● 09.15.11

●● Cablegate: Microsoft’s “Relationship With the Government” and Pressure for Countries to Adopt Intellectual Monopolies Using Shame Lists

Posted in America, Cablegate, Microsoft at 6:03 pm by Dr. Roy Schestowitz

Summary: A collection of almost a dozen cables showing how sanctions and lists of shame are being used to help plant seeds for Microsoft et al. all around the world

TODAY we are going to go through a lot of material and summarise everything of relevance upfront. We will start with Turkey's sanction siege, which was intended to make it more West-esque so as to benefit multinationals (mostly US-based companies). Turkey is not alone and today we’ll deal with 4 countries as examples of interest from all around the world.

Turkey's sanction siege

Turkey is being put on shame lists, where laws need to be changed n order to get the country off those lists. Think along the lines of sex offenders list, terrorists watchlist, “wanted” mug shots at the police station, server/IP blacklist, etc.

In the first cable, under ¶7, Turkey is mentioned in relation to the BSA. To quote:

As noted in ref A points, the GOT requires that all software used on government computers be licensed. However, Turkey’s chapter of BSA has heard anecdotally that the estimated piracy rate on government computers is approximately 50 percent. They emphasized to us, however, that they believe that the government is acting in good faith and trying to eliminate pirated software use by government officials. Comment: The head of the Turkey office of a major U.S. software producer told us that he doubts the utility of such proclamations in relatively more-developed countries like Turkey and agreed that the Government is working to reduce internal piracy. He also said that an agreement had more symbolic than practical value, given that there is no centralized point for government software procurement. In 2006, Microsoft CEO Bill Gates visited Turkey and announced his plans to support a techno-park in Istanbul and invest more in Turkey, which he characterized as a regional technological base. Microsoft and other companies, like Cisco, have close cooperative relationships with the government of Turkey.

Later on we find examples from Serbia and Montenegro, staring with a cable in which ¶11 says:

On February 1, 2006, Montenegrin Prime Minister Milo Djukanovic together with Bill Gates signed a three-year contract, providing software licenses to Montenegrin educational and scientific institutions. In September 2005, the GoM and Microsoft concluded a USD 2.36 million contract, creating a strategic partnership between the GoM and Microsoft for legalization of all the Microsoft software being used by state institutions. By mid-March, Microsoft and local governments in Montenegro will have completed the licensing of software used by the municipalities.

In the next cable, under ¶5 which has the heading “Microsoft Engages in Montenegro”, it says:

(U) Microsoft is working with the GoM and with private business to increase the use of licensed software in Montenegro. After meeting with PM Djukanovic, Bill Gates announced Microsoft would provide software on favorable terms to Montenegro’s educational and scientific sector. In the private sector, Microsoft will team with NGO Montenegro Business Alliance to educate business about intellectual property rights.

The Business Alliance is Microsoft’s thug. Microsoft uses it to distance itself from enforcement (imprisonment, fining, etc.) and bad PR.

Moving on to a cable from Indonesia , in ¶7 we find that

On January 13, the Ministry of Information and Communications Technology and Microsoft signed an MOU on legalizing all GOI Microsoft software. President Yudhoyono, on his own initiative, personally led the effort to sign the MOU, following his 2005 meeting with Microsoft Chairman Bill Gates. It is estimated that 90 percent of GOI computers use pirated versions of Microsoft operating systems and software.

Bill Gates sure gets around, does he not?

Another Cablegate cable, this one also about the “SPECIAL 301 INITIATIVE RESPONSE,” comes from Slovakia and in ¶9 it says:

According to industry experts, software piracy has noticeably decreased in Slovakia. Microsoft’s Bill Gates said during his visit to the country in January 2004, “We have registered a decline in software piracy in Slovakia.” Based on the Microsoft’s Enterprise Agreement with the GOS signed in 2002, all copyrights of Microsoft software being used in the state administration have been purchased by Slovak authorities for a total of USD 13 million (representing a 65 percent discount on the regular price). In 2001, a similar agreement was signed between Microsoft and the Slovak Chamber of Physicians and in 2004, Slovakia joined Microsoft’s worldwide project “Partners in education.”

Got to love Mr. Gates and his ‘charity’, changing laws around the world, for power and profit. Here are the cables in question. From Turkey:

VZCZCXRO5837

RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV

DE RUEHAK #0128/01 0231535

ZNR UUUUU ZZH

R 231535Z JAN 07

FM AMEMBASSY ANKARA

TO RUEHC/SECSTATE WASHDC 0661

INFO RUEHIT/AMCONSUL ISTANBUL 1980

RUEHDA/AMCONSUL ADANA 1567

RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 03 ANKARA 000128

SIPDIS

EB/TPP/IPE FOR JBOGER

PLEASE PASS USTR FOR JCHOE-GROVES AND LERRION

USPTO FOR JURBAN

USDOC FOR ITA/MAC/CRUSNAK

SENSITIVE

SIPDIS

E.O.12958: N/A

TAGS: ECON [Economic Conditions],

ETRD [Foreign Trade],

KIPR [Intellectual Property Rights],

PGOV [Internal Governmental Affairs],

TU [Turkey]

SUBJECT: TURKEY: ADVANCE SPECIAL 301 INITIATIVE RESPONSE

Ref: A) 06 STATE 183957

B) 06 STATE 180082

ANKARA 00000128 001.2 OF 003

¶1. (U) Turkish officials welcomed the opportunity to work with us on

intellectual property issues in advance of the regular "Special 301"

season. We coordinated with several Turkish government agencies,

including the Foreign Trade Undersecretariat (FTU), which is

responsible for ensuring that Turkey is upholding its international

obligations, such as IP protection obligations. FTU and the

Ministry of Justice (MOJ) provided extensive written responses to

the questions raised in reftels. We also met separately with FTU,

MOJ, Customs Undersecretariat, and Patent Institute and received

information from the Turkish National Police and the Turkish chapter

of the Business Software Alliance and member companies. Finally,

Ambassador plans to meet with State Minister for Foreign Trade and

Customs, Kursad Tuzmen, in the near future to discuss these issues

with him and encourage his involvement during the "Speial 301"

process this year.

¶2. (SBU) In its coordinated written submission, FTU noted a number

of improvements during 2006 related to Turkey's IP protection. A

summary of the response to ref A follows:

-- In response to the question of pharmaceutical data-exclusivity,

the Ministry of Health (MOH) stated that its review of the generics

applications received prior to January 1, 2005, is ongoing. FTU

noted that only one case has been approved thus far (for a copy of

one of Danish firm Lundbeck's products), and added that during

meetings with PhRMA company representatives in Turkey, the companies

conceded that the claim for data protection of the molecule was

questionable.

-- Regarding patent linkage, FTU argued that Turkey's system is

similar to that of the EU and several other countries and that

implementing a system similar to that of the U.S. is not an

international obligation. It also pointed to the Turkish Patent

Institute's (TPI) recently implemented computerized database, which

is accessible by the public through their website, and the regular

reports sent by TPI to MOH listing recently approved pharmaceutical

patents. They added that there has not been a case since that of

Eli Lilly's where a generic of a product with a valid patent in

Turkey was granted marketing approval.

-- The Ministries of Justice, Culture and Tourism, the Customs

Undersecretariat and the Turkish National Police have continued

their combined campaign against pirated goods, and the MOJ provided

updated statistics on seizures. In addition, they described efforts

to disseminate computerized information about counterfeit books to

law enforcement, prosecutors and judges in real-time.

-- According to Turkey's chapter of the Business Software Alliance

(BSA) the situation has improved since the governmental decree

calling for the use of licensed software in all government agencies.

While anecdotally, government use of pirated software is still

high, BSA representatives and member companies in Turkey believe

that the government is acting in good faith to improve the

situation. BSA is also working with the Ministry of Culture and

Tourism to implement public awareness campaigns.

-- Finally, the Ministry of Justice allocated additional resources

in 2006 to help alleviate the backlog of IPR cases and more

efficiently prosecute offenders. The number of specialized IPR

courts increased to 12, including two additional courts in Istanbul.

