February 8, 2013 Mr. Stanford McCoy Assistant U.S.

Trade Representative For Intellectual Property and Innovation Office of the United States Trade Representative 600 17th Street, N.W. Washington, D.C. 20508 Re: 2013 Special 301 Comments on Piracy of Nintendo Video Game Products Dear Mr. McCoy: Nintendo of America Inc. (Nintendo) submits this letter in response to the Request for Written Submissions From the Public which appeared in the December 31, 2012 Federal Register. In that notice, the Office of the United States Trade Representative (USTR) requested comments pursuant to Section 182 of the Trade Act of 1974 (19 U.S.C. 2242), known as Special 301, on countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. Nintendo has provided information to the International Intellectual Property Alliance (IIPA) which is included in the filing of that organization. Nintendo is associated with the IIPA through its membership in the Entertainment Software Association (ESA). This letter provides more detailed information on piracy of Nintendo video game products, with an emphasis on Internet piracy, along with Nintendos Special 301 placement recommendations. Nintendo, along with its publishers and developers, is injured by the prevalence and ease of illegal online distribution, as well as the continued manufacture, assembly, distribution, import, export and sale of counterfeit Nintendo video game products across the globe. In the past few years, the scope of online piracy for Nintendo has grown dramatically. Every month tens of thousands of illegal Nintendo game files are detected on the Internet. The legal environment to limit the flow of these files remains extremely challenging. Theft of Nintendos video games illegally shared over the Internet impacts all who create, develop, market and sell video games for the Wii U, Wii, Nintendo 3DS and the Nintendo DS 1

family of handheld systems. Surging Internet piracy continues to result in lost sales, lost jobs, lost taxes for local, state and national governments, as well as the loss of incentives to create and innovate. Despite the operation of Nintendos anti-piracy programs in over 40 countries, worldwide piracy of Nintendo video game products remains a chronic problem resulting in huge losses. Special 301 has proven to be a highly effective tool in highlighting those countries that do not provide adequate protection of copyrights and trademarks. For 2013, Nintendo recommends that USTR designate: (1) Brazil remain on the Watch List; (2) China for monitoring under Section 306 of the Trade Act and continued placement on the Priority Watch List; (3) Mexico remain on the Watch List; and (4) Spain to be elevated to the Watch List.

NINTENDO OF AMERICA INC.

Nintendo of America Inc., based in Redmond, Washington, serves as headquarters for Nintendos operations in the Western Hemisphere and markets the highly successful line of Nintendo video game products. Nintendo has branch offices in Redwood City, California and New York, New York. Also located on Nintendos campus in Redmond is Nintendo Software Technology Corporation which creates game software for Nintendos video game systems. In 1999, Retro Studios was founded in Austin, Texas as a sister-company to Nintendo of America Inc. Retro is a development studio dedicated to creating products for Nintendo. Nintendo holds the companys intellectual property rights, including copyrights and trademarks, in the Western Hemisphere. In addition, Nintendo coordinates the worldwide anti-piracy program on behalf of its parent company, Nintendo Co. Ltd. of Kyoto, Japan. Nintendo video game hardware platforms (i.e. Wii U, Wii, Nintendo DS, Nintendo DSi and Nintendo 3DS) play Nintendos proprietary game software as well as proprietary game software created by its third party licensees. Hundreds of U.S. companies independently create, license, market and sell Nintendo video game products. Worldwide piracy of Nintendo products also adversely affects the earnings and employment of these companies.

Table of Contents
Nintendo Video Game Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Internet Piracy and Circumvention Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Nintendo Infringing Hard Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

NINTENDO VIDEO GAME PRODUCTS

Console Name
Wii U Nintendo 3DS Nintendo DS family of systems

Release Date
November 18, 2012 March 27, 2011

Units Sold To Date

3.06million WW 29.84 million WW

April 5, 2009

153.67 million WW

(inclusive of DS Lite, DS and DSi)

Wii

November 19, 2006

99.38 million WW

Nintendo Marquee Characters (Appeared in 1 Million+ Sellers)

Mario Pikachu Donkey Kong Diddy Kong Dixie Kong

First Appearance

1981 in Donkey Kong, Arcade 1996 in Pokmon Green (Japan only), Game Boy 1981 in Donkey Kong, Arcade 1994 in Donkey Kong Country, Super NES 1995 in Donkey Kong Country 2: Diddys Kong Quest, Super NES

Zelda and Link Yoshi Star Fox Kirby Wario Samus Aran

1997 in The Legend of Zelda, Nintendo Entertainment System (NES) 1991, Super Mario World, Super NES 1993, Star Fox, Super NES 1992, Kirbys Dream Land, Game Boy 1983, Mario Bros., Arcade 1989, Metroid, Nintendo Entertainment System (NES)

INTERNET PIRACY AND CIRCUMVENTION DEVICES

The most common way to play illegal Nintendo video games downloaded from the Internet for free is to use circumvention devices, such as game copiers or modification chips. Therefore, the trafficking in, sale and use of these devices facilitate Internet piracy.

Game Copiers: Game copiers are circumvention devices used to bypass the security embedded in Nintendo DS handheld systems to allow users to play illegal video games downloaded from the Internet. Nintendo makes video games available for download on the Internet only through its proprietary systems. Hence, all Nintendo game files offered via the Internet for download are illegal copies. The following section illustrates how game copiers work to circumvent Nintendos security and how these circumvention devices facilitate the downloading of illegal game files from the Internet.

This is a popular game copier. A USB-to-Micro SD flash memory card reader (included in packaging) is used to transfer illegal games downloaded from the Internet from computer to a Micro SD flash memory card.

The game copier card (included in packaging) is designed exactly like an authentic Nintendo DS game card (except for the addition of a slot at the top of the game copier card to accept a Micro SD flash memory card). This card contains copyright protected Nintendo software (logo data) used to bypass the security of the Nintendo DS systems security measures.

The user purchases the Micro SD flash memory card separately. Game software is illegally downloaded from the Internet and stored on this Micro SD flash memory card.

The Micro SD flash memory card containing illegal game files is inserted into the game copier card.

The Micro SD flash memory card is here. The R4 game copier is the most popular in the world. The game copier card is inserted into the Nintendo DS card slot on the Nintendo DS system to play the illegal game files.

