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Viewing cable 07TALLINN66, ESTONIA: IPR WORKSHOP REVEALS SHORTCOMINGS AND

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Reference ID Created Released Classification Origin
07TALLINN66 2007-01-31 15:19 2011-08-25 00:00 UNCLASSIFIED Embassy Tallinn
VZCZCXRO3756
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTL #0066/01 0311519
ZNR UUUUU ZZH
R 311519Z JAN 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9472
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 03 TALLINN 000066 
 
SIPDIS 
 
STATE FOR EB/CBA, EB/TPP/IPE AND EUR/NB 
COMMERCE PLEASE PASS USPTO/OFFICE OF ENFORCEMENT 
HELSINKI FOR ECON 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN KIPR EN
SUBJECT: ESTONIA: IPR WORKSHOP REVEALS SHORTCOMINGS AND 
FORGES TIES 
 
REF 06 TALLINN 424 
 
1.  (U) Summary:  On January 17-18, Embassy Tallinn and the 
U.S. Patent and Trademark Office (USPTO) held a workshop 
focusing on copyright infringement in the digital 
environment.  The event was a rare coming together of 60 
Estonian police, prosecutors, judges, government officials, 
law professors and industry representatives.  The group 
discussed enforcement problems resulting from limits on 
investigative tools, the prosecutorial practice of dropping 
cases for lack of 'public interest', and the small size of 
the market.  Panelists shared valuable best practices and 
collaborated on techniques for pursuing internet-based IPR 
criminals.  The event received local TV and press coverage, 
and participants gave high marks to the interactive case 
study and mock trial.  End Summary. 
 
2. (U) At a two-day workshop titled "Criminal Enforcement 
of Intellectual Property Rights", sixty Estonian police 
officers, prosecutors, and judges met for the first time 
together to discuss and learn about IPR-related crimes and 
procedures.  The Enforcement Division of the U.S. Patent & 
Trademark Office (USPTO) sponsored the event.  The workshop 
focused on the digital environment, since internet piracy 
is a new and constantly evolving challenge to IPR 
enforcement in countries with well-developed IT sectors, 
such as Estonia.  This event was a follow-up to Embassy 
Tallinn's international IPR conference in April 2006, 
titled "Copyright Infringement in the Digital Environment" 
(Ref A).  USPTO, the FBI, DOJ, and the U.S. District Court 
for Southern New York sent panelists, as did the 
International Federation of the Phonographic Industry 
(IFPI), the Business Software Alliance (BSA), the Estonian 
Organization for Copyright Protection (EOCP), and the 
Patent Office of the United Kingdom.  The key judge, 
prosecutor, and investigator from a recent high-profile 
Finnish case discussed "Finreactor", Finland's largest 
peer-to-peer (P2P) piracy case, in which twenty-two people 
were convicted and ordered to pay damages of EUR 420,000 to 
music, film, and computer game companies. 
 
3.  (U) During introductory remarks, the Estonian Police 
Commissioner and the Deputy Under-Secretary on Criminal 
Policy for the Ministry of Justice both stressed the 
economic, cultural, and security reasons for engaging in 
the fight against piracy.  In their characterization, 
piracy not only costs industry billions each year, but also 
represents lost jobs and lost tax revenues.  Increasingly, 
they saw piracy as a source of income for organized crime 
syndicates, since the illegal copying and sale of IPR 
material is far safer and more lucrative than drugs or 
other crimes.  Robert Stoll of the USPTO noted that 
emerging artists -- and local cultures -- are hurt 
disproportionately by internet piracy because they, unlike 
industry mega-stars, cannot afford to continue performing, 
if pirates steal what should have been legitimate sales. 
 
Police find common ground; different techniques 
--------------------------------------------- -- 
 
4.  (U) The discussion panel on "Investigating IPR Crimes" 
generated the most interest from conference participants. 
All parties agreed that the hardest aspect of investigating 
illegal P2P networks is pinpointing the identity and 
location of a given internet provider (IP) address. 
Differences arose, however, when comparing the measures 
that law enforcement agencies can take.  Robert Herzog of 
the FBI said that giving false information, using an alias, 
pretending to be a file sharer or a hacker, using 
informants, even making illegal purchases in the pursuit of 
an investigation are all permitted in the U.S. - under 
prosecutorial oversight.  However, Estonian investigators 
said they cannot do such things without a court order from 
a pre-trial judge. According to Finnish prosecutor Antti 
Pihlajamaki, the police did not use undercover identities 
in the Finreactor case; one of the detectives used his own 
nickname in chat rooms to collect evidence, and did not 
provide false information.  While investigators in the 
Finnish case managed to gather sufficient evidence without 
going undercover, Estonian police and industry groups say 
the requirement to obtain such pre-trial court orders does 
pose an obstacle to law enforcement here - especially given 
the relative inexperience of judges in handling digital IPR 
cases. 
 