In addition, judges, prosecutors and law enforcement officials

continue to participate in GOT, EU, and U.S. training programs.

¶3. (U) More detailed responses to the questions raised in ref A are

listed below to correspond with the original talking points:

¶4. (U) "Continue the process of reviewing all applications for

marketing approval submitted prior to 01.01.05, and ensure that no

approvals are granted for molecules under patent protection."

(SBU) In FTU's written submission, it noted that data exclusivity

for pharmaceutical products is a commitment for Turkey in accordance

with its EU Association Agreement. Regulations on this issue have

been prepared in accordance with the EU requirements. Turkey

introduced data exclusivity for pharmaceutical products on Most

Favored Nation basis to all of its trading partners. Therefore,

data exclusivity is not limited to original products licensed in EU

member countries. Acquiring a license in any country after January

1, 2001, is sufficient for data exclusivity if no generic

manufacturer had applied for licenses in Turkey as of January 1,

2005. The term of exclusivity is limited to the duration of the

drug patent or to six years after the date of licensing, which is

ANKARA 00000128 002.2 OF 003

the same system used by the EU.

(SBU) Concerning the outstanding generic applications that were

submitted prior to January 1, 2005, MOH stated that these

applications are still being examined. However, FTU added that this

does not necessarily mean that licenses will be issued for all of

the applicants. Applications that do not meet the necessary

criteria will be rejected. FTU added that to date, only one such

application has been approved (for a copy of one of Danish firm

Lundbeck's product), and that the pharmaceutical companies conceded

in meetings with FTU that the product that was approved was not

necessarily an exact copy of Lundbeck's protected molecule.

¶5. (U) "Implement a system of coordination between health and patent

authorities to prevent the issuance of marketing approvals for

authorized patent-infringing copies of pharmaceutical products."

(SBU) FTU asserted that Turkey utilizes a system similar to the EU's

in which a firm applying for licensing of a product must prove that

the new product has not been licensed nor has been patented in

Turkey. For example, a generics manufacturer would have to include

information in its application showing that the product has not been

patented in Turkey. In 2006, the Turkish Patent Institute (TPI)

created a searchable database website that permits users to search

for patented, copyrighted, and trademarked material in Turkey. The

TPI also sends regular reports to the MOH about recently-approved

health-related patents (including pharmaceuticals), the last of

which was sent in November 2006. Between reports, MOH officials can

search the patent database. The TPI does not, however, provide

information to outsiders about patent applications that have not yet

been approved. FTU added that since the highly publicized case in

which copies of Eli Lilly's product Zyprexa were granted licenses

while it had a valid patent, there have been no subsequent cases of

this type in Turkey.

¶6. (U) "Continue the campaign against book piracy and provide

statistical readouts of success."

(SBU) The MOJ provided the following statistics on seizures

resulting from operations against IPR violators conducted between 1

April 2004 and 7 December 2006:

2004 2005 2006

--------- --------- ---------

SEIZED MATERIALS

Unreg. CD/VCDs 2,020,370 2,893,357 4,133,385

Unreg. DVDs 59,346 316,954 401,611

Unreg. Books 274,527 240,335 156,914

Unreg. Video Cass. 675 128 1,512

Unreg. Tape Cass. 55,202 45,590 69,987

Reg. CD/VCDs 4,649 659 1,201

Reg. DVDs - 419 520

Reg. Books 3,783 1,480 1,840

Reg. Tape Cass. 3,623 3,489 3,582

TOTAL SEIZURES 2,422,175 3,502,411 4,770,552

(SBU) In addition to seizures, in May 2006, a web-based banderole

automation system was established in order to provide judges,

prosecutors, security forces, business associations and copyright

holders with real-time information regarding pirated goods.

(SBU) Plans for the future include an Optical Disk Investigation

Center which, based on the model of IFPI laboratories, will provide

law enforcement with the ability to quickly identify counterfeit

material. The MOJ also plans to establish IPR offices in each of

the provinces and to provide additional training to raise the

awareness of the police and officials responsible for fighting

piracy in the provinces. As additional encouragement, a draft bill

was sent to Parliament providing bonus compensation for law

enforcement officials who seize pirated goods. It has been approved

by the relevant Parliamentary Sub-Committee and will be submitted

for approval by the General Assembly.

¶7. (U) "Provide feedback on the success of the governmental decree

mandating the use of licensed software in governmental agencies.

Address rampant business software piracy in the private sector and

by individuals by initiating enforcement actions and public

awareness campaigns."

(SBU) The Ministry of Culture and Tourism created a public

awareness campaign in cooperation with Turkey's chapter of the

Business Software Alliance (BSA) that includes newspaper and TV

advertisements explaining the illegality and penalties associated

ANKARA 00000128 003.2 OF 003

with using pirated software and showing the logo of the MOCT and

BSA.

(SBU) As noted in ref A points, the GOT requires that all software

used on government computers be licensed. However, Turkey's chapter

of BSA has heard anecdotally that the estimated piracy rate on

government computers is approximately 50 percent. They emphasized

to us, however, that they believe that the government is acting in

good faith and trying to eliminate pirated software use by

government officials. Comment: The head of the Turkey office of a

major U.S. software producer told us that he doubts the utility of

such proclamations in relatively more-developed countries like

Turkey and agreed that the Government is working to reduce internal

piracy. He also said that an agreement had more symbolic than

practical value, given that there is no centralized point for

government software procurement. In 2006, Microsoft CEO Bill Gates

visited Turkey and announced his plans to support a techno-park in

Istanbul and invest more in Turkey, which he characterized as a

regional technological base. Microsoft and other companies, like

Cisco, have close cooperative relationships with the government of

Turkey. End comment.

¶8. (U) "Provide the judiciary with more resources to increase

efficiencies (process cases more quickly) and take concrete steps

(e.g., sentencing guidelines) to encourage judges to impose

deterrent sentencing."

(SBU) The Ministry of Justice (MOJ) recently increased the number of

IPR courts in Turkey to 12, seven of which are civil courts and five

of which are criminal. This increase added two additional IPR

courts in Istanbul to reduce the backlog. The MOJ is also working

on creating additional courts in Istanbul to further increase

efficiencies and to locate additional warehouses in which seized

goods can be stored while the trial is proceeding.

(SBU) The MOJ, in cooperation with the EU, has provided a number of

training seminars for judges, prosecutors and law enforcement

officials. For example, 8 IPR judges and prosecutors participated

in a 10 month training program in the EU IPR-related agencies. In

addition, an IPR Documentation Center was established at the

University of Ankara Faculty of Law. This Center provides

centralized information related to IPR international law and best

practices. The MOJ has also developed a computerized network that

links the IPR Courts, the Documentation Center, the MOJ, the TPI and

the Customs Administration. We also continue to send Turkey's IPR

judges on IV programs to the U.S.