Game Copier Card v. Authentic Nintendo DS Game Card

Game copier card (note the Micro SD flash memory card in the slot)

Authentic

Internet Piracy
The trafficking in, sale and use of circumvention devices facilitate Internet piracy of video games because the most common way to play illegal Wii or Nintendo DS game files downloaded from the Internet on Nintendo video game systems is by using circumvention devices, such as the abovementioned game copiers and mod chips. Certain terms, defined below, are commonly used when discussing Internet piracy. Internet Piracy Definitions: Cyberlinker - "Cyberlinkers," also known as "indexers," are websites that collect the links (a.k.a. URLs) for infringing content that users have uploaded and stored on cyberlockers. For a cyberlinker to be most effective, it must be vigilant in gathering the most up-to-date links, eliminating those which no longer work (either because the original user removed the file, the file was corrupted somehow or a copyright owner had requested the file to be removed). The most popular cyberlinkers usually have a dedicated community that contributes links (either from uploading the infringing content themselves and sharing the link, or finding a working link from another source and sharing it). Cyberlocker - "Cyberlockers," also known as "sharehosts," "one-click hosts," or "direct downloads (DDL)" are websites that provide storage space (varying in size but usually at minimum several hundred megabytes, and at maximum a few gigabytes) for any file type a user wishes to upload and store. After uploading a file, a user is commonly given a password and/or a direct URL to access that file. Many users use this functionality to store infringing content. Marketplaces - Any auction site, trade board or classified listing website, like eBay, Craigslist, Mercado Libre and Alibaba, operated with the express purpose of allowing users to advertise, buy and sell products. These websites vary from auction-style bidding to periodic sales postings or classified ads for services offered by other users. In many cases, users looking to profit from illegal hard goods abuse these websites. Monitoring & Enforcement - These terms describe the manual or automated search techniques to locate and identify infringing content combined with manual or automated issuance of legal notification (DMCA takedown notices, Cease-and-Desist Letters or other legal warnings) to the appropriate Internet Service Provider (ISP). Rights owners will either perform such techniques in-house, or hire vendor companies who specialize in these services, as way to determine what infringing content is available online and act upon it.

Peer-to-Peer (P2P) Networks - Computer networks, like BitTorrent and eDonkey, established between users who share illegal Nintendo game files (or parts of files) among themselves. Users download illegal Nintendo game files through accessing P2P portal sites. P2P Portal Sites - Websites that offer links, trackers, or indices to connect users to the P2P networks for downloading illegal Nintendo game files. Webshops/E-Commerce Sites - Internet retailers offering/distributing hard goods (game copiers, mod chips, counterfeit Nintendo products) via a website. Each website typically has one individual seller per website with no take-down procedure for notification of infringement.

Most Prevalent Types of INTERNET PIRACY Impacting Nintendo Cyberlockers

Cyberlocker Linking Sites. Facilitate location of content

(Hosted Content)
Examples Megaupload, Hotfile

Direct Download/ROM sites

(Hosted Content)
Examples DS Downloads

Websites. Facilitate sale of pirated games to consumers

(Content Made Available by Individual Users)

Examples BitTorrent, eDonkey

P2P Networks

P2P Portal Sites. Facilitate location of P2P Content

Auction Sites, Trade Boards, Webshops

(Hard Goods)
Example- eBay, Craigslist, Alibaba

Sale of Hard Goods to Consumers, Distributors

10

INFRINGING NINTENDO HARD GOODS

The chart below shows Nintendo video game products confiscated worldwide during seizures from 2008 to 2012. Seizures include illegal copies of Nintendo games, circumvention devices and component parts. Nintendo believes the increase in online piracy has caused a decrease in seized hard goods products, a trend Nintendo expects to continue.
Total Number of Infringing Nintendo Hard Goods Seized 2008 - 2012
600,000 500,000 400,000 300,000 200,000 100,000 0 U.S./Canada Asia Europe Latin America 2008 2009 2010 2011 2012

* *

* *

* *

11

BRAZIL
Nintendo recommends that Brazil remain on the Watch List.

Internet piracy continues with no adequate legal infrastructure in place to respond to the threat it poses to rights holders.

Hard goods piracy for Nintendo persists in Brazil, with trends pointing toward a shift to Internet piracy. Two popular areas for Internet access to illegal Nintendo video game files are through peer-to-peer (P2P) and Portuguese language link sites (cyberlinkers) that link to host sites (cyberlockers), most of which are not hosted in Brazil.

Illegal P2P downloads

The chart on the following page lists the top 10 countries where illegal P2P downloads are most popular for Nintendo video games. Data comparing 2012 to 2011 shows that Brazil moved up on Nintendos top 10 chart of illegal P2P downloads from 8th in 2011 to 3rd in 2012. Notably in the same region, Mexico and Chile moved to the top 10 this year (though neither would have made the top 10 under 2011 standards). Nintendo expects to see an upward trend of Illegal P2P downloads of video games in South America in 2013, as more countries in the region increase broadband penetration and overall Internet connections. The 2012 decrease in overall number of downloads compared to 2011 is likely due to factors such as fewer Nintendo video game releases and thus fewer games to monitor, as well as less popular games as anticipation built for the release of the Wii U, and improved security in Nintendos newer consoles.

12

Illegal P2P Downloads of Nintendo Games January 1, 2012 to December 31, 2012 (Source: DtecNet)

Italy Spain Brazil

5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

USA France Germany Mexico Chile UK Russian Federation

Illegal P2P Downloads of Nintendo Games January 1, 2011 to December 31, 2011 (source: DtecNet)

USA Italy Spain

5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

Germany China France UK Brazil Japan Canada

Despite factors that led to lower 2012 P2P downloads overall, Brazil numbers notably still increased by one-third (see chart on next page). 13

BRAZIL Illegal P2P Downloads of Nintendo Games 2010 - 2012 (Source: DtecNet)

1,000,000 800,000 600,000 400,000 200,000 0

2010 2011 2012

Portuguese Language Link Sites That Link to Host Sites (most not hosted in Brazil)
In Brazil, cyberlockers (host sites) remain one of the most popular file sharing protocols, with easy access provided by Portuguese language linking sites. The example on the next page Baixar jogos completes translates to Download full games.