A Question of Priorities 
------------------------ 
 
TALLINN 00000066  002 OF 003 
 
 
 
5. (U) A bigger obstacle to the criminal enforcement of IPR 
is Article 202 of the Estonian Code of Criminal Procedure. 
This 'discretionary clause' allows prosecutors to drop 
cases they deem lacking sufficient public interest. 
According to local industry groups, this article is applied 
extensively in IPR cases, which are often dropped even when 
the industry brings evidence of a violation to law 
enforcement. When the IFPI panelist asked for an 
explanation of why prosecutors choose to drop IPR cases 
under this article, one responded that this is at their 
discretion and not for public discussion.  Prosecutors in 
the audience referred to criminal cases as an 
"extraordinary measure" and recommended that industry use 
civil courts instead.  U.S. panelists noted that although 
95% of IPR infringement cases in the U.S. are handled in 
civil court, it is important to utilize criminal 
prosecution occasionally - especially in cases of high- 
profile or repeat offenders - to send a message to would-be 
IP pirates. 
 
6.  (U) During a panel on "The view from private industry", 
the problems of small markets came up.  The panel noted, 
the major record and movie industry groups worldwide (IFPI, 
MPAA and trademark representatives) are less motivated to 
put resources into Estonia to combat piracy more 
aggressively.  Eva Tibar-Suvalav, representing Nike, said 
that many companies are reluctant to invest in combating 
counterfeit goods, because the cost of doing so is often 
greater than the losses due to such trademark 
infringements.  Nike, she said, is one of the few 
exceptions, and as a result it is virtually impossible to 
find fake Nike products in Estonia, yet counterfeits of 
other sportswear brands are still available.  Peter Scott 
of IFPI offered their highly sophisticated forensic DVD 
analyses lab in London as a service to law enforcement. 
Privately, however, he told us that IFPI has had to cut 
funding to the EOCP - the only anti-piracy organization in 
Estonia. Mr. Scott also described a novel enforcement 
approach being used by IFPI to go after one of the largest 
online digital piracy groups in Russia - follow the money. 
IFPI has obtained the cooperation of Visa, MasterCard and 
American Express to block transfers of funds into the bank 
accounts of the Russian website. Panelists observed, 
however, that those infringing IPR law in Estonia, are more 
often individual end-users, less likely to attract the 
resources of larger industry groups. 
 
7.  (U) The Judges' panel with U.S. District Judge Lewis 
Kaplan's presentation on the U.S. system was one of the 
highlights of the workshop, and revealed another key 
difference between the two legal systems: sentencing 
guidelines.  In Estonian courts, sentencing occurs 
simultaneous with the announcement of the verdict and is 
based on the Estonian penal code.  Participants were 
surprised to learn that U.S. judges are constrained by 
federal guidelines, which stipulate sentencing based on the 
specific circumstances of the crime brought into evidence. 
The result is that the U.S. system gives more leeway to 
prosecutors, while in the Estonian and Finnish system, 
judges have more discretion in the final outcome of the 
case.  Conference participants considered the subsequent 
interactive case study and mock trial to be very practical, 
as very few digital IPR cases in Estonia actually reach the 
trial and verdict stage.  The mock prosecution and defense 
gave near Oscar-winning performances during the trial, 
which the panel of Estonian, Finnish, and U.S. judges ended 
with a unanimous guilty verdict. 
 
8.  (U) Media coverage of the event raised awareness of the 
pervasiveness of internet piracy in this otherwise tech- 
savvy country. USPTO's Robert Stoll gave a 30-minute live 
interview on the popular Estonian morning program 
"Terevisioon", which was rebroadcast several times over the 
next few days.   The Russian-language newspaper "Molodjozh 
Estonii" and Russian-language TV evening news also covered 
the workshop, and the Estonian-language paper "Postimees" 
ran an op-ed by the Charge d'affaires on IPR protection the 
following week. 
 
9.  (U) Comment: The two-day USPTO workshop spurred greater 
understanding both by law enforcement and by industry of 
the challenges they each face, and the stakes involved, in 
digital IPR cases.  Further attention to IPR enforcement by 
local authorities is all the more important, because major 
international industry groups do not see enough incentive 
to step into such small markets to combat piracy.  Further, 
 
TALLINN 00000066  003 OF 003 
 
 
the structure of the Estonian legal system makes it even 
more important for judges to have a clear understanding of 
IPR enforcement.  Based on the turnout and high level of 
interest in the USPTO workshop, together with recent AmCham 
seminars on IPR (for both teachers and small businesses), 
we see progress on increasing awareness and compliance in 
Estonia with international IPR standards.  There is still a 
long way to go to bring down the high rates of digital 
piracy, but the new working-level relationships and 
experience coming out of this workshop will further the 
cause of IPR enforcement.  End comment. 
 
10.  (U) This cable was cleared by USPTO. 
 
GOLDSTEIN