VZCZCXRO5503
PP RUEHIK
DE RUEHSM #0776/01 3481349
ZNR UUUUU ZZH
P 141349Z DEC 09
FM AMEMBASSY STOCKHOLM
TO RUEHC/SECSTATE WASHDC PRIORITY 4979
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 STOCKHOLM 000776 
 
STATE FOR JOELLEN URBAN 
 
STATE PASS TO USTR FOR DAVID WEINER AND KIRA ALVAREZ 
 
SIPDIS 
 
SENSITIVE PLEASE PROTECT 
 
TAGS: KIPR EINT ETRD ECON PGOV SW
SUBJECT: EU PATENT BREAKTHROUGH DURING SWEDISH PRESIDENCY AND 
GENERAL IPR/INTERNET PIRACY UPDATE 
 
Ref: A) STOCKHOLM 736, B) STOCKHOLM 733, B) STOCKHOLM 676 
 
STOCKHOLM 00000776  001.2 OF 003 
 
 
¶1. (U) Summary:  The EU Competitiveness Council, chaired by Swedish 
Trade Minister Ewa Bjorling, managed to broker a deal after over 40 
years of efforts to agree on a unified EU patent system.   Swedish 
Minister for Communications, Esa Torstensson discussed Swedish 
concerns about the ongoing ACTA negations at a meeting at USTR. 
Sweden is in the process of recruiting a National Coordinator within 
the Swedish Police, who will coordinate IPR related investigations. 
This will greatly facilitate the work for Sweden's two specialist 
prosecutors.  Furthermore, the Police authorities plan to have 
completed the recruitment of the 15 investigative officials during 
the first half of 2010.  Our industry contacts tell us that this is 
the key issue going forward -- far more important than IPRED. 
Notwithstanding, the IRPED-legislation (implementation of the EU 
Enforcement Directive) has spurred a 40 percent increase in DVD 
sales of newly released movies since the law entered into effect on 
April 1, 2009.  End summary. 
 
EU Patent breakthrough 
-------- ------- ----- 
¶2.  (U)  On December 4 the EU Competitiveness Council battled toward 
a so-called 'general approach' on a future patent system, together 
with an agreement on the basis of a draft regulation for European 
Union patents.  The issue has bogged down the European Commission 
and the Council for over 40 years.  Today, the cost of getting an 
EU-wide patent is eleven times that of getting the same protection 
in the U.S.  The Council conclusions also contain the main elements 
of a single European Patent Court that will try cases on both the EU 
patent and existing European patents.  In today's system, patent 
processes for one and the same invention must be conducted 
separately in each Member State.  The establishment of a single 
court could mean annual savings of up to USD 42 billion for European 
companies. 
 
¶3.  (U)  Leading the objections to the Swedish EU Presidency's 
proposal for a general approach was Denmark.  The Danes, though, 
finally withdrew their legalistic objections after it became clear 
that changes to the Swedish proposal would not be acceptable.  The 
Swedish 'general approach' on the EU patent regulation means a real 
breakthrough.  The all important issue of translation will now be 
left for agreement at a "later" date. 
 
¶4.  (U) The agreement paves the way for further discussion, under 
Spanish and other Presidencies, towards a future patent system. 
This would be based on two main pillars.  Firstly, a unified patent 
litigation system with exclusive jurisdiction for civil litigation 
related to patent infringements and validity of EU and European 
patents.  There would be a court of first instance comprised of a 
central division as well as local and regional divisions (in member 
states).  There would also be a court of appeal. 
 
¶5.  (U) Comment.  This is a major accomplishment of the Swedish 
Presidency.  It was the top EU Presidency priority of Trade Minister 
Bjorling.   The issue has been blocked for over 40 years.  Sweden 
made a serious effort to break the deadlock during its EU Presidency 
in 2001.  Although the tricky language question remains, it is 
likely that it will be possible to solve that piece separately. 
This breakthrough on a European patent is a welcome addition to the 
Swedish list of accomplishments during the Presidency, which 
includes the Lisbon treaty, the future leadership, climate 
financing, and the Stockholm Program.  End comment. 
 
ACTA 
---- 
¶6.  (U) Even though Asa Torstensson's Ministry, the Ministry of 
Enterprise, Energy, and Communication has no ACTA negotiations 
mandate; she raised the issue of openness and the ACTA during her 
visit to the United States.  She publicly summarized her trip as 
follows: "I was invited by Peter Cowhey (USTR) to describe the 
experience of the telecom-package, and the debate and discussion 
that followed.  I also described how a similar debate is now gaining 
force, as we discuss the ACTA texts -- without even having seen 
them.  That is why openness for the duration of the discussions is 
so important."   Torstensson further said she had explained to 
Cowhey that it will not be possible to reach ACTA conclusions which 
go beyond the scope of the telecom package.  "I explained the 
complexity of the issue of streamlining efforts on the telecom 
market, and the balance between regulations that ensure internet 
users' interests.  I also said that the telecom package has meant 
reinforcements of the rights of the internet users," Torstensson 
told reporters.  She also told Swedish reporters that she understood 
the U.S. position that negotiations must be kept secret and that she 
felt that Cowhey understood and respected her position as well.  The 
Swedish Justice Ministry has the lead on the ACTA negotiations, and 
ACTA was not the reason for Torstensson's visit but she still 
believes that "it is important to have as open negotiations as 
 