Unfortunately, identifying infringing content on host sites is a challenge because the majority of Brazilian link sites use unique, localized encryption services to hinder automated scanning, detection and verification of links to infringing files. Most cases require a manual search effort limiting the total amount of identifiable and enforceable links.

14

15

Internet Auction Sites in Brazil

Internet auction sites provide an easy and relatively anonymous platform for transactions of infringing products, especially game copying circumvention devices. MercadoLibre.com is Latin Americas largest online trading platform with headquarters in Argentina and a branch office in Brazil (mercadolivre.com). The chart below shows that the number of listings on Mercado Libre selling game copiers in Brazil doubled in 2011 and then exploded in 2012 revealing a high demand for the circumvention devices needed by Brazilians to play downloaded illegal video games. Nintendo appreciates the high compliance of take-down notices through Mercado Libre. Nintendo has worked hard to educate auction sites around the world regarding which products are illegal and why.

Statistics compiled by Nintendos monitoring service show Brazilian auction sites offer twice as many circumvention devices than any other country. It also shows that take-down notices do not deter sellers from listing illegal products on the auction site. Enforcement by the government, as well as publicity of actions against infringers, would help deter the sale of game copiers on auction sites, especially with respect to repeat sellers, and educate consumers against purchasing devices from these sites in the future. Mercado Libre covers 13 Latin American markets, and Brazil is its largest. Internet Auction Sites - Number of Listings of Game Copiers on Mercado Libre (Source: MarkMonitor)
30,000 25,000 20,000 15,000 10,000 5,000 0

2010 2011 2012

16

Top 10 Countries Offering Game Copiers for Sale 2012

(Source: MarkMonitor) Number of game copier listings found per month / per country via online marketplaces
Jan 2247 1299 809 325 314 422 336 126 185 164 Feb 3023 651 970 46 303 289 228 53 147 130 Mar 2487 786 781 602 388 221 211 144 94 84 Apr 2469 734 520 116 345 202 181 96 61 84 May 3612 793 610 183 293 147 184 119 96 95 June 3313 973 659 87 319 227 157 115 77 131 July 2242 926 547 860 306 178 213 115 96 123 Aug 2568 1042 558 1154 394 191 222 95 64 100 Sept 4007 1412 492 562 333 191 146 104 86 65 Oct 1818 1616 680 504 391 167 173 146 139 92 Nov 364 1749 508 268 363 251 222 135 158 120

1 2 3 4 5 6 7 8 9 10

Country Brazil United States New Zealand China Netherlands Venezuela Mexico Chile Costa Rica Canada

Dec 350 2087 451 162 458 423 197 151 194 119

Total 28500 14068 7585 4869 4207 2909 2470 1399 1397 1307

Top 10 Countries Offering Game Copiers for Sale 2011

(Source: MarkMonitor)
May 1626 3161 1214 307 182 659 152 384 181 107 June 8357 2124 1203 608 414 246 423 292 182 162 July 542 1358 1062 602 838 165 602 181 204 94

1 2 3 4 5 6 7 8 9 10

Country China United States New Zealand Brazil Venezuela Spain Mexico Canada Netherlands Chile

Number of game copier listings found per month / per country via online marketplaces
Jan 1171 1808 372 311 425 523 199 311 45 118 Feb 506 1339 573 287 251 428 201 173 86 83 Mar 1837 2053 806 375 259 541 255 228 108 147 Apr 1134 3379 712 423 300 449 287 321 115 125 Aug 994 1667 950 581 553 128 429 201 291 128 Sept 1308 859 668 344 625 204 333 116 283 89 Oct 1717 1146 568 464 386 198 264 151 328 140 Nov 5398 1017 721 415 240 141 241 190 298 97

Dec 2800 953 692 1031 584 141 286 152 329 115

Total 27390 20864 9541 5748 5057 3823 3672 2700 2450 1405

17

2012 Rate of Compliance with Take Down Notices BRAZIL

Source: MarkMonitor
100% 95% 90% 85% 80% 75% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mercado Libre was the only Marketplace to which Nintendo issued enforcement notices where the listing location was determined to be Brazil. Mercado Libre

2011 Rate of Compliance with Take Down Notices BRAZIL

Source: MarkMonitor
100%

95%

Mercado Libre

90%

Mercado Libre was the only Marketplace to which Nintendo issued enforcement notices where the listing location was determined to be Brazil. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

85%

Brazil has never acceded to the WIPO Copyright Treaty and has no specific laws to protect IP owners from the unauthorized circumvention of technical protection measures, nor laws holding Internet Service Providers liable for hosting infringing web sites. This poses serious challenges when addressing the growing problem of IP violations and illegal downloads available on Brazilian web sites. It is critical that laws be passed addressing these two serious shortcomings.

18

High Tariffs and Taxes Drive Up Prices On Authentic Hardware

Piracy is attractive in Brazil in part due to the extraordinarily high cost of authentic goods driven up by high tariffs and taxes imposed on imported authentic video game products.
Average Wii, Nintendo DSi, Nintendo 3DS and Nintendo 3DS XL Hardware Price in U.S. Dollars
$600 $500 $400 $300 $200 $100 $0 Brazil Mexico U.S. $396 $445 $318 $247 $272 $202 $155 $170 $130 $99 $200 $544 Wii HW DSi HW 3DS HW 3DS XL HW

Recommendations
Adopt and strictly enforce new laws that explicitly protect against the circumvention of technical protection measures and trafficking in circumvention devices; hold Internet Service Providers responsible for facilitating piracy under certain circumstances including a requirement that ISPs take down infringing content when notified by a rights holder representative. Publicize legal actions and raids taken against infringers, especially for online piracy, to increase awareness and deterrence. Bring criminal prosecutions of major infringers, including those facilitating piracy on the Internet. The courts must impose stronger penalties against IP crimes (both traditional forms of piracy and online piracy) to raise awareness and foster deterrence.
*****

19

PEOPLES REPUBLIC OF CHINA

Nintendo recommends that China remain on the Priority Watch List and subject to Section 306 monitoring.

