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World: International Intellectual Property Alliance Lists Pirates

Washington, 26 February 1998 (RFE/RL) -- An organization of U.S. intellectual property trade associations says the piracy of movies, sound recordings, computer software and books around the world cost American producers alone over $10.7 billion in 1997.

The International Intellectual Property Alliance (IIPA) singled out Bulgaria and Greece as two of the most egregious havens for pirates among the 55 countries it says should be identified in the U.S. Trade Representative's (USTR) annual list to be issued April 30.

Among the countries the IIPA wants listed for the first time are Belarus, Estonia, and Kazakhstan. It recommends that Russia, Romania, Poland, the Czech Republic, Hungary and Turkey be kept on the list.

IIPA Executive Director Eric Smith says that while the level of piracy of intellectual products is a huge drain on the global economy, improved laws and better enforcement have brought "vast improvements" in dealing with pirates over the last 13 years.

The IIPA recommendations are in a nearly 500-page report it turned over to the USTR this week in Washington.

Bulgaria earlier this year was warned by the USTR that it faces eligibility for trade sanctions this spring if it doesn't act quickly and it came in for special complaint by the trade group.

"Bulgaria remains the largest source of CD (compact disc) and CD-ROM based piracy in Europe, and as such it is one of the world's leading exporters of pirated goods," said the IIPA report. Intellectual property theft in Bulgaria accounted for 99 percent of all computer programs produced in 1997, 90 percent of all sound recordings and 80 percent of all films. It cost U.S. companies alone over $207 million in stolen revenues.

Bulgaria has adopted the required laws and regulations, said the IIPA, but fails to enforce them or impose strong penalties. The new CD plant licensing law passed last month will only "add to the growing arsenal of unused legal controls against piracy," it said.

CD production capacity in Bulgaria, including government owned, controlled or influenced facilities, has grown by 33 percent to 60 million discs annually, in a country which only consumes one million per year. Pirate sound recordings are then "exported with impunity" throughout the entire region as well as the rest of the world.

Greece is also singled as having failed to "make any significant dent" in piracy. Illegally produced films, music CDs and computer programs cost U.S. producers over 166 million dollars in 1997.

The organization recommends that Bulgaria and Greece be elevated to the highest level of USTR concern -- Priority Foreign Country -- and be quickly confronted with possible retaliatory U.S. trade sanctions for failure to act.

On the next highest level of concern -- the Priority Watch List -- the IIPA asked that Russia and Turkey be kept in place and that, for the first time, Estonia be added to the list.

The Baltic country has never been listed by the USTR, but the IITA said it's time Estonia start taking the problem seriously.

The Estonian market is small, it says, but is dominated by piracy in all areas of copyright industries. Pirate products account for 99 percent of all motion pictures produced in Estonia, mostly for markets in Finland, as well as 80 percent of all sound recordings. Estonia's piracy cost U.S. producers over four million dollars.

Estonia is not yet a member of any international conventions governing sound recordings and has no government agency charged with enforcement of intellectual property rights, says the IIPA. Efforts to stimulate police activity against piracy "continue to flounder," it says.

Russia, which has been on the U.S. list since 1995, is called by the IIPA "one of the world's worst pirate markets." It said that piracy rates declined marginally in 1997, especially in the Moscow region. Even then, it says, Russian piracy cost U.S. producers over 922 million dollars in 1997, mostly through failure of enforcement.

The association estimates that 95 percent of all computer programs produced in Russia last year were illegitimate, as were 85 percent of films. The USTR moved Russia up to the priority watch list last April.

Turkey has "not made progress" toward reducing piracy this past year, says the IIPA, although actual losses to U.S. producers declined by 14 percent of over $232 million. Business computer software piracy has been reduced in Turkey, the association says, but in the absence of dramatically higher fines or jail sentences, the pirates can easily cover the penalties with a single days selling.

On the next lower level of USTR concern -- the Watch List -- the IIPA recommends that the Czech Republic, Hungary and Romania be moved up one step to this level and Ukraine and Poland be kept there.

Piracy production levels are a much lower percentage of total product in the Czech Republic, says the IIPA. Czech anti-intellectual property theft laws are "among the toughest" in the region, but enforcement remains "extremely disappointing," it says. Losses to U.S. producers were nearly $117 million, not including entertainment computer programs, a slight decline from 1996.

Hungary, while cutting losses by over 25 percent in 1997, still produces piracy losses of nearly $50 million. Romania, where losses ran to around $39 million, still had a sound recording piracy rate of 90 percent a business computer program piracy rate of 85 percent. The association said the Romania government still needs to get serious about enforcement.

The IIPA urged that Ukraine be kept at the Watch List level because it has never adopted deterrent criminal penalties for copyright infringement. It's problems are similar to all nations in the CIS (Commonwealth of Independent States), says the IIPA, where levels of piracy "are extremely high and enforcement is virtually non-existent." Piracy rates in Ukraine remained at near 99 percent, said the IIPA.

It is concern over the entire CIS that the IIPA says prompted it to recommend the USTR add Belarus and Kazakhstan to its lowest level list of concern, called Special Mention.

The association says it is impossible to determine the exact level of piracy in all of these countries, but estimates losses to U.S. producers from the entire CIS (excluding Russia and Ukraine) at around $50 million for audiovisual piracy and $31 million for software piracy.

Belarus has made "some progress," says the IIPA, but not Kazakhstan.

The USTR says the recommendations of the IIPA are considered among the most important it will consider in deciding on the 1998 U.S. trade list of countries with intellectual property rights violation problems.