(SBU) The following MOJ information shows the average duration of

IPR cases:

TYPE OF CRIME DURATION W/O DURATION W/

APPEAL APPEAL

------------- -------------- -----------

Trademark 3 - 7 months 2 years

Patent 3 - 10 months 2 years

Utility Model 2 - 10 months 2 years

Moral rights 3 - 10 months 2 years

Financial rights 3 - 8 months 2 years

Other offences 3 - 10 months 2 years

Related rights 3 - 8 months 2 years

Banderole crimes 3 - 6 months 2 years

Seizure 1 - 2 days

WILSON

Also from Turkey (being downgraded):

UNCLAS SECTION 01 OF 04 ANKARA 000854

SIPDIS

DEPT FOR EB/TPP/MTA/IPE - CLACROSSE/JURBAN AND EUR/SE

DEPT PASS USTR FOR JCHOE-GROVES

DEPT PASS USPTO FOR JURBAN

USDOC FOR ITA/MAC/CRUSNAK

E.O. 12958: N/A

TAGS: ETRD [Foreign Trade], KIPR [Intellectual Property Rights],

TU [Turkey], USTR [Office of the Special Representative for Trade Negotiations]

SUBJECT: Special 301 - Recommendation to Downgrade

Turkey to Watch List Status (SBU)

Ref: (A) State 14937 (B) 05 Ankara 6378 (C) 05 Ankara

7097 (D) 05 Ankara 6899 (E) 05 Ankara 971 (F) 06

Istanbul 124 (G) 06 Ankara 479 (H) 05 Ankara 7308 (I) 05

Ankara 7296

Summary

-------

¶1. (SBU) Over the past year, the GOT has continued to

improve intellectual property protection, especially for

increasingly deterrent sentences for copyright

infringers in a more expedited manner. An expanded data

exclusivity regulation provides protection for new

pharmaceutical molecules, although it is still short of

TRIPS and EU requirements and leaves the fate of 35

products in question. The most productive way to ensure

that Turkey continues to move toward full implementation

of international IPR standards would be to include

Turkey on the Watch List in the 2006 Special 301 Review

and continue to engage the GOT to improve intellectual

property protection. Such steps would recognize the

successful actions taken over the past year and set a

clear agenda for further work in the period ahead. End

Summary.

Pharmaceuticals

---------------

¶2. (U) Inadequate protection of the confidential test

data of pharmaceutical companies has been Turkey's most

egregious IPR shortcoming. In response to intense EU

and USG pressure, however, the GOT broadened data

protection in a regulation issued by the Health Ministry

in June 2005. Data exclusivity is provided to all

products granted marketing approval in Turkey after

January 1, 2005. The six-year term of protection starts

on the date of licensing in a European Customs Union

(ECU) country. The GOT argues that it cannot

differentiate itself from other ECU countries with

respect to data exclusivity. EU representatives in

Turkey concede that, while the ECU system is complex and

this issue is not entirely clear in its regulations,

this is probably the case. They add that under ECU

statutes, an ECU country cannot block access to a

product that has been approved or produced in other ECU

countries. Using the leverage of the EU accession

process, the EU continues to engage the GOT at the

highest level, including letters from Commissioner

Mandelson to FM Gul and meetings with State Minister

Babacan, to push the GOT to implement fully EU-compliant

regulations on this issue.

¶3. (SBU) Prior to the January 1, 2005 start of enhanced

data protection, generic manufacturers in Turkey filed a

number of "midnight" applications for approval of

products not yet registered in the Turkish market.

Pharmaceuticals Research and Manufacturers Association

(PhRMA) companies in Turkey remain concerned about the

data protection available to up to 35 molecules for

which such generic applications were filed (ref B). MOH

officials argue that under Turkish law they must process

these applications, but that this in no way guarantees

that they will subsequently gain approval (ref C).

Local representatives of PhRMA companies tell us that

under Turkish law these files do not qualify for

approval because they may rely on research-based

companies' full data submissions that were not filed in

Turkey prior to January 1, 2005. MOH officials also

tell us that the 210 day processing deadline for

applications does not apply to files submitted prior to

January 1, 2005, and therefore they have made it a

priority to process the applications submitted after

this date and will get to the "midnight filings" as time

becomes available. While the MOH has not been willing

to definitively state whether or not these 35 products

enjoy data exclusivity, officials have indicated to us

that they may be solving the problem by waiting for what

would have been the end of the data exclusivity period

before making a decision.

¶4. (SBU) On the issue of patent linkage, the Health

Ministry recently told us that the Turkish Patent

Institute (TPI) holds responsibility for patent linkage

reviews. Under Turkish law, there is no linkage

requirement between a patent search and licensing

approval. There does exist, however, a requirement to

determine whether or not a patent exists prior to

granting marketing approval, the final step before a

product becomes available to the Turkish market.

¶5. (U) Citing concerns on data exclusivity and patent

linkage, PhRMA claimed IP-related losses of USD 1.36

billion - 21.8 percent of sales in Turkey in 2005, up

from USD 887 million last year. Describing serious non-

IP problems with respect to Turkish price controls and

reimbursement system reforms, PhRMA again recommended

elevating Turkey to Priority Foreign Country status.

Embassy notes that data exclusivity comprises only USD

205 million of PhRMA's estimated damages. We also note

that, following the MOH's expansion of data protection

in June 2005, the pharmaceutical companies operating

here have expressed a willingness to let implementation

take its course for now rather than pushing for our

continued high-level engagement. It is not clear what

if any patent-related damages are represented by the

remaining USD 1.16 billion claimed by PhRMA.

-----------------------------------------

¶6. (U) While the International AntiCounterfeiting

Coalition (IACC) did not recommend that Turkey remain in

any Special 301 category in 2005, the International

Intellectual Property Alliance (IIPA) recommended that

Turkey remain a Priority Watch List Country. While

doing so, however, IIPA's submission describes a number

of improvements made by the GOT to fight piracy and

strengthen enforcement in 2005. IIPA estimates 2005

industry losses in Turkey at over USD 160 million, down

from 2004 estimated loss of USD 190 million.

¶7. (U) Turkey has indeed taken a number of significant

positive steps in copyright enforcement in the last

year. These include the following:

-- 3.5 million pirated goods were confiscated in 2005

during raids and other ex officio actions (those not

requiring a court order) by the Turkish National Police

(TNP).

-- In July 2005, the Turkish Court of Cassation (the

highest appeal court) upheld a previous Ankara IPR Court

ruling cited in our 2005 submission (ref E) against

three individuals who were sentenced to 2.5 years in

prison and a YTL 60,000 (approx USD 44,000) fine. This

ruling now provides a precedent for future cases and

should lead to expedited decisions during the appeals

process.

-- In January 2006, the Istanbul IPR Court sentenced a

pirated optical disk producer to 2 years, 13 months and

15 days imprisonment for illegally copying and

distributing copyrighted material, an additional 2.5

years imprisonment for violating a copyright without the

right owner's consent, the confiscation of 4,700 pirated

DVDs, and the sale of the production equipment worth YTL

160,447 (approx USD 120,000). This was the first time

in which the production equipment was seized and sold in

Turkey and responds directly to IIPA's recommendation

that criminal liability include seizure and forfeiture

of all equipment and goods found in such facilities.

-- The Culture and Tourism Ministry (MOTC) and the

Ministry of Education (MOE) created an IPR-related

curriculum as part of primary and secondary school

civics programs.

-- The MOE began a public-education campaign targeting

universities and places of business providing photocopy

services in their vicinity stating that the reproduction

of copyrighted material is illegal.

-- Due to private sector and inter-agency GOT pressure,

a proposed amendment that would remove criminal

penalties for infringing goods produced outside of

Turkey (ref D) has been set aside and is not expected to

be passed by the Parliament.

¶8. (U) In 2004, Turkey published its first Plant Variety

Protection (PVP) Law. At least one subsidiary of a U.S.

seed company, however, reported difficulty obtaining

protection for its commercial seed under this new law.

In the last six months, however, we have had no further

contact from the company regarding this issue.

Unlicensed Software Use

-----------------------

¶9. (SBU) In the 1990s, the GOT implemented an internal

memorandum banning the use of unlicensed software.

According to NGOs in Turkey that monitor this usage, the

memorandum's requirements are sufficient for the

protection of software rights holders. Official

statistics, however, are not available concerning the

percentage of government offices in compliance, and no

formal mechanism of enforcement exists.

¶10. (SBU) The private business and home use of

unlicensed software remains a problem. In a January

2006 visit to Turkey, however, Microsoft's Bill Gates

congratulated the GOT on its effort to reduce software

piracy and launched a new program, "My First Computer,"

which aims to provide low cost computers (approx USD

300) to 80 percent of Turkish households (ref F). Gates

described Turkey as a "dynamic emerging market" and

alluded to the possibility of further IT investment in

the country. According to Turkey's chapter of the

Business Software Alliance, approximately 66 percent of

the software in Turkey is pirated. (Note: While this

seems high, compared to other more developed developing

countries, Turkey's home computer use is low, estimated

at only 16 percent of households or an estimated 10

million people using 750,000 computers. End note.)