China continues to be the hub of production for infringing Nintendo video game products, including circumvention devices. Lax enforcement in China by authorities negatively impacts all areas including scant customs seizures, few raids, and weak penalties. Internet piracy enforcement in China requires a unique approach depending on whether the infringing goods are sold on auction sites, through web-retailers, shared through P2P networks, or downloaded directly.

For over a decade, China has been the hub of production for infringing Nintendo video game products, including circumvention devices. China is the leading worldwide exporter of these illicit goods. Customs services in nine countries, including the U.S., across three continents seized over 36,000 infringing Nintendo video game products sourced from China in over 254 separate seizure actions in 2012. This sourcing of products from China is key to understanding the scope of Nintendos challenges with piracy. Furthermore, the Intellectual Property Rights: Fiscal Year 2012 Seizure Statistics Report published by U.S. Customs and Border Protections (CBP) Office of International Trade, states that 72% of all seized products in 2012 was sourced from China.

Chinese Customs
Chinese Customs must improve its efforts in 2013 to prevent exportation of game copiers and other infringing products from China. As millions of infringing products continue to escape China Customs inspection and are distributed around the world, far more attention must be placed on shipments leaving the country, especially those in small parcels. The growing trend of small packages carrying counterfeit and illegal products, sent via postal and carrier services, 20

poses the question: Is China Customs dedicating enough resources to thwart the export of goods at post offices, airports, and by local courier services? Traditionally, China Customs focuses more on stopping imports than halting export of illegal goods. The map below shows more than two dozen local and provincial customs offices where Nintendo conducted training programs in 2012, paying special attention to trainings offered by Customs Offices located at post offices and airports.

But as the graph illustrates on the next page, despite intensive training in the detection of counterfeit and infringing Nintendo products, China Customs detained only three shipments of suspected infringing Nintendo game products; seizing a mere 171 products in 2012. This is a substantial reduction from the 31 shipments and 4,266 products seized in 2011. Of equal concern, China Customs did not seize a single circumvention device in 2012, despite the focus on these illegal goods during Nintendo training programs. The recent US Department of Homeland Security report Intellectual Property Rights: Fiscal Year 2012 Seizure Statistics Report, published by U.S. Customs and Border Protections (CBP) Office of International Trade, finds an increase in the amount of seized counterfeit IPR goods sent by mail. Consistent with current trends, actual IPR seizures in the international mail and express facilities continued to outpace IPR seizures in cargo and other environments for FY2012. 21

Hard Goods Seized by China Customs vs. Numbers of Actions

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2010 2011 Products Actions 2012 171 0 20 10 4,266 50 40 30

6,733

China Customs should make education and training of its customs agents a priority in 2013 in order to learn about identification of counterfeit products and illegal goods such as circumvention devices. More importantly, vastly improving Customs performance will require a nationwide campaign to focus on this problem area and increase resources and directives to provincial customs authorities. The chart below identifies the local and provincial customs services that seized infringing Nintendo video game products in 2010 through 2012. Further, the bar graph shows the dramatic decline in the number of raids and goods seized by Customs authorities and Administrative Law Enforcement agencies from 2008 through 2012. Some of this decline is likely due to a worldwide shift to Internet piracy also taking place in China.

Customs conducting Seizures Guangzhou Customs Shenzhen Customs Hangzhou Customs Nanjing Customs Wenzhou Customs Shanghai Customs Kunming Customs Total

2010 6 33 2 1 1 0 0 43

2011 21 2 3 1 0 3 1 31

2012 3 0 0 0 0 0 0 3

22

The chart below includes all products seized in China through both (1) Customs authorities, and (2) Administrative raids (i.e., AIC).

450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

415,058

375,361 365,419

200 180 160 140 120 100 80 112,355 100,693 60 40 20 0

2008

2009

2010 Products Actions

2011

2012

Online Marketplaces
Despite increased enforcement on China-based marketplaces, a huge number of infringing Nintendo products listed on worldwide online marketplaces continue to originate from China. In 2011 (see chart on next page), China led all countries worldwide in game copier listings found per month. Nintendo has worked for several years with China-based marketplaces such as Taobao to reduce the availability of game copiers. While most of these marketplaces have improved enforcement against the devices (the updated 2012 chart on the next page shows China as #4 worldwide) the majority of game copier products listed for sale on worldwide marketplaces still originate in China.

23

Top 10 Countries Offering Game Copiers for Sale 2012

(Source: MarkMonitor) Number of Game Copier Listings Found per Month / per Country via Online Marketplaces
1 2 3 4 5 6 7 8 9 10 Country Brazil United States New Zealand China Netherlands Venezuela Mexico Chile Costa Rica Canada Jan 2247 1299 809 325 314 422 336 126 185 164 Feb 3023 651 970 46 303 289 228 53 147 130 Mar 2487 786 781 602 388 221 211 144 94 84 Apr 2469 734 520 116 345 202 181 96 61 84 May 3612 793 610 183 293 147 184 119 96 95 June 3313 973 659 87 319 227 157 115 77 131 July 2242 926 547 860 306 178 213 115 96 123 Aug 2568 1042 558 1154 394 191 222 95 64 100 Sept 4007 1412 492 562 333 191 146 104 86 65 Oct 1818 1616 680 504 391 167 173 146 139 92 Nov 364 1749 508 268 363 251 222 135 158 120 Dec 350 2087 451 162 458 423 197 151 194 119 Total 28500 14068 7585 4869 4207 2909 2470 1399 1397 1307

Top 10 Countries Offering Game Copiers for Sale 2011

(Source: MarkMonitor)
May 1626 3161 1214 307 182 659 152 384 181 107 June 8357 2124 1203 608 414 246 423 292 182 162 July 542 1358 1062 602 838 165 602 181 204 94

1 2 3 4 5 6 7 8 9 10

Country China United States New Zealand Brazil Venezuela Spain Mexico Canada Netherlands Chile

Number of Game Copier Listings Found per Month / per Country via Online Marketplaces
Jan 1171 1808 372 311 425 523 199 311 45 118 Feb 506 1339 573 287 251 428 201 173 86 83 Mar 1837 2053 806 375 259 541 255 228 108 147 Apr 1134 3379 712 423 300 449 287 321 115 125 Aug 994 1667 950 581 553 128 429 201 291 128 Sept 1308 859 668 344 625 204 333 116 283 89 Oct 1717 1146 568 464 386 198 264 151 328 140 Nov 5398 1017 721 415 240 141 241 190 298 97 Dec 2800 953 692 1031 584 141 286 152 329 115

Total 27390 20864 9541 5748 5057 3823 3672 2700 2450 1405

The most popular and well-known brand of game copier in the world is the R4, a brand of game copier manufactured almost exclusively in China. Based on a search of the term R4 card (game copiers are also referred to as flash cards in pirate terminology), the Global Sources online website shows four verified manufacturers: three from Mainland China and one from Hong Kong.

