Cablegate: Poland: Out of Cycle Review of Intellectual

VZCZCXRO2901
PP RUEHIK
DE RUEHWR #1211/01 3441801
ZNR UUUUU ZZH
P 101801Z DEC 09
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC PRIORITY 9243
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEHKW/AMCONSUL KRAKOW PRIORITY 2340
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS SECTION 01 OF 03 WARSAW 001211

SIPDIS

STATE FOR EUR/CE MGLANTZ AND MLIBBY
STATE FOR EEB/TPP/IBE TMCGOWAN, TO'KEEFE, AND JURBAN
STATE PASS TO USTR FOR JENNIFER GROVES AND DAVID WEINER
COMMERCE FOR HILLEARY SMITH AND MICHAEL ROGERS

E.O. 12958: N/A
TAGS: ECON ETRD KIPR PL
SUBJECT: POLAND: OUT OF CYCLE REVIEW OF INTELLECTUAL
PROPERTY RIGHTS

REF: A. A. WARSAW 259
B. B. WARSAW 225

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1. (SBU) Summary and Comment. We assess the Polish
Government's (GoP's) November 23 Out-of-Cycle review (OCR)
submission as credible. The GoP has tightened its efforts to
fight IPR violations, particularly with regard to internet
piracy, to strengthen public awareness of the value of IP,
and to build training capacity for prosecutors and judges.
Despite those improvements, counterfeit products continue to
be available at markets on the German border, though in
declining amounts. Renewed GoP efforts to fight IP
violations are responsive in part to USG and industry
concerns, but Poland's leadership appears increasingly aware
that a weak IP regime damages Poland's own efforts to build
innovation into the domestic economy. Post recommends Poland
be removed from the Special 301 Watch List.

2. (SBU) We understand that the OCR decision with respect
to Poland may be delayed to the spring. We strongly urge
against delay. Poland's presence on the Watch List since
2003, despite the dramatically improved IP protection regime
here, has weakened the list's value as a tool of engagement.
The present OCR motivated a robust GoP response to the
process. We fear the Section 301 process will lose all
credibility here should we fail to complete our end of the
process. End Summary and Comment.

Assessment of the GoP's Report
------------------------------

3. (SBU) The GoP's November 23 submission for the OCR is a
credible, detailed response to USG concerns as outlined in
the Section 301 Out-of-Cycle Action Plan for Poland. The
report shows stepped-up efforts

- against piracy in marketplaces and on the internet,
- to train specialized Polish judges and prosecutors,
- to better coordinate interagency efforts to fight piracy,
and
- to raise public awareness about the value of protecting
IP.

4. (U) The report asserts continued strong cooperation of the
police, border guards and customs officers in planning and
running enforcement actions at markets throughout the
country. The GoP credits, for example, engagement between
law enforcement and market operators - including operators of
border markets - with reduced distribution and smuggling of
optical media. Police, customs and border guards seized
goods worth over Euro 19 million (USD 28.1 million) in the
first half of 2009. The report credits law enforcement as
well as a move to internet distribution of digital content
with the general decline in the identification of counterfeit
IP in markets.

5. (SBU) Rights holders organizations in Poland -
International Intellectual Property Alliance-affiliate ZPAV,
Motion Picture Association of America-affiliate FOTA, and the
Business Software Alliance (BSA) - report they do not
question the report's data. The groups generally praise GoP
enforcement efforts as well as cooperation with the groups
themselves. They support the GoP claim that more effective
enforcement has driven down volume of goods and therefore of
seizures, including at border markets. FOTA's representative
shared his internal statistics with Econoff, which show that
out of 586 cases passed to the police through November 2009,
police have carried out 569 raids resulting in 551 criminal
proceedings. The largest seizures were seen in illegal DVDs,
DVD-Rs, and Sony Playstation DVDs. ZPAV's representative
pointed to a set of recent raids - and new ones in the works
- to underscore improvements of cooperation now taking place.

6. (U) The government has formed an "Internet Group" that
brings together the ministries of Justice, Interior, Finance,
and Culture with internet service providers (ISPs) to target
and coordinate enforcements efforts against internet piracy.
The Business Software Alliance's (BSA) representative in
Poland praises the increasing efficiency of the GoP's IP
protection efforts and its increasing focus on combating
internet piracy. That new focus led to the October take-down
of a massive, illegal file-sharing service receiving over two

WARSAW 00001211 002.3 OF 003

million hits per month. Police arrested two men operating
the service and seized the company's property. The Ministry
of Culture is also working to amend the Corporation Law to
enable the GoP to capture more effectively corporate and
business software piracy and peer-to-peer piracy cases.

