The number of 
visitors to the theater has dropped to such a point that 
Etscheit is now losing money on the theater.  His family asked 
that he keep the theater open and is providing financial 
support.  (Note:  The Etscheit family owns a number of 
businesses that are doing well, including an ACE Hardware and a 
grocery store.  End Note.)  Despite the support, Etscheit is 
already cancelling some showings simply due to lack of 
customers.  (Note:  During some showings Econ/ConOff was the 
only person in the theater.  Others in the expat community cite 
similar experiences when going to watch popular movies that are 
still playing in U.S. theaters.  End Note.) 
 
FSM's IPR Laws 
-------------- 
 
¶4.  (U) Code of the FSM, Title 35 explicitly protects 
copyrighted material.  Section 123 of Title 35 states "any 
person who infringes a copyright willfully and for purpose of 
commercial advantage or private gain shall be fined $10,000 or 
imprisoned for not more than one year, or both."  Per the World 
Intellectual Property Organization, the only IPR related treaty 
that the FSM has signed, but not ratified, is the Berne 
Convention. 
 
IPR Enforcement Unlikely 
------------------------ 
 
¶5.  (SBU) Econ/ConOff met with Pohnpei State Attorney General 
Scott Garvey (Amcit) and representatives for the National 
Attorney General's Office, Chief of the Division of Law Johnson 
Asher and Daniel Rescue Jr., on November 6.  Garvey explained 
that responsibility for IPR issues rests at the national level 
and that per the FSM Constitution National Attorney General "had 
exclusive rights only on what was made in the FSM."  There is no 
provision regarding materials copyrighted outside the FSM.  At 
the state level, there is some carry over from pre-1983 Trust 
Territory regulations.  According to Garvey, Pohnpei carried out 
a "codification of the common law," which basically focused on 
preventing forgeries.  He added, and Asher confirmed, that the 
FSM does not have the capacity to address patent issues. 
 
¶6.  (SBU) Garvey went on to say that, in his view, the FSM has 
purposefully kept some aspects of its IPR legislation weak.  For 
example, the FSM has made efforts to limit the ability of 
franchises to operate in the FSM.  Franchises have no trademark 
protections.  There is a "Wall Mart" and a "Best Buy" store in 
Pohnpei, but they are not affiliated to the U.S. brands.  The 
local NAPA and ACE Hardware stores, however, are tied to their 
U.S. counterparts.  If an unaffiliated NAPA or other company 
were to open, it is unclear if the original stores would have 
any protection on using the name exclusively. 
 
¶7.  (SBU) Asher and Rescue confirmed that there have been no 
trademark or copyright infringement prosecutions in the FSM to 
date.  Commenting specifically on the abundance of pirated DVDs 
within the FSM, Rescue stated people just are "not aware of the 
law."  If the copyright laws were ever enforced, people would 
quickly change their habits concerning pirated DVDs.  Asher 
conceded that perhaps the FSM should put some effort into public 
education on the matter.  These views coincided with Etscheit's 
comments that if the government made some effort to highlight 
 
KOLONIA 00000142  002 OF 002 
 
 
the illegality of pirated videos he would be able to compete. 
Etscheit believes even minimal fines or confiscation of some of 
the pirated DVDs would make a dramatic difference. 
 
¶8.  (SBU) When asked why there had been no prosecution of piracy 
cases to date, Asher stated that there is no case history for 
his office to rely upon.  Rescue opined that if Etscheit were to 
bring a case to court, it might create the case history on which 
the state could base future actions.  Asher cautioned, however, 
under current FSM law the courts may decide that the original 
authors would have to bring the case to court.  Etscheit, as a 
theater owner, does not have the legal standing to file a 
complaint. 
 
¶9.  (SBU) Asher and Rescue agreed that they would like to see a 
case brought before the FSM courts on copyright protection, 
saying the judiciary needs to address the issue.  The only 
option they currently see is for producers, of one of the films 
shown at Pohnpei Theater, to grant permission to Etscheit to 
represent the producer's interests in the FSM courts.  Asher and 
Rescue, however, are unsure how that would proceed in court. 
 
¶10.  (SBU) Etscheit, through his Attorney Stephen Finnen, tried 
to raise his concerns with the National Attorney General.  In an 
October 23, 2008 letter to FSM Attorney General Maketo Robert, 
Finnen asked that the "FSM take action on this issue."  At a 
minimum, Finnen requested the Attorney General's "opinion on the 
enforceability of overseas copyright laws in the FSM."  To date, 
there has been no response beyond stating that he would instruct 
Asher look into the matter. 
 
¶11.  (SBU) During a November 12 meeting, Finnen explained why 
Etscheit had not gone to court.  He, along with the state and 
national Attorney General Offices, were unaware of the FSM's 
obligations under any international treaties to protect foreign 
copyrights.  In addition, in any civil trial Pohnpei Cinema 
would have to prove damages.  Etscheit would be unable to 
provide baseline information comparing Pohnpei Theater ticket 
sales when movies are available on pirated DVDs vice when 
pirated DVDs are not available (every movie is available prior 
to the film's release in Pohnpei).   There is also a question of 
Etscheit's "standing;" it is not clear that he can bring the 
case forward. 
 
¶12.  (SBU) According to Finnen the goal of any case would be for 
Pohnpei Theater to be able to operate as a legitimate and 
hopefully profitable business.  Criminal enforcement against 
those pirating DVDs is the one measure he thinks would 
accomplish that goal.  Given the current legal climate in the 
FSM, Finnen does not anticipate positive changes anytime soon. 
 
Comment 
------- 
 
¶13.  (SBU) The local rumor mill is that the FSM does not want to 
enforce copyright laws.  There is no mechanism to copyright 
material within the FSM; therefore, all copyrights are foreign 
owned.  More to the point, the government seems to see the 
multitude of stores selling pirated DVDs as legitimate 
businesses that are providing employment in and service to the 
local community.  Without any push from representatives from 
outside the FSM, Post anticipates no movement to protect foreign 
copyrights within the FSM.  Thus, the only way Pohnpei Theater 
will remain open is if the Etscheit family, which is quite large 
and extended, decides to keep underwriting the theater on behalf 
of the community.  End Comment. 
DOUGLASSWD