24

Global Sources (NASDAQ Symbol: GSOL), a Hong-Kong based B2B media company, provides sourcing information to suppliers and provides quality assurance reports of product manufacturers to prospective sellers. The Global Sources online website allows buyers to contact manufacturers directly regarding products. Global Sources launched its China Sourcing Fairs in 2003, with shows in Hong Kong, Mumbai, Dubai, Miami, Johannesburg and Sao Paulo. Based on Nintendos global marketplace Internet monitoring in 2012, R4 brand game copiers accounted for 49% of game copier listings on all marketplaces globally in 2012. Over 80% of all listings in seven of the other nine countries in the Top 10 (presented in the 2012 chart above) are for R4 game copiers (the other two countries, the United States and Canada, have 55% and 71%, respectively). Modifying the 2012 chart above to allocate all of these R4 game copier listings to China, easily makes the country #1 worldwide as shown in the chart below. Country 1 China 2 United States 3 New Zealand 4 Brazil 5 Netherlands 6 Mexico 7 Canada 8 Chile 9 Venezuela 10 Costa Rica Total 57881 6396 1346 1182 787 449 380 177 64 49

Shifting Internet Piracy in China Poses Unique IP Enforcement Challenges

One of Nintendos major challenges in China has been the manufacture, distribution and sale of circumvention devices that facilitate the downloading and play of illegal Nintendo games available via the Internet. Coupled with the shifts in growth of Internet piracy, the challenges remain significant. Data from 2011 confirms that China was one of the top 10 infringing countries in the world for illegal P2P downloads of infringing Nintendo games. China does not appear on the comparable 2012 chart and believe this is due to shifting consumer demand to different piracy protocols rather than major decreases in piracy in China.

25

In 2011, Nintendos Special 301 submission cited factors that help explain the deceptively low and inaccurate online piracy rate for China. One of the primary factors was that Internet monitoring services used by rightsholders had yet to fully grasp the Chinese language nuances in their monitoring techniques. In December 2012, Nintendo began testing a new service using Internet monitoring capabilities located in Mainland China that searches in Chinese (Mandarin). In roughly one month of testing, the service shows that cyberlockers/cyberlinkers and SNS (a Chinese form of blogging sites/BBS forums) were the predominant location for pirated Nintendo game files. Nearly 27,000 infringing links to pirated Nintendo game files were discovered and if extrapolated to a full year, would translate to be approximately 324,000 infringing links, placing China 8th among the top 10 countries worldwide in a 2012 P2P chart. Because cyberlocker links can provide access to multiple users, the potential downloads from those 324,000 infringing links easily could be double, triple or even quadruple that numberpropelling China to a top-5 or even top-3 country globally for Internet piracy of Nintendo game products.

Recommendations
Administrative authorities should issue stiffer penalties to ISPs, infringers, sellers/distributors of circumvention devices in an effort to curtail the production and distribution of illegal products. Customs at export must actively seize illegal products especially illegal circumvention devices leaving China for shipping abroad. The national government must place greater emphasis and dedicate increased resources to improving customs ability to halt the exportation of infringing items. Online marketplace websites must proactively monitor and remove listings of circumvention devices and terminate repeat infringer accounts. Also, the process for reporting IP violations to Administrative or other federal law enforcement bodies should be made clearer and more efficient for IPR owners. Given the increase in shipment of infringing products in small parcels, more efforts should focus on interdicting these shipments leaving the country, especially through postal channels. *****

26

MEXICO
Nintendo recommends that Mexico remain on the Watch List. Mexico must address the growing Internet piracy problems and increased sales of circumvention devices through online retailers. Mexico should elevate IP enforcement as a priority and demonstrate its commitment to doing so with an increase in prosecutions resulting in convictions with deterrent sentences.

Hard goods piracy in Mexico, found at notorious physical markets such as San Juan de Dios, Tepito, Pericoapa and Meave, remains a major problem for Nintendo. Despite occasional raids by authorities, these markets have sold illicit products for decades, with no end in sight. The only way to end this scourge is through a government commitment to provide resources that ensure permanent closure of markets offering counterfeit goods, and hold market owners accountable for the booths engaging in illicit activities, as well as aggressively prosecuting IP crimes and finding other creative strategies to stop the distribution of pirated Nintendo video game products and other counterfeit goods. The chart below shows the numbers of counterfeit Nintendo products seized in Mexico over the past four years. Seizures rebounded in 2012 after a dismal enforcement performance in 2011. Anti-piracy actions by authorities were especially deficient in 2011 due to changes in government agencies, lack of resources and no defined priorities.

Total Counterfeit Products Seized MEXICO

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

2009 2010 2011 2012

27

In 2012, criminal raid activity increased in the first half of 2012, yielding higher product seizure numbers for Nintendo. The second half of 2012, however, produced no raids due to lack of coordination between agencies (the specialized IP unit, police, and Attorney Generals office). IP enforcement with a consistent focus on deterring piracy must be a year-round priority for enforcement agencies. Raids must be followed with prosecutions, source investigations and indictments, or recidivist vendors will continue to sell infringing products. Unfortunately, without meaningful follow-up to raids in Mexico, there is little deterrent to piracy.

Illegal P2P Downloads

The Internet piracy trend in Mexico mirrors much of the rest of Latin America and the world Internet piracy increases with broadband penetration. Between 2010 and 2012, illegal P2P downloads of Nintendo video game files increased by more than 150%. The chart below shows that, for the first time since Nintendo began monitoring for Internet piracy, Mexico has entered the top 10 in illegal downloads. The Mexican Government cannot ignore the attraction of online piracy for Mexican consumers, and they must establish a legal infrastructure with resources to address piracy over the Internet now, as the problem certainly will become worse in the years ahead.