International Treaties

----------------------

¶11. (SBU) Turkey has not yet ratified the 1996 WIPO

Phonograms Treaty (WPPT). MOCT officials recently told

us, however, that the matters were at the Parliament and

they hoped, but were not certain, that they would be

considered and approved during the 2006 Parliamentary

session. They added that in practice Turkey already

complies with these treaties.

Training

--------

¶12. (SBU) As a result of the October 2005 start of

Turkey's EU accession talks, the GOT has begun a

harmonization effort to align its IPR regulations with

those of the EU. In an effort to strengthen Turkey's

judges, prosecutors, police and customs officials have

participated in a number of training programs and

twining projects in which officials from another EU

country work closely with relevant officials on specific

IPR issues. Most recently 8 additional judges and

several additional prosecutors were selected to serve in

the IPR courts and receive training. The MOCT also held

a seminar for 75 TNP officers on detection of pirated

goods, investigation and enforcement. 2005 also marked

the addition of a former IPR court judge to the Court of

Cassation, thus providing much-needed expertise to that

court of appeal. This should hopefully expedite future

appeals in 2006.

¶13. (U) While the GOT's EU accession process will

provide many training opportunities, we continue to

support USG training courses for Turkey's IPR judges,

prosecutors, police and customs officials. One useful

avenue of training would be a course linking IPR crimes

with organized crime and terrorist organizations. Many

GOT officials believe that proceeds from pirated

products fund the PKK terrorist organization, although

no connection has been found. It would be useful for

Turkey's prosecutors and investigators to receive

training on how to detect and link such activities with

these organizations and prosecute the offenders.

Comment/Recommendation

----------------------

¶14. (SBU) The June 2005 expanded data exclusivity

regulations, stepped up copyright enforcement and

deterrent sentences represent significant progress on

intellectual property protection. Due to Turkey's EU

harmonization process, the USG and the EU are working

together to emphasize the importance of these issues and

provide training and technical support. In addition,

these issues were emphasized during the January Trade

and Investment Framework (TIFA) Council meeting by USTR

representatives. We supported putting Turkey on the

Priority Watch List in 2004 and 2005 in order to apply

the pressure needed for the GOT to implement much-needed

reform. Serious steps have been taken and should be

recognized. Keeping Turkey there in 2006 could slow

down this progress if there is a political backlash

against outside pressure, especially if this pressure is

seen as not taking into account Turkey's progress. With

the increase in raids and contraband seizures, a more

expedited judicial process that is issuing more punitive

penalties for IPR infringers, and the assurance of data

exclusivity for all but 35 remaining pharmaceutical

molecules, we believe that downgrading Turkey to the

Watch List in 2006 would encourage the GOT to reinforce

and continue its IPR enforcement efforts while still

maintaining pressure to continue its efforts.

Wilson

Here again is Bill Gates, who lobbied the Prime Minister, Tayyip:

UNCLAS SECTION 01 OF 05 ANKARA 000348

SIPDIS

DEPARTMENT FOR INR/R/MR, EUR/SE, EUR/PD, NEA/PD, DRL

JCS PASS J-5/CDR S. WRIGHT

E.O. 12958: N/A

TAGS: OPRC [Public Relations and Correspondence],

KMDR [Media Reaction Reporting], TU [Turkey]

SUBJECT: ANKARA MEDIA REACTION REPORT

MONDAY, JANUARY 30, 2006

THIS REPORT PRESENTS THE TURKISH PRESS SUMMARY UNDER THREE

THEMES:

HEADLINES

BRIEFING

EDITORIAL OPINION

--------------------------------------------- --

HEADLINES

MASS APPEAL

Erdogan: HAMAS, Israel Must Recognize Each Other - Milliyet

1/29

US to Cut 400 Million USD of Aid to Palestine - Vatan 1/29

US: HAMAS Must Denounce Terror - Vatan 1/28

EU Warns Ankara About Iran - Sabah

Iran Warns: If Attacked, We'll Strike Israel - Vatan 1/29

Newsweek: US Military Negotiates with Resisters in Iraq -

Sabah

Georgia Asks for Turkey's Support to Join NATO in 2008 -

Milliyet

Bill Gates Promises More Investment in Turkey - Vatan

ABC Reporter, a Cameraman Heavily Wounded in Iraq - Hurriyet

OPINION MAKERS

Gul: Turkey's Cyprus Proposal a Huge Opportunity for Peace -

Yeni Safak

Annan to Launch New Cyprus Initiative in May - Zaman 1/28

Erdogan: Turkey May Mediate Between HAMAS, Israel - Yeni

Safak 1/28

HAMAS Leader: US Not Our Enemy - Yeni Safak

HAMAS Will Establish Palestine Army - Yeni Safak 1/29

Merkel: Germany, EU May Cut Financial Aid to Palestine -

Zaman

Merkel: Iran a Threat against Democratic World - Cumhuriyet

Americans Want Military Action if Iran Continues Nuclear

Program - Zaman 1/29

Pope Benedict XVI to Visit Turkey in November - Yeni Safak

1/29

Athens Mayor Bakoyani to Become Greece's FM - Radikal 1/29

US Troops Detain Insurgents' Wives in Iraq - Cumhuriyet 1/29

4 Killed in Insurgent Attacks Against Churches in Baghdad,

Kirkuk - Cumhuriyet

Saddam, Angered at New Judge, Leaves Courtroom - Zaman

BRIEFING

Erdogan Offers Turkey's Mediation between Israel and

Palestine: Weekend papers quote Prime Minister Tayyip

Erdogan as saying, in Davos, that Turkey is ready to act as

a mediator between Israel and the new Palestinian

administration led by HAMAS. Erdogan's remarks have

'stunned' the international community, say papers. Turkish

officials in Ankara told the press that Erdogan's proposal

was well intentioned, but not realistic, and that it will

not receive a positive response from the international

community.

Alpogan Wraps Up Meetings in US: On Friday, Turkish

National Security Council (NSC) Secretary General Yigit

Alpogan told the press in Washington, that he had explained

to Americans Turkey's views on issues such as Ankara's

Cyprus proposal, Iraq, Iran, Syria, Armenian genocide, and

the PKK. Alpogan said there was no sense in holding a

referendum in Kirkuk next year, since Kurdish efforts to

change the demography of the oil-rich Iraqi city continue.

He said a referendum held solely for Kirkuk would have

adverse effects on Iraq as a whole, and called on the US to

'pay attention' to the issue.

Turkey favors a diplomatic process regarding Iran's nuclear

program, Alpogan said, warning that severe pressure from the

international community may boost the nationalistic feelings

of Iranians. Alpogan also emphasized that Turkey may act as

a 'facilitator' between Syria and the western world, warning

Damascus whenever necessary. Alpogan noted that the United

States has an 'image problem' in Turkey explaining that,

'President Bush says that the US opposes all forms of

terrorism. Yet the U.S. continues to merely watch the

presence of PKK terrorists in northern Iraq. A step taken

against the PKK would change for the good Turkish public

opinion of the US.' Alpogan added that Turkish-American

relations passed through a tough period at the end of 2004,

but that ties have been improving since June 2005.

EU Expects Stronger Turkish Reaction against Iran: The

European Union (EU) has been pressing Ankara to adopt a hard-

line policy against Tehran, complaining that there was no

change in Turkish statements regarding Iran, despite rising

tensions among Iran and the international community, Monday

papers report. Turkish Foreign Ministry (MFA) sources said

that Turkey has to preserve the balance, adding that for the

time being, Ankara is determined to avoid moves aimed at

increasing the pressure on Iran. However, Turkey supports

EU views regarding Iran, and is determined to act parallel

with the EU in the crisis.

