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U.S. Trade Representative Highlights World's Most Notorious Piracy Markets

February 28, 2011
Baidu, vKontakte, The Pirate Bay, isoHunt and allofmp3.com clones among top offenders

WASHINGTON – The Office of the U.S. Trade Representative (USTR) today issued its report on “Notorious Markets” -- locations, physical or online, in which copyright theft is open, pervasive and undermines the respect for the rule of law.  In addition to physical markets from Argentina to Ukraine that operate in blatant disregard of the law, Internet sites such as Baidu of China, vKontake of Russia, allofmp3.com clones in Russia and Ukraine, Canada’s isoHunt and Sweden’s The Pirate Bay are all featured prominently in the report.
 
Below is a comment from Neil Turkewitz, Executive Vice President, International, for the Recording Industry Association of America (RIAA). 


“We welcome this report which shines a critical light on international businesses that are destinations for open, notorious and rampant copyright theft.  Whether online or in the physical space, these are firms who either directly profit from the sale or other distribution of illegal materials, or who profit from facilitating such theft -- in many cases through the sale of advertising.

“Some of the sites identified in this report, such as The Pirate Bay or isoHunt, wear this badge with honor.  Others like Baidu or vKontakte purport to be legitimate but in fact operate network services that include features that intentionally induce the theft of copyrighted music.  These services’ business strategy is to deliberately gain market share by providing access to illicit content -- launching music services without any form of licensing.  Or it’s to operate like clones of the shuttered allofmp3.com -- such as mp3fiesta.com – in countries like Ukraine and Russia, hosting and selling music, duping consumers into believing that they might be legitimate by various references to licenses that they do not possess.

“In a development related to this report, we commend the recent announcement that the government of Ukraine has adopted an action plan under which it has committed to addressing a variety of Internet piracy issues including action against mp3fiesta.com -- identified as ‘one of the 6 largest pirate sites in the world’-- and ensuring ‘that rogue collecting societies cannot continue their illegal practices.’  We hope that the government of Ukraine will quickly redeem these commitments, and we thank USTR for its efforts in promoting the adoption of this plan.

“RIAA members are excited about the potential of the Internet and other communication technologies to provide an efficient way to distribute music to fans.  Regrettably, this potential remains largely unrealized -- mired in a morass of digital theft. At present, the overwhelming majority of music downloads are illegal.

“Governments can effectively promote innovation and competition in both the communications and intellectual property sectors by enhancing responsibility and accountability in the online space, and we hope that this report will help to enhance this accountability. There must not be safe havens for services that encourage and profit from copyright theft.  For new legal online services to succeed, we must ensure that such services do not face unfair competition from unauthorized sources.”

BACKGROUND:

Baidu: China

Baidu is the Chinese leader in providing search services in China, but by its own admission, owes much of its popularity to a dedicated music service in which it assembles deep links to illegal materials.  Few if any of the links provided by Baidu connect the user to legitimate versions of copyright-protected materials.  It is undoubtedly one of the largest distributors of infringing music in the world.   According to the firm’s own SEC disclosures, it highlight the material risk to the company if it is ever held to the same standards related to inducement as those articulated by the U.S. Supreme Court in MGM v. Grokster.  On January 22, 2010, the Beijing No. 1 Intermediate Court decided that Baidu was not liable for copyright infringement. The appeal was heard in October 2010, and the decision is pending.

vKontakte: Russia

vKontakte is the most popular online social network in Russia, though it is available to a wider international audience in many languages including English.  It currently ranks in the top 40 most visited sites in the world according to alexa.com.  The site’s music functionality is specifically designed to enable members to upload music and video files, hundreds of thousands of which contain unlicensed copyright works.  Its dedicated content search engine enables other members to search and instantly stream illegal content, giving vKontakte the edge over other social networks that do not offer free access to unlicensed material.  As more members upload infringing content, more new members are attracted to the site, and yet more illegal copyrighted works are uploaded.  With some 93 million registered members the scale of damage to right holders is significant.  In addition, third party software developers have distributed apps that enable non-vkontakte members to search and download the content available on the site.  The developer of the Mulve app has been subject to criminal action in the UK, but similar apps remain available and appear not to be blocked by vKontakte, which takes no proactive measures to prevent copyright infringement on its service.