Illegal P2P Downloads of Nintendo Games January 1, 2012 to December 31, 2012 (Source: DtecNet)

Italy Spain Brazil

5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

USA France Germany Mexico Chile UK Russian Federation

28

The chart below gives P2P download figures for the past three years, showing the sharp trend in higher demand.

Illegal P2P Downloads of Nintendo Games in Mexico 2010 2012

(Source: DtecNet)

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

2010 2011 2012

The chart below presents the numbers of circumvention devices seized in Mexico over the past three years. The Mexican Government must recognize Mexicos video game piracy shift from hard goods to Internet piracy facilitated through use of circumvention devices.

Number of Circumvention Devices Seized in Mexico 2010 - 2012

3,000 2,500 2,000 1,500 1,000 500 0

2010 2011 2012

29

Internet Auction Sites in Mexico

Internet auction sites provide an easy and relatively anonymous platform for transactions of infringing products, including circumvention devices. In Mexico, consumers continue to trade and sell infringing products on the auction site Mercado Libre, which is based in Argentina and is the largest online marketplace in Latin America. Despite a decrease in 2012, Mexico remained a top 10 country for offering game copier circumvention devices for sale. The demand for game copiers correlates with demand to download infringing Nintendo content from the Internet (i.e., but for the game copiers (and other circumvention devices), pirated software would not play on Nintendo video game systems). Nintendo does appreciate the strong compliance of take down notices through Mercado Libre. Nintendo has worked hard to educate auction sites around the world regarding which products are illegal and why. Despite compliance by Mercado Libre, the continuation of sales of game copiers on online auction sites shows that take down notices do not deter sellers from listing illegal products on the auction site. Enforcement by the government and publicity of those actions against infringers could help to deter the sale of illegal goods on auction sites and educate consumers against purchasing infringing materials from these sites.

Top 10 Countries Offering Game Copiers for Sale 2012

(Source: MarkMonitor)
May 3612 793 610 183 293 147 184 119 96 95 June 3313 973 659 87 319 227 157 115 77 131 July 2242 926 547 860 306 178 213 115 96 123

1 2 3 4 5 6 7 8 9 10

Country Brazil United States New Zealand China Netherlands Venezuela Mexico Chile Costa Rica Canada

Number of Game Copier Listings Found per Month/per Country via Online Marketplaces
Jan 2247 1299 809 325 314 422 336 126 185 164 Feb 3023 651 970 46 303 289 228 53 147 130 Mar 2487 786 781 602 388 221 211 144 94 84 Apr 2469 734 520 116 345 202 181 96 61 84 Aug 2568 1042 558 1154 394 191 222 95 64 100 Sept 4007 1412 492 562 333 191 146 104 86 65 Oct 1818 1616 680 504 391 167 173 146 139 92 Nov 364 1749 508 268 363 251 222 135 158 120 Dec 350 2087 451 162 458 423 197 151 194 119

Total 28500 14068 7585 4869 4207 2909 2470 1399 1397 1307

30

Top 10 Countries Offering Game Copiers for Sale 2011

(Source: MarkMonitor) Number of Game Copier Listings Found per Month/per Country via Online Marketplaces
1 2 3 4 5 6 7 8 9 10 Country China United States New Zealand Brazil Venezuela Spain Mexico Canada Netherlands Chile Jan 1171 1808 372 311 425 523 199 311 45 118 Feb 506 1339 573 287 251 428 201 173 86 83 Mar 1837 2053 806 375 259 541 255 228 108 147 Apr 1134 3379 712 423 300 449 287 321 115 125 May 1626 3161 1214 307 182 659 152 384 181 107 June 8357 2124 1203 608 414 246 423 292 182 162 July 542 1358 1062 602 838 165 602 181 204 94 Aug 994 1667 950 581 553 128 429 201 291 128 Sept 1308 859 668 344 625 204 333 116 283 89 Oct 1717 1146 568 464 386 198 264 151 328 140 Nov 5398 1017 721 415 240 141 241 190 298 97 Dec 2800 953 692 1031 584 141 286 152 329 115 Total 27390 20864 9541 5748 5057 3823 3672 2700 2450 1405

Number of Listings of Game Copiers on Mercado Libre - MEXICO (Source: MarkMonitor)

4,000 3,000 2,000 1,000 0

2010 2011 2012

The Mexican website selling game copying circumvention devices shown on the next page reveals the ease of accessing devices in Mexico that circumvent TPMs and support online piracy.

31

Repeat Offenders Bring Game Copiers into Mexico

Sellers, distributors and suppliers of game copying devices continue to import and assemble products for Mexican informal markets. Nintendo is grateful that Mexican Customs notifies rights holders of seizures and provides other identifying information that allows Nintendo to recognize recidivist importers. In 2012, as just one example, Nintendo identified a single family importing into Mexico multiple shipments of circumvention devices presumably to supply informal markets in Guadalajara. Because Guadalajara customs stopped several shipments this year with similar identifying names and addresses, the importer started to import into Tijuana to avoid additional detainment / screening, according to conversations between the importer and undercover investigators. We now have this importer name on red alert with Tijuana Customs in the event he brings additional circumvention devices through Mexico. 32

September 2012 These products were shipped from Hong Kong and are not finished goods they are intended for in-country assembly and distribution.

Labels are not affixed to the product but shipped separately, again, for in-country assembly and distribution.