Talabani Interviews Turkish Daily: Iraq President Jalal

Talabani said, in an exclusive interview with the English-

language daily "The New Anatolian" on Monday, that the Kurds

were discussing giving the Turkmen autonomy in northern

regions where they form the majority in the new constitution

that is being drafted for the Kurdistan region. Talabani

repeated that there will be no Kurdish independence,

especially without the approval of Turkey. 'The Arab

Shiites have Iran, the Arab Sunnis have the Arab states and

especially Saudi Arabia. We only have Turkey,' Talabani

said.

According to Talabani, the worst terrorists in Iraq belong

to the Zarqawi group and al-Qaida. 'They regard ordinary

Muslims as their enemies if they are not fundamentalists.

They do not regard the Shiites as real Muslims. They regard

moderate Sunnis as people who have given up the Islamic

faith, committing the greatest sin,' he said. The Iraqi

president said there are also extremist Sunni Arabs who have

been driven to violence because they were angered by US

troops, the Shiite Arabs, the Kurds or even by the

government. 'A national unity government can solve this

problem. The more Sunni Arabs are involved in the political

process, the more Sunni extremism will die down.' Talabani

expects the Sunni insurgency to end in 'about six months.'

He noted the Americans are talking with the Sunni Arabs to

bring them back into the political process. Talabani added

that the dialogue between the US and the Sunnis has created

concerns among the Shiite Arabs that Washington will help

the Sunnis. 'Shiites Arabs are scared that the Sunni Arabs

will make a comeback,' he said. Such a comeback is

impossible, Talabani said, adding that the Shiite majority

will continue to play a major role in Iraq. Talabani also

noted that the Kurds have emerged as a part of the solution

in Iraq, and not as the problem: 'We have become the uniting

factor in Iraq.' Talabani rejects the notion that the

Shiites in Iraq are really controlled by Iran. 'The Arab

Shiites say Najaf is the Vatican of the Shiite world while

the Iranians are trying to promote Qum as the Vatican.

Iraqi Arabs do not recognize the religious superiority of

the grand ayatollah in Iran,' he emphasized. Talabani noted

that no one, including the radical Shiite leader Muqtada al-

Sadr, wants the Americans to go. The Iraqi president said

the pullout of American troops will only create a civil war

between the Sunnis and the Shiites.

Erdogan Attends Davos Meetings: Addressing the World

Economic Forum meetings in Davos, Switzerland, Prime

Minister Erdogan said that Turkey expects five billion USD

of annual global investment inflow between 2006 and 2007,

weekend papers report. Erdogan stressed that Turkey has

achieved a growth rate of about 20 percent in the past three

years, becoming the 17th largest economy in the world.

'Three years ago, Turkey was a country full of corruption,

particularly in the financial sector. Today, the financial

sector in Turkey is among the most profitable, although

bankrupt banks, taken over by the state, cost Turkey

approximately 50 billion USD. For the time being, state and

private banks are making high profits,' Erdogan said. The

AK Party rule in the past three years has transitioned

Turkey from closed to open society, and from closed to open

economy, according to Erdogan. The PM expects Turkey to

draw 5 billion USD of global capital between 2006 and 2007.

'Turkey is the last bridge that connects Europe to the East,

and the East to Europe. Turkey, a country of opportunities,

aims to be number one in regional trade,' Erdogan

emphasized.

Belgian Gendarme Examines Turks Linked to Illegal

Activities: Monday "Aksam" claims that the gendarme in

Belgium, without notifying the government, had secretly

compiled information about 90,330 Turks linked to organized

crime and narcotics smuggling. Belgian lawmakers filed an

investigation into the secret gendarme operation. The

scandal has been hushed up by a committee headed by judge

Freddy Troch. Troch is the chief justice of the Belgian

court in Bruges that will hear the case of Turkish terrorist

Fehriye Erdal, says "Aksam." Erdal is wanted in Turkey for

the assassination of famous Turkish businessman Ozdemir

Sabanci.

Bird Flu Detected in Turkish Cyprus: A statement issued by

the European Commission announced that the deadly H5N1 bird

flu strain was found in poultry samples sent from Turkish

Cyprus to a laboratory in Britain, Monday papers report.

The commission declared that the EU will send experts to the

region to investigate the situation. Papers speculate that

the Greek Cypriots may close the Turkish Cypriot border to

contain the disease. Meanwhile, Turkish Agriculture

Minister Mehdi Eker said over the weekend that the EU had

removed restrictions on the importation of milk and poultry

from Turkey.

Pope May Visit Turkey in November: Sunday papers report a

Vatican source as saying over the weekend that Pope Benedict

XVI will probably visit Turkey on November 30 to coincide

with St. Andrew's Day, though no date has been fixed yet.

Sunday "Hurriyet" says that Ankara has declined to confirm

the report. Ecumenical Patriarch Bartholomew I had invited

Benedict XVI to attend St. Andrew's Day last November.

However, the invitation was not matched by Ankara, which

asked the Pope to come in 2006 instead.

AKP MPs Cold to Turkey's Strategic Partnership with US: An

opinion survey conducted among the ruling AKP lawmakers,

provincial leaders, and mayors says that 71 percent support

EU membership and 61 percent support birth control. Ninety-

seven percent of the respondents voiced opposition to gay

marriages, 85 percent to extramarital relations, and 80

percent to abortion. Most of the AKP members are cold to

the idea of a strategic partnership between the US and

Turkey, according to the survey.

Bill Gates Pledges to Continue Investment in Turkey:

Microsoft's Bill Gates, the world computer software giant

and the world's richest man, pledged to continue investments

in Turkey. Gates was received by Prime Minister Tayyip

Erdogan on Sunday evening in Istanbul. Erdogan said that

his government supports the establishment of a 'silicon

valley' in Turkey. 'We want global companies to choose

Turkey as their technology base,' Erdogan said. Gates

praised Turkey's stance on information technology, saying

that Turkey was expanding use of the Internet while some

countries are restricting it. 'We will continue to invest

in Turkey. Turkey has a very bright future,' Gates said.

Gates will attend a meeting with Turkish university students

in Istanbul on Monday.

EDITORIAL OPINION: Palestine/Hamas

"Understanding Palestine by Looking at Hamas"

Cengiz Candar commented in the tabloid "Bugun" (1/30):

"There is concern about whether the peace process will stop,

following the election victory of Hamas. The question is,

was there a genuinely working peace process? If there was,

how could we explain the Israeli security wall? If there

was, how could we possibly explain the last days of Arafat

in Ramallah surrounded by Israel? In sum, what comes around

goes around for Israel. Palestine has now started a new

chapter with newly emerging facts. Success may take some

time and may not actually happen in the end. Yet the

problem is not only Hamas, it is also Israeli policies,

which led to the existence of Hamas and created the

conditions for election victory. Following the Israeli

elections, which are scheduled for March 28, we will have an

Israel without Sharon and a Palestine with Hamas. Speaking

in realistic terms, Hamas cannot put down arms without first

seeing the election results in Israel. Hamas will try to

wait and see tangible clues about the elimination of Israeli

occupation before abandoning its trump card."

"The Hamas Era in Palestine"

Yilmaz Oztuna commented in the conservative "Turkiye"

(1/30): "The main reason for Al Fath's defeat is its

involvement in severe corruption. Al Fath abused billions

in Arab aid as well as Arafat's heritage. However both the

US and Israel recognize Hamas as an Iranian-linked terrorist

organization, not a political party. Even if Hamas agrees

to a coalition with Al Fath, it is still unlikely that

Israel will recognize the government. Cutting off the

Iranian link seems impossible for Hamas. The only

possibility for Hamas is to give up on terror. This is

exactly what Turkey hopes to see happen. Considering the

current atmosphere, it is also very likely that violence

will reoccur in Palestine. The Shiite movement has gained

significant ground in Iraq, Lebanon, Syria and Palestine.

And the movement will try to spread to a broader region.

All of this means, the tension will get even higher in the

Middle East."