7. (U) The GoP's report describes a stepped-up training
regime. One hundred and forty one judges were professionally
trained on IP law in 2009. In a separate program, another 60
judges will attend a new one-year post-graduate program in
Intellectual and Industrial Property Law in 2010. Polish
police and the Internet Group have created a dedicated
"Portal for Knowledge Management" and a specialized training
guide - "Methodologies in Disclosing and Combating
Intellectual Piracy on the Internet" - to support prosecutors
and judges in internet piracy cases. At the same time, the
report documents increased criminal proceedings, convictions,
and imprisonments. Discontinued or terminated cases are
down, and sentencing more often results in imprisonment.

8. (U) A newly formed Team for Counterfeit Medical Products
(CMP) is now integrated into the overall "Team for
Counteracting Infringements of Copyright and Related Rights."
The CMP brings together representatives of the National
Public Prosecutor, the Commander-in-Chief of the Police, the
Chief of the Sanitary Inspectorate, the Head of the Customs
Service, and the Health Ministry's Main Pharmaceutical
Inspector to coordinate and direct efforts against
counterfeit pharmaceuticals. The CMP is focused on internet
sales (the location of 80% of illegal sales), sex shops,
gyms, and market places. The team has supported and directed
enforcement actions, in conjunction with pharmaceutical and
sanitary inspectors from local governments, leading to
seizures of counterfeit erectile dysfunction drugs and
dietary supplements. Criminal prosecutions are underway in
the courts.

9. (U) The GoP has created a "Rights Protection Committee"
for the protection of IP rights related to the Euro 2012
soccer tournament, to be co-hosted in Poland. The
committee's aim is to better protect brands and trademarks
related to the Euro Cup by establishing working relationships
among national agencies and with authorities in hosting
cities well ahead of the competition.

10. (U) Although not documented in the report, the GoP has
also initiated an innovative new program of public education.
All students attending university in Poland must now attend
two semesters of classes on IPRs and patent/copyright
protection. The curriculum was designed by the Polish Patent
Office and requires a minimum mandatory attendance of 30
hours of classtime per semester. Classes are tailored to
suit the differing disciplines of students' home faculties.

11. (U) More traditionally, the GoP's Patent Office has
instituted a country-wide poster design competition to bring
awareness of the value of IP. The competition draws a very
large number of entries, as well as the sponsorship and
participation of pharmaceutical companies, government
ministries, and the World Intellectual Property Organization.
In a similar vein, the GoP adapted for use in Poland a World
Health Organization campaign against counterfeit drugs and is
preparing a campaign to protect IP-related rights in the Euro
2012 soccer tournament.

What Still Needs Work
---------------------

12. (U) Border Markets: Traffic in pirated goods continues at
some markets on the German border. Market operators are not
yet contractually obliged to prevent the sale of pirated
goods on their property, and rewriting contracts may take
several years to achieve. Nonetheless, law enforcement has
engaged with market operators, improving enforcement and
reducing volumes of pirated goods. One apparel company
representative with responsibility for both Poland and the
Czech Republic stated that the problem with border markets in
the Czech Republic "is three times worse than in Poland".

13. (U) Destruction: Rights owners continue to complain about
the complexity of the destruction of counterfeit goods seized
by customs officers. In order to destroy counterfeit copies
of trademarked goods, the owner of the seized goods has to be

WARSAW 00001211 003.3 OF 003

found within a ten-day period and must cover the cost of the
destruction. The owner often cannot be found, leaving rights
holders with the choice of paying out of pocket to destroy
goods or leaving fake goods in a customs warehouses. Other
EU Member States, such as Germany, have adopted a simplified
destruction policy that does not require the involvement of
the owner of seized goods, allowing the goods to be destroyed
right away. Polish rights holders want Poland to move to the
simplified destruction policy.

14. (SBU) Pharmaceuticals: The Ministry of Health continues
to avoid meaningful consultation with pharmaceutical
companies. However, the Ministry has opened itself -
modestly - to meeting with the representatives of U.S.
pharmaceutical companies' local association - the LAWG.
Deputy Minister Marek Twardowski met with the LAWG October
28, the second time in two quarters, to discuss a new
Reimbursement Act and regulations regarding prices and market
access issues.
FEINSTEIN

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