33

High Cost of Authentic Goods Makes Piracy More Attractive

Online piracy will continue to grow in popularity alongside Mexicos increased Internet usage accessing content via illegal distribution sites and file-sharing networks offers an easy and attractive alternative to purchasing legitimate goods at retail, especially when VAT taxes and additional logistics costs drive up prices for legitimate hardware and software. Average Wii, Nintendo DSi, Nintendo 3DS and Nintendo 3DS XL Hardware Price in U.S. Dollars
$600 $500 $400 $300 $200 $100 $0 Brazil Mexico U.S. $396 $445 $318 $247 $272 $202 $155 $170 $130 $99 $200 $544 Wii HW DSi HW 3DS HW 3DS XL HW

Mexico must recognize the technological evolution by updating its legislation by making the circumvention of technological protection measures a criminal offence in Mexico, including provisions to impose sanctions for distributing/trafficking devices that circumvent technical protection measures. Mexico also must address its lack of norms in the area of ISP responsibility. Mexico should dedicate additional resources and provide opportunities for all law enforcement authorities and judges dealing with intellectual property matters to regularly attend courses to improve their knowledge of IP laws and effective enforcement procedures. Mexican courts and prosecutors must prioritize IP cases, seeking convictions to create deterrence in the future. The Mexican Government must be consistent and place emphasis on actions to stop illegal vendors, suppliers and online piracy regimes especially concerning repeat infringers. ***** 34

Recommendations

SPAIN
Nintendo recommends elevating Spain to the Watch List.

More resources must be given to the IPC to effectively implement the intention of Ley
Sinde. Spain is a piracy haven for the global distribution of circumvention devices. The high level of downloads by Spanish users on P2P networks directly correlate to the availability and use of circumvention devices locally.

Spain remains one of the global leaders in the sale and distribution of circumvention devices and for illegal downloads of video games from the Internet. The Spanish Government has moved slowly to confront Internet piracy. Legislation to improve the piracy landscape in Spain finally passed in 2011. The law established the Intellectual Property Commission (IPC), but the IPC has been slow to address Spains wide spread piracy and must be given additional resources to fulfill its mission.

Illegal Peer-to-Peer (P2P) Piracy

The chart on the next page shows that Spain remains in the top three of Nintendos top 10 chart of illegal P2P downloads for 2012. Despite the huge population difference between the U.S. and Spain, Spain saw 80% more illegal downloads than in the U.S. in 2012. While the total number of downloads in Spain dipped in 2012 compared to 2011, Nintendo does not believe this reflects any impact of the Ley Sinde. The decrease is more likely due to factors such as fewer Nintendo video game releases and thus fewer games to monitor, as well as less popular games as anticipation built for the release of the Wii U, and improved security in Nintendos newer consoles.

35

Illegal P2P Downloads of Nintendo Games January 1, 2012 to December 31, 2012 (Source: DtecNet)

Italy Spain Brazil

5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

USA France Germany Mexico Chile UK Russian Federation

Illegal P2P Downloads of Nintendo Games January 1, 2011 to December 31, 2011 (source: DtecNet)

USA Italy Spain Germany China France UK Brazil Japan Canada

5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

Note: In 2011, 45 Nintendo titles were monitored. In 2012, 36 Nintendo titles were monitored.

36

The chart below shows the 10 most popular Spanish-language P2P Portal Sites. None of the domains have been registered in Spain, and non-Spanish Internet hosting providers host almost all of the websites, illustrating the separation between the content and the users trying to access that content.

Top 10 Most Popular Spanish-language P2P Portal Sites

P2P Portal Site divxtotal.com mejortorrent.com divxatope.com newpct.com Domain Registrar ENOM, Inc. GODADDY.COM, LLC INTERNET.BS CORP ENOM, Inc. Domain Registrar Country United States (Bellevue, WA) United States (Scottsdale, AZ) Bahamas United States (Bellevue, WA) Bahamas Bahamas United States (Scottsdale, AZ) United States (Scottsdale, AZ) United States (Bellevue, WA) India Webhost (ISP) Ecatel Rackmarkt S.L. Rackmarkt S.L. Intergenia T-N Media Ecatel Rackmarkt S.L. OVH Hispano OVH Systems CariNet Webhost (ISP) Country Netherlands Spain Spain Germany Germany Netherlands Spain Spain United Kingdom United States

gamestorrents.com INTERNET.BS CORP todocvcd.com INTERNET.BS CORP tomadivx.com GODADDY.COM, LLC lokotorrents.com GODADDY.COM, LLC torrentspain.com ENOM, Inc. contorrent.com PDR (Public Domain Registry.com)

37

Cyberlocker Piracy
Top 10 Spanish Language Linking Sites January 1, 2012 to December 31, 2012
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 vagos.es gratisjuegos.org argentinawarez.com ba-k.com emudesc.net pordescargadirecta.com sinjuegospc.com descargarjuegosmx.com chilecomparte.cl todoroms.com

The chart above and table below further illustrate the foreign hosting trend for Spanish Internet user piracy.

Link Site vagos.es gratisjuegos.org argentinawarez.com ba-k.com emudesc.net pordescargadirecta.com sinjuegospc.com descargarjuegosmx.com chilecomparte.cl todoroms.com

Country Netherlands United States of America United States of America Spain Spain Spain United States of America Netherlands Colombia Spain

ISP LeaseWeb B.V. SoftLayer Technologies SoftLayer Technologies Ovh Systems Ovh Systems Comvive Servidores S.L. Hosting Solutions International RouteLabel V.O.F. IFX NETWORKS COLOMBIA Ovh Systems

Web Pages 1050 1154 824 604 430 272 83 27 83 124

Files Shared 2231 2027 1431 1139 730 481 170 151 185 194

Web Infringements 16738 11957 9198 8680 4000 3466 1890 1640 1355 1289

TOTAL

4651

8739

60213

38

Circumvention Devices Remain Widely Available In Spain

Nine out of ten of the most popular (by traffic ranking) e-commerce sites that offer circumvention devices for sale within the European Union are hosted and operate from Spain (as demonstrated in the below table). These e-commerce sites specialize in the sale of game copiers not only to Spanish customers but also deliver to the majority of EU Member States and beyond (including shipping to the US).