"The Lesson and Opportunity with Hamas Victory"

Washington-based Yasemin Congar wrote in the mainstream

"Milliyet" (1/30): "Can we take the victory of Hamas, which

is a violent and radical Islamist organization, as a chance

for peace? It may sound way too optimistic, but there are

some in Washington who believe that the election victory of

Hamas can be a chance for peace. First of all, following

the legitimate election process, there is no other way than

to accept Hamas' rule. Both international and regional

players should concentrate on forcing Hamas to make a choice

between democracy and terrorism. The international

community should persuade the Palestinian people that the

way toward becoming a state is through the democratic choice

of Hamas. The international community should be able to

form policies in this regard and should also prevent Iran

and Syria's negative influence on Palestine. Can this be

successful in the end? Is it really possible to see Hamas

change? The optimistic ones in Washington believe that it

is worth trying."

WILSON

There is more of that in the following Cablegate cable:

UNCLAS SECTION 01 OF 03 ANKARA 002645

SIPDIS

DEPARTMENT FOR INR/R/MR, EUR/SE, EUR/PD, NEA/PD, DRL

JCS PASS J-5/CDR S. WRIGHT

E.O. 12958: N/A

TAGS: OPRC [Public Relations and Correspondence],

KMDR [Media Reaction Reporting],

TU [Turkey], Press Summaries

SUBJECT: ANKARA MEDIA REACTION REPORT

FRIDAY, MAY 6, 2005

THIS REPORT PRESENTS THE TURKISH PRESS SUMMARY UNDER THREE

THEMES:

HEADLINES

BRIEFING

EDITORIAL OPINION

--------------------------------------------- -----

HEADLINES

MASS APPEAL

Kennedy Presses Papadopoulos on Annan Plan - Hurriyet

PKK Suicide Bomber Caught in Diyarbakir - Milliyet

Hamas Gets 30 Percent of Vote in Gaza Polls - Sabah

UN Unanimously Confirms Dervis to Head UNDP - Aksam

Election Victory a Birthday Gift for Blair - Milliyet

Vietnamese PM Due in US on First Official Visit - Sabah

OPINION MAKERS

Papadopoulos: Turkish Troop Pullout a Prerequisite on Cyprus

- Birgun

Papadopoulos Says Settlement in Cyprus Unlikely Before

October 3 - Yeni Safak

Insurgent Attacks Target Security Forces in Baghdad -

Cumhuriyet

Bulgaria to Pull Out of Iraq Late This Year - Cumhuriyet

Another Turkish Truck Driver Killed in Iraq - Radikal

400 Muslim Brotherhood Members Detained in Egypt - Zaman

Britain Decides to Continue With Blair - Cumhuriyet

Mysterious Blast at UK Consulate in New York - Cumhuriyet

Pentagon Expert Blamed for Leaking to Israel Information -

Zaman

BRIEFING

Erdogan's Upcoming Visit to US: Mass appeal "Hurriyet"

reports from Washington that Prime Minister Erdogan's recent

visit to Israel has enabled the White House to give a `green

light' for a meeting with President Bush during his upcoming

trip to the United States. An unidentified high-level US

official in Washington said that Erdogan will arrive there

in late May. `Prime Minister Erdogan's visit to Israel, and

his recent speech defending US-Turkish ties have been good

developments,' the US official said. The official noted

that the Turkish government's decision on expanded US access

to Incirlik Airbase did not fully meet the American request,

but would still be helpful in making the military operation

run more smoothly. Leftist-nationalist "Cumhuriyet"

reports that President Bush has not yet responded to

Erdogan's request for a meeting which, "Cumhuriyet"

believes, is an indication of the `chilliness' in relations

between the two countries. The paper reports that the

Turkish prime ministry has in mind June 26-30 for Erdogan's

call on President Bush.

DAS Kennedy Visits Cyprus: Deputy Assistant Secretary of

State Laura Kennedy, during a stop in Nicosia as part of her

current tour of the region, encouraged both sides in Cyprus

to take forward steps for restarting the UN-backed peace

talks. Kennedy urged the Greek Cypriot Administration to

submit to the UN its proposed changes to the Annan Plan so

that the talks can be resumed. She expressed US readiness

to facilitate an agreement, but stressed that the initiative

will have to come from the Cypriots themselves rather than

from outsiders. Kennedy is to meet on Friday with Turkish

Cypriot `president' Mehmet Ali Talat in the north of the

divided island.

Erdogan-Kocharian to Meet in Warsaw: Foreign Minister

Abdullah Gul said that Prime Minister Erdogan may meet with

Armenian President Kocharian at the upcoming Council of

Europe meetings in Warsaw. Erdogan is willing to meet

Kocharian in Warsaw in an effort to show European leaders

that he is ready for dialogue with Armenia, "Cumhuriyet"

comments. "Vatan" expects Azerbaijani President Ilham

Aliyev to join Erdogan and Kocharian in Warsaw.

Gul Visits Bishkek: Accompanied by lawmakers, businessmen

and journalists, Foreign Minister Abdullah Gul arrived in

the Kyrgyz capital of Bishkek Thursday for official

meetings. The first batch of humanitarian aid brought by

the delegation contains 380,000 USD worth of medicines. The

Turkish delegation brought to Bishkek 2.5s ton of medical

supplies and humanitarian aid worth 380,000 USD. Turkey is

also planning to send doctors and military experts, reports

claim. Gul is to meet with Kyrgyz acting President and

Prime Minister Kurmanbek Bakiyev and other officials on

Friday.

Turkish-Arab Economic Forum: Syrian Minister for Economy

and Trade Amir Husni Lutfi said on Thursday that there are

many opportunities for Turkish businessmen to invest in

Syria. Lutfi, in Istanbul to attend the Turkish-Arab

Economy Forum, voiced Damascus' willingness to join

international platforms and speed up economic reforms. He

said Turkey's membership to the European Union would be in

the interests of the Arabs as well. Turkish State Minister

Kursat Tuzmen told the forum that Turkey had the potential

to attract some 10 billion USD in Arab capital annually.

Tuzmen noted that Turkey has 20 billion USD in annual trade

with Arab coutnries, a figure that is expected to rise to 25

billion USD in 2005. Tuzmen said he expects the number of

multinational companies investing in Turkey to increase.

Erdogan Addresses Forum Istanbul 2005: Prime Minister

Erdogan told `Forum Istanbul 2005' meetings in Istanbul that

Europe can overcome the difficulties it faces in global

competition by admitting Turkey into the European bloc. He

said that by 2023, Turkey will be a global power extending

its influence from Europe to Afghanistan and the Middle

East. Erdogan added that Turkey, as a member of European

Union, will set balances in the region. The PM claimed that

Turkey has drawn 45 billion USD in investment through the

end of 2004. He also noted that Microsoft's Bill Gates will

help Turkey in building a `Silicon valley.'

UN Confirms Dervis for UNDP Post: The UN General Assembly

on Thursday confirmed by unanimous vote former Turkish

finance minister Kemal Dervis as the new head of the UN

Development Program (UNDP). Dervis is expected to assume

office on August 15. Dervis is the first UNDP chief to come

from a nation that receives UN development aid.

Police Detain Alleged PKK Bomber: Turkish police

apprehended a woman suicide bomber with alleged ties to the

outlawed PKK in Turkey's mainly Kurdish city of Diyarbakir,

papers report. The woman was allegedly preparing for an

attack against police headquarters in Diyarbakir with 1.5 kg

of C-4 plastic explosives wrapped around her waist. The

explosive device was to be detonated using a mobile

telephone. In April, the Kurdistan Freedom Hawks -- a group

thought to be affiliated with the PKK -- claimed

responsibility for a bomb blast in Turkey's western seaside

resort of Kusadasi that killed one policeman injured several

others.

Another Turkish Truck Driver Killed in Iraq: A Turkish

truck driver, Salih Gulbol, was killed on Thursday in an

armed attack near the Iraqi capital, Baghdad. Gulbol, was

married with two children, was working for a Kuwaiti

transportation company in Iraq. The tabloid "Posta" reports

that Gulbol's killing brings the total number of Turkish

drivers and workers killed in Iraq to 90.