STOCKHOLM 00000776  002.2 OF 003 
 
 
possible.  We then avoid speculations on what the texts include or 
involve.  It is beneficial to all parties if negotiations can take 
place openly, as we then can remove our focus from issues which are 
not part of the ACTA." 
 
Sweden continues to strengthen IPR Enforcement structures 
------ ------ ------ ------ ------ ------ ------ ------ 
¶7.  (SBU) Justice Ministry contacts informally told us about an 
upcoming change of the organization for the two specialist 
prosecutors with national IPR competence.  The two will work under 
the International Prosecutors' Chamber at the Prosecutor General's 
office, together with the Specialist Unit for Corruption issues and 
the Internal Controls Unit.  This organizational change is much 
welcomed by the rights-holders organizations.  Furthermore, Swedish 
police are in the final stages of recruiting a National Coordinator, 
who will be responsible for channeling and prioritizing IPR related 
investigations.  This will have a great impact on the effectiveness 
of the prosecutors.  Another key part of the puzzle is the 
recruitment of additional investigative officials.  The Swedes have 
told as that they intend to have 15 dedicated investigative 
officials in place by the end of the first half of 2010.  A close 
contact at the Anti-Piracy Bureau told us that "this is all that 
matters now, IPRED and its effects are nothing compared to this." 
 
IPRED legislation works 
----- ------ ------ ---- 
¶8.  (U)  The Sodertorns District Court decided on December 4 that 
ISP Telia is obliged to hand over the identity of the customer that 
has been operating the website Swetorrent where thousands of IPR 
protected works have been made available (illegally) to 
approximately 20,000 users.  A number of Swedish movie corporations 
have, with the help of The Swedish Anti- Piracy bureau, requested 
that Telia hand over information about the identity of the persons 
behind the IP number which operates the Swetorrent site.  Swedish 
Anti-Piracy Bureau has previously warned the website operator but 
the operator continued its operation.  "It is no longer possible to 
protect illegal activity behind an IP number.  Today's decision 
shows that it is the owner of the copyright protected material who 
will be protected rather than the perpetrator," says Sara Lindback, 
Legal Counsel at the Swedish Anti Piracy Bureau, following the 
decision. 
 
¶91.  (U)  This is the second District Court ruling where ISPs have 
been forced to handover information on IP users.  The previous 
decision was turned over on appeal and is currently appealed to the 
Swedish Supreme Court, which has ordered that the ISP is not allowed 
to destroy information related to the suspected IP number. 
 
IPRED legislation effects felt 
------------------------------- 
¶10.  (U)  As previously reported, the IPRED legislation may have 
caused ISPs to remove IP numbers sooner rather than later, but there 
have also been benefits.  In Sweden sales of newly released DVDs 
have increased by 40 percent since the IPRED legislation went into 
effect on April 1, 2009.  According to the owner of the legal 
downloading site for movies, Film2home, downloads of movies have 
increased six-fold. 
 
¶11.  (U)  Although 40 percent is a huge number, the increase in 
sales might not be entirely a result of IPRED regulations.  The new 
movie "Men that Hate Women" have sold in 300 000, which is unusually 
high for any newly released movie in Sweden. 
 
¶12.  (U)  The Music Business is also experiencing an increase in 
sales; 18 percent during the first nine months of 2009.  The sale of 
hard copies increased by 9 percent whereas digital sales increased 
by 80 percent.  During 2008 music sales fell by 7 percent. 
 
¶13.  (U)  Other IPR news in brief 
 
--Portlane tracker still up 
 
Stockholm District Court decided not to order Internet Service 
Provider (ISP) Portlane to remove its tracker pending a legal 
hearing.  "To already prior to the legal hearing order the removal 
of a tracker would create a too great burden on ISPs," Jonas 
Forzelius (legal counsel for Portlane) explained following the 
decision. 
 
-- Voddler gets competition as another free streaming movie site is 
launched 
 
As previously reported, Voddler has been well received in Sweden and 
internet users are lining up to get access.  However, their instant 
success as a result of being the only service provider that provides 
movies without a cost may be threatened.  Another Entertainment 
Service Provider, HDMT.net, also providing streamed movies without a 
 
STOCKHOLM 00000776  003.2 OF 003 
 
 
cost was recently launched.  The site collects and compiles movies 
and series which are already available online, and stream them over 
their services.  The legality of the service has been questioned. 
 
BARZUN