Domain

Selling Country

ISP Hosting Country

Est. Daily Visitors 12,500 6,800 5,200 4,800 3,800 4,600 3,800 3,600 2,700 3,100

Language

ISP Name acens Technologies, S.L. Ovh Systems Grupo Interdominios S.A ONO Affinity Internet Axarnet Comunicaciones SL R cable y telecomunicaciones acens technologies Ovh Systems LeaseWeb B.V.

chipspain.com discoazul.com locuradigital.com e-nuc.com electronicweb2001.com incopia2.com todoconsolas.com euroconsolas.com foxchip.com tuconsola.com

Spain Spain Spain Spain Spain Spain Spain Spain France Spain

Spain Spain Spain Spain United States Spain Spain Spain France Netherlands

Multiple Multiple Spanish Multiple Spanish Spanish Spanish Spanish French Multiple

As Nintendo has obtained more and more positive court decisions against game copier sellers in other EU Member States (e.g. France, Germany, Italy, UK, Belgium and the Netherlands), Nintendo has identified an increase in the number of e-commerce sites selling game copiers

39

operating from Spain to such an extent, that in Nintendos opinion (and confirmed by the data set out in the above table) Spain has become a haven for sellers of game copiers. Spain has ratified the WIPO Copyright Treaty (WCT) and has faithfully transposed the respective provisions of the Copyright and Computer Programs Directives into national law (Intellectual Property Code) but gaps still exist in its criminal law provisions for the protection of copyright works against the commercial dealing of devices designed to circumvent technological protection measures (TPMs). These gaps have led to an inconsistent application of the criminal law provisions by Spanish criminal courts. Since 2007, a number of prosecutions brought by the Spanish authorities and supported by the video games industry association (ADESE) or by Nintendo (both acting in their capacity as a civil party) have borne out these deficiencies in the criminal law provisions. Multiple criminal cases are being erroneously concluded because the test the courts are employing involves applying a standard that requires the circumvention devices that are the subject of the case be specifically designed for purposes of circumvention, thus imposing liability only if the device is shown to be incapable of non-infringing uses. In interpreting this provision, the Spanish criminal courts have been distracted by the potential secondary use of circumvention devices once the TPMs are circumvented by the device, although these secondary uses cannot be undertaken without first circumventing the TPMs deployed in authentic games and consoles. In taking such a narrow approach, the Spanish Courts are effectively undermining and nullifying the overall objective of these anti-circumvention provisions. Once these devices circumvent the TPMs the user is then capable of performing, within reason, any secondary uses and most users will use the device to play unauthorized copies of pirated games (in fact the charts in the above chart confirm this) but there will always be the option of secondary non-infringing use. This option, however commercially insignificant should not be able to defeat the overall intention and objective of the anti-circumvention provisions. In addition, with respect to video games, multiple copyrighted works are being protected by the TPMs employed by rights holders but there is no explicit language in the Spanish Penal Code transposing the respective provision of the EU Copyright Directive (Article 6) as it applies to 40

copyright works other than computer programs. The current language of Article 270.3 of the Penal Code does not expressly include a prohibition against the trafficking of devices primarily designed for the purposes of circumvention or which have only commercially limited uses other than circumvention. Having such wording included explicitly in an amended provision of the Penal Code can only add clarity and greater consistency where Spanish criminal judges seek to apply this provision. Legislative amendments would ensure that the provisions function as intended to effectively prosecute the importation and distribution of circumvention devices because unfortunately, many Spanish courts have interpreted the statute as imposing liability only upon proof that the sole purpose of the device is to circumvent TPMs in order to facilitate piracy. As a result, defendants engaged in the commercial distribution of devices primarily used to defeat Nintendos TPMs (and thus enable the use of infringing copies of games) routinely escape liability by simply arguing that such devices are capable of incidental and commercially insignificant and secondary non-infringing uses. Below is a list of negative judgments rendered by Spanish criminal courts (where Nintendo acted as civil party) based on their interpretation of the Spanish Criminal Code. May 31, 2010 - Investigation Court #11 Sevilla (Cayo Sistemas case) March 24, 2011 - Investigation Court #4 Salamanca (Movilquick case) May 6, 2011 - Investigation Court #3 Ciudad Real (Francisco Salinero Palomares case) June 6, 2011 - Penal Court #1 Aviles (Alechip case) April 23, 2012 - Appeal Court Ciudad Real (Francisco Salinero Palomares case) June 12, 2012 - Penal Court #21 Madrid (1314 Informatica case)

Not all cases have been lost -- the following are positive judgments: Criminal Court of Madrid, 26 March 2012 Considers Art 270.3 of the Criminal Code. Defendant liable for selling Game Copiers which were devices for piracy which circumvent Nintendo's software protection measures. Custodial sentence suspended in lieu of a fine. Criminal Court Palma de Mallorca, 15 February 2011 Articles 270.1 and 270.3 of the Criminal Code. Sale of devices (Game Copiers) which circumvent the TPMs applied by Nintendo. Custodial sentence suspended in lieu of a fine. Criminal Court Palma de Mallorca, 10 September 2010 Games copier case under Art 270.1 of the Criminal Code. Ordered to pay 4,000 damages to Nintendo as well as a fine. 41

Recommendations
Additional resources are required to support and respond to complaints filed by rights holder associations before the IP Commission. These additional resources to allow the IPC to more efficiently process a greater volume of complaints. Since so many illegal video games are downloaded in Spain from foreign-based cyberlockers, and accessed through cyberlinkers or P2P linking sites hosted outside Spain, the IPC must address this issue by authorizing the blocking of linking sites. Courts should be provided with greater resources to take on additional IP cases. Due to an overloaded Spanish judicial system, IP cases move too slowly to resolution. The reform of the Penal Code should include an amendment for new Article 270.4 stating:
"The same penalty shall also be applied to those who manufacture, import, distribute, put into circulation, make available, sell, rent, advertise for sale or rental, or possess for commercial purposes any means, device, product or component or who performs or provides a service which is primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of any effective technological measure that is used to protect any of the other works, interpretations or implementations in the terms set out in Section 1 of this Article (Article 270 of the

Spanish Criminal Code).

*****

42

CONCLUSION
The Special 301 process has become one of the most effective tools the U.S. has to encourage countries to make the necessary commitment to improve their intellectual property protection to the level of international standards. Nintendo of America Inc. respectfully submits its recommendations on Brazil, China, Mexico and Spain. Nintendo welcomes the opportunity to work with USTR and other involved federal departments and agencies in any way possible to reduce piracy in all countries, and would be pleased to provide any further information or documentation. Very truly yours, NINTENDO OF AMERICA INC.

Jacqualee J. Story Executive Vice President, Business Affairs

43