EDITORIAL OPINION:

"New Happenings on the Northern Front"

Sami Kohen wrote in the mainstream-opposition "Milliyet"

(5/6): "All hopes that a post-election Iraq would be more

stable and secure have been dispelled with the latest wave

of violence. It is very worrying to see these incidents

spreading more widely, including into Northern Iraq. The

bloody activities of the Army of the Ansar-al-Sunni

militants, who are closely connected to Al-Qaeda, is proof

that the insurgents have opened a `second front' in the

North. The motivation behind this move was laid out by an

announcement by Ansar claiming that `the Kurds bowed down to

the Crusaders and fought against Islam together with the

Americans.' Although the new government in Iraq looks like

a coalition with 37 members, in fact real power is in the

hands of the Shiites and the Kurds. Unfortunately, the

political situation in Iraq is characaterized by chaos, and

the militants are taking advantage of this. The growing

violence in Northern Iraq is a big concern for Turkey as

well. The Turkish Foreign Ministry's harsh condemnation of

the Erbil bombing reflects this concern. It is a very

dangerous sign that the violence is spreading northward."

"Renewing Ties With Israel"

Erdal Guven commented in the liberal-intellectual "Radikal"

(5/6): "PM Erdogan's visit to Israel brought to an end the

corrosion in the Turkish-Israeli strategic relationship. If

only for this reason, the visit carries great importance.

There are many beneficial results of the visit, but the most

important one is that Turkey has reestablished stability in

its Middle East policy. The needle on the compass been

pulled back to the center, and away from the Iran-Syria

angle. The history of the last 20 years in the Middle East

shows that Turkey can best defend its national interests by

keeping plenty of room for maneuver in a complex region.

This is only possible with stable and rational policies."

"What Will Change if Ocalan is Retried?"

Fatih Altayli observed in the mass appeal "Hurriyet" (5/6):

"There has already been so much reaction to the possibility

of a retrial of PKK leader Abdullah Ocalan. The MHP in

particular have raised the alarm about a possible European

Human Rights Court decision in the case. But when Ocalan

was sentenced to the death penalty, it was the same MHP

(then in the ruling coaltion) that blocked the

implementation of a capital sentence. The European Court

would not be singling out Turkey if this is its decision.

The court also demanded, for example, that the French retry

the famous terrorist Carlos `the Jackal.' Retrying Ocalan

doesn't mean he will be freed. If it becomes necessary,

Ocalan could be retried and sentenced to his appropriate

punishment. The whole issue would then be behind us for

good. If certain circles ever ask for more on the issue,

then the Turkish Government would be well within its rights

to tell them to `get lost.' Presenting Ocalan's retrial as

tantamount to freeing him, and trying to use such cheap

policies to score political points will not be to Turkey's

benefit."

EDELMAN

Here is the “SENSITIVE” cable about “SPECIAL 301 REVIEW: SERBIA AND MONTENEGRO”:

UNCLAS SECTION 01 OF 04 BELGRADE 000275

SIPDIS

DEPT FOR EB/IPE-CLACROSSE

DEPT PLS PASS TO USTR JCHOE-GROVES, DOC-JBOGER,

USDOC PLS PASS TO SSAVICH AND USPTO-JURBAN AND LOC-STEPP

SENSITIVE

E.O. 12958: N/A

TAGS: ECON [Economic Conditions], PREL [External Political Relations],

SR [Serbia], MW [Montenegro], KIPR [Intellectual Property Rights],

Economic Development

SUBJECT: 2006 SPECIAL 301 REVIEW: SERBIA AND MONTENEGRO

REF: A) STATE 14937 B) BELGRADE 8

C) 05 BELGRADE 741 D) 05 BELGRADE 643

E) 05 BELGRADE 403

SUMMARY

-------

¶1. (SBU) While generally agreeing with the description of IPR

problems contained in the IIPA Special 301 submission, we do

not recommend that Serbia and Montenegro be placed on the

Watch List. The IPR environment in Serbia and Montenegro

(SAM), although not yet satisfactory, is certainly moving in

the right direction. As noted in Reftel B, significant

progress was made on the IPR Action Plan agreed upon by the

State Union and republic-level governments in April 2005. We

continue to see encouraging actions on the part of both

republics, as well as indications that further progress is

within reach. Recent meetings with officials in both

republics indicate that there is a readiness to discuss

another action plan to finish the legislative framework,

bolster enforcement efforts and cooperate with the private

sector in an anti-piracy campaign. Placing Serbia and

Montenegro on the Watch List after all of the progress made

on the IPR Action Plan (Reftel B) would risk undercutting the

political will for more progress. The Ambassador will be

holding senior-level consultations with government leaders in

coming days to test for receptiveness for real progress on

IPR issues. END SUMMARY.

¶2. (SBU) The IPR environment in Serbia and Montenegro (SAM)

is not yet where it needs to be to protect U.S. interests.

We generally agree with the description of IPR problems

contained in the International Intellectual Property Alliance

(IIPA) submission for the 2006 Special 301 review, although

some issues may be somewhat overstated.

¶3. (SBU) However, the momentum is in the right direction. We

see encouraging will and actions on the part of several

ministers and agencies responsible for different aspects of

IPR protection toward making necessary improvements. These

ministers have a fairly good track record of delivering on

commitments. Reftel B is a thorough assessment of the SAM's

progress on last year's action plan and illustrates that both

the State Union and republic-level governments have shown

commitment to strengthening the IPR environment. By our

assessment, of the eight target areas identified in the

action plan, we have seen substantial progress in five areas.

ITEMS REMAINING ON LAST YEAR'S ACTION PLAN

------------------------------------------

¶4. (U) Concerning the creation of an effective mechanism for

cross-checking applications to drug agencies for approval of

generic drugs with pharmaceutical patents already registered

(typically, by the research-oriented companies), no action

was taken by the State Union. However, this issue was raised

in recent EU Stabilization and Association Agreement (SAA)

talks with SAM, and it was determined that this was not

feasible due to the complexity of the patents. The EU does

not have such a cross-checking mechanism, and the U.S. Food

and Drug Administration (FDA) cross-checks for trademarks but

not patents.

¶5. (SBU) The draft Law on Special Rights for the Efficient

Protection of Intellectual Property was not enacted in Serbia

in 2005. However, it has been adopted by the government and

will be on the Parliament's agenda when it reconvenes in

March or April. This will be an important enforcement tool,

since it will make legal entities (companies) culpable for

IPR violations and provides for fines up to CSD 3 million

(approximately USD 41,000). Minister of International

Economic Relations Milan Parivodic told econoffs on February

13 that he would offer his assistance in making sure the law

was placed in a fast-track procedure on Parliament's agenda.

¶6. (U) Optical disc laws for Serbia and for Montenegro were

drafted but not passed in 2005. In Montenegro, the draft Law

on Optical Disks was delivered by the Ministry for Foreign

Economic Relations to the Ministry of Culture in late 2005.

The bill is expected to be adopted by the Government soon,

possibly by the end of February and no later than the end of

March 2006, and subsequently enacted by Parliament. The law

will regulate the production of optical disks, require the

registration of the business activity of reproducing optical

disks for commercial purposes, and provide for surveillance

of optical disk imports and exports as well as imports and

exports of polycarbonates and production equipment for the

production of optical disks.

¶7. (SBU) In Serbia, Minister Parivodic agreed on February 17

for his Ministry to be responsible for government adoption

and passage of the Law on Optical Disks. Special 301

considerations and WTO accession talks have prompted the

Ministry of International Economic Relations to be actively

engaged in strengthening the IPR environment in Serbia.

¶8. (U) Amendments to the Montenegrin Penal Code were provided

by the Ministry for Foreign Economic Relations to the

Ministry of Justice in late 2005. The amendments provide for

ex officio prosecution of IPR infringements, specify all acts

that constitute an IPR-related related offence, and increase

the penalties for conviction of IPR infringements. The bill

is expected to be adopted by the Government by the end of

March 2006, and subsequently enacted by Parliament.