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The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

In support of this mission, the RIAA works to protect the intellectual property and First Amendment rights of artists and music labels; conduct consumer, industry and technical research; and monitor and review state and federal laws, regulations and policies. The RIAA® also certifies Gold®, Platinum®, Multi-Platinum™ and Diamond sales awards as well as Los Premios De Oro y Platino™, an award celebrating Latin music sales.

Contact:
Jonathan Lamy
Cara Duckworth
Liz Kennedy
202/775-0101


RIAA Submits Report to USTR Outlining Key Global Copyright Concerns

February 15, 2011
Highlights Spain, Russia, China and Canada for Continuing Lack of IP Protections

WASHINGTON – The Recording Industry Association of America (RIAA), together with associations representing other sectors of the U.S. copyright industry, who collectively constitute the International Intellectual Property Alliance (IIPA), today submitted extensive comments to the Office of the U.S. Trade Representative (USTR) in connection with the “Special 301” provision of U.S. law. Under “Special 301,” USTR is required to identify those countries that deny adequate and effective protection to U.S. intellectual property. A copy of the report is available on IIPA’s website here.

The RIAA issued the following statement by Neil Turkewitz, Executive Vice President, International:

“This year’s submission focuses on the devastating impact of Internet piracy on the music sector, and highlights the need to secure legislative, regulatory and enforcement reforms to address a problem that is undermining creative communities around the globe. There are some music markets that have essentially evaporated in the face of government inaction to stem the tide of online theft, perhaps most notably in Spain where the market has decreased by 55 percent over the past five years, and where no new Spanish artist has been capable of breaking into the top 50 for more than two years. Other markets continue to operate in chaotic conditions, including Russia and China which are home to some of the world’s most notorious pirate sites: vKontakte in Russia and Baidu in China. The Mexican market continues to suffer under the weight of piracy, resulting in a situation where there are 45 percent fewer domestic releases than there were five years ago—manifesting that societies suffer cultural costs as well as economic ones when they fail to respond adequately to the challenges of piracy. And the Canadian Government has inexplicably consumed yet another year without modernizing its copyright regime, leaving a legal structure in place that is not adequate to respond to present challenges.

“It is estimated that there are currently 17 percent fewer professional musicians in the United States than there were 10 years ago. While the Internet may offer unparalleled opportunities for musicians to reach global audiences, there are sadly fewer and fewer opportunities for musicians to earn a living from their craft. Luckily, this is not irreversible or the result of immutable natural laws. We can, and must, create an environment that cherishes creativity, and which provides incentives for investment in the creation of original cultural materials. While there are certainly complicated issues at the margins, the path towards a more accountable online space is straightforward—governments must provide no safe harbors for those who would intentionally profit from the distribution of the creative works of others. There is no place in a responsible cultural ecosystem for companies like Baidu and vKontakte to operate dedicated music services without obtaining licenses from the creators. There is no place for providing services designed to facilitate music theft. And there is certainly no place for allowing enterprises to be built on the back of illegal content, and then to only require them to take down such content when they are notified by the copyright owner. ‘Catch me if you can’ is not a recipe for sustaining American creativity.

“There are encouraging signs of an emerging consciousness on the part of policymakers that the status quo is not working, and that governments need to be actively engaged to ensure greater accountability in the Internet environment. After years of inaction, the Spanish Government appears close to taking an important first step to rein in online lawlessness, and in Italy, measures are under consideration which would likely give that embattled market an important boost. From Europe to Asia to Latin America, governments are coming to understand that the social, economic and cultural costs of piracy are too great for societies to bear, and that action is needed before investment in original cultural materials completely dries up. We hope that governments will move quickly to adopt the reforms and actions outlined in our report, and to thereby fuel a net-based cultural renaissance.”

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The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

In support of this mission, the RIAA works to protect the intellectual property and First Amendment rights of artists and music labels; conduct consumer, industry and technical research; and monitor and review state and federal laws, regulations and policies. The RIAA® also certifies Gold®, Platinum®, Multi-Platinum™ and Diamond sales awards as well as Los Premios De Oro y Platino™, an award celebrating Latin music sales.

Contact:
Jonathan Lamy
Cara Duckworth
Liz Kennedy
202/775-0101