IMMEDIATE RESULTS IN MONTENEGRO WITH NEW ENFORCEMENT LAW

--------------------------------------------- --------------

¶9. (U) On January 1, 2006, the Government of Montenegro (GoM)

began active enforcement of its law regulating protection of

intellectual property rights, starting with a public notice

that such actions would commence. In the first month,

inspectors surveyed 82 retail and wholesale locations. Forty

closed, apparently to avoid inspection. In other cases,

merchants who had previously carried pirated goods had

disposed of such stock prior to inspection. In 29 locations,

inspectors reported trade in goods with no origin

("pirated"), and consequently seized over 6,700 DVD, CDs,

tapes, and records. Inspectors have requested prosecution of

13 cases and assessed mandatory fines in seven other cases.

¶10. (SBU) A local legitimate film distributor in Belgrade

told econoff on Feb 10 that Montenegro's enforcement efforts

are showing immediate dividends. Between November 1 and

December 15, 2005, Millennium Film and Video sold 148 DVDs

(approx. EUR 2,092) to two clubs in Podgorica. Sales

increased five times between December 16 and February 10,

2006, to 749 DVDs (approx. EUR 10,506) to nine clubs in

Podgorica. He attributes this success to the effective

enforcement and PR activities of the Montenegrin government.

¶11. (U) On February 1, 2006, Montenegrin Prime Minister Milo

Djukanovic together with Bill Gates signed a three-year

contract, providing software licenses to Montenegrin

educational and scientific institutions. In September 2005,

the GoM and Microsoft concluded a USD 2.36 million contract,

creating a strategic partnership between the GoM and

Microsoft for legalization of all the Microsoft software

being used by state institutions. By mid-March, Microsoft

and local governments in Montenegro will have completed the

licensing of software used by the municipalities.

¶12. (U) In January 2006, Microsoft's local business partner

introduced a public campaign of flyers and billboards, "Stop

Piracy," advising that licensing current software is "as easy

as 1, 2, 3: Count PCs, Order License, Done."

¶13. (U) In addition to the steps under the agreed Action

Plan, Montenegro's first society of composers and artists was

registered on January 9, 2006. Registration will allow for

the collection and distribution of royalties for use of

protected works.

¶14. (U) Compared to Montenegro's status a year ago (Reftel

E), it has made significant although not complete progress

towards our agreed goals in protecting intellectual property.

Government action has proceeded at an acceptable pace. Final

passage of the Law on Optical Discs and amendments to the

Penal Code by Parliament may be delayed, as political

attention is consumed by the central question of possible

independence of Montenegro from Serbia, which will likely be

decided by referendum in the second quarter of 2006.

ENFORCEMENT IMPROVED BUT PR WAS LACKING

---------------------------------------

¶15. (U) As mentioned in the IIPA submission, enforcement

improved in Serbia in 2005. Through numerous discussions

with the Business Software Alliance, they expressed

satisfaction with police efforts to raid facilities and

arrest street vendors. The number of guilty verdicts

rendered, though small, was a significant improvement from

2004.

¶16. (U) However, subsequent press releases, touting the

success of these enforcement activities, were not

forthcoming. The private sector was frustrated with the

unwillingness of ministries to permit the use of the results

in an effective anti-piracy campaign.

¶17. (U) The Embassy participates in the AmCham IPR Working

Group that consists of representatives from the various

stakeholder industries. One of the main recommendations of

the group is for the government to appoint an agency and

spokesperson to cooperate with the private sector in its

anti-piracy campaign. Such a partnership between the

government of Serbia and the private sector would deliver a

clear message to the public that piracy will not be tolerated

in Serbia.

ADDITIONAL IPR AREAS OF IMPROVEMENT NOT IN IIPA REPORT

--------------------------------------------- -----

¶19. (U) Discussions with representatives from the

pharmaceutical industry indicate that there have been

improvements in the area of data exclusivity. On November 1,

2005, a new Regulation on the Licensing of Medicinal Products

went into force which provides for the protection of clinical

data in the licensing application process. Therefore,

generic companies cannot use clinical data from research-

oriented pharmaceutical companies for up to six years for

original products and up to 10 years for high tech products.

This regulation was welcomed by the industry, and we were

told that a generic license application was already denied

due to usage of protected clinical data.

¶20. (SBU) As a part of the WTO accession talks, Serbia has

agreed to begin drafting a law for the protection of

undisclosed trade secrets. According to Article 39 of TRIPS,

members must ensure effective protection against unfair

competition by establishing a regime which protects

undisclosed trade secrets from unfair commercial use.

TRAINING

--------

¶21. (U) Serbia could benefit from further training in the

inspectorates (market and tourist) under the auspices of the

Ministry of Trade. A precondition for this training would the

passage of the Enforcement Law, which will provide powers for

them. Both the Serbian Customs Administration and the

Montenegrin Customs Administration with its line inspectors

could benefit from additional training in how to detect and

intercept export and especially import of counterfeit goods.

EXPECTED NEXT STEPS

-------------------

¶22. (U) Based on input from the AmCham IPR working group, we

have drafted a proposed action plan for 2006. We see five

key action items that would further improve IPR protection

and address U.S. industry concerns:

- Ensure "fast-track" approval of new IPR Enforcement Law in

Serbia that will provide powers for market inspection, tax

inspectors and police to act whenever pirated or counterfeit

goods are found and make companies liable for criminal

penalties.

- Tax inspectors and police should have powers to act ex

officio in search for non-licensed software and other IPR

infringements during their regular controls, whether through

effective enforcement of the current Law on Tax

Administration or through an amendment to the IPR Enforcement

Law.

- In both Serbia and Montenegro prepare, approve and fast-

track in the parliamentary procedure the Law on Optical

Discs, in order to regulate commercial production and

duplication of optical discs, which is the medium commonly

used to infringe IPR.

- Appoint a government agency and spokesperson with the task

of cooperating with the private sector to effectively promote

the enforcement activities of the government by releasing

statistics of raids conducted, optical discs seized, etc.

- Passage of the amendments to the Penal Code in Montenegro

that will provide full criminal protection of IPRs.

¶23. (SBU) Some government officials have been receptive to

these action items in recent meetings, and we will urge the

GOS and GOM to move forward. Our approach is to secure an

agreed, time-bound, action plan for addressing these issues

as a work program for 2006. The Ambassador will be

conducting meetings with senior officials in Belgrade in the

coming days to test their receptiveness to implementing these

measures. We will continue to provide targeted assistance to

help the governments fulfill this action plan and to build

institutional capacity to combat and prosecute piracy.

Recommendation

--------------

¶24. (SBU) The Special 301 process is a useful tool to advance

our interests with respect to IPR protection. The IPR

environment in SAM is not currently satisfactory, but it is

steadily improving. The key question here is whether putting

SAM on the Watch List would prompt stronger government action

and bring us closer to our goals. However, the history of

our bilateral relations since the Milosevic period suggests

that putting SAM on the Watch List will be viewed as a

"sanction," no matter how we characterize it. Such a step

would also come during a time of political uncertainty

regarding the Montenegrin referendum for independence as well

as negotiations on the final status of Kosovo (and, possibly,

suspension of assistance for lack of ICTY cooperation).

¶25. (SBU) Both the State Union and republic-level governments

of Serbia and Montenegro took seriously our warning in 2005

that it risked placement on the Special 301 Watch List, and

the result has been effective actions to remedy shortfalls in

IPR protection. However, we fear that placing SaM on the

watch list now, when the two governments are focused on

staying off the list to provide a contrast to other

neighboring countries, like Bulgaria and Croatia, would

backfire. We are hoping for further progress on the basis of

our recent proposal a new action plan. To avoid any slowing

of the momentum that has been generated, we recommend against

placing the Serbia and Montenegro on the Watch List.

MOORE

● 09.15.11

●● Cablegate: Microsoft’s “Relationship With the Government” and Pressure for Countries to Adopt Intellectual Monopolies Using Shame Lists

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