want to steal your
pirates

ENFORCEMENT
Agencies In The Champ's Camp

content

Enforcement is usually reactive - apprehending counterfeit goods, at trans-shipment points or points of sale, then trying to follow the trail upline. A counterfeit optical disc found at customs or in a retail shop may have a paper trail that is either fictional or deceptive. This contrasts with tracking down operators of illegal internet sites, where the online server permits investigation of the source of wrongdoing.

Quality information is often the lifeblood for many kinds of enforcement. Agencies can encourage and cultivate informers. They serve as a clearinghouse for helpful data such as product packaging identifiers usually present only on genuine merchandise.6 From country to country, the quality of local informants is often the single major factor in enforcement efforts. Other important agency functions include: maintaining hotlines for whistleblowers, assisting local legal systems, and improving the public perception of intellectual property rights.

Pride and kudos are justified for the intense work these public-spirited agencies have accomplished. However their efforts are severely dwarfed by the relative growth of this illegal line of business. Contraband seizures and estimates of loss of trade are meaningful but only skirt the edges of a criminal activity that is raging out of control. When a consumer is actually able to detect a fake, they are more averse to buying it than ever before. It's likely that in the future more counterfeiters will serve jail time. But in illicit optical discs especially, the growth of the piracy trade is expected to increase far faster than the best efforts of enforcement agencies to control it.

Bob Kruger, Director of Enforcement for the BSA, has said:

"To the extent every advance in technology makes it easier for copyright owners to produce their goods at a lower cost, you're lowering the barriers for entry for the people who are looking to make money from the production of illicit goods. It's almost a self-evident principle."

Standard compact disc replicating technology has already seen tremendous progress in economies of scale, and DVD promises to fall in price still faster since the incredibly low cost-per-megabyte is bound to find market appeal. DVD can hold a great deal more than four times what will fit on a standard CD-ROM, and nobody expects it to be more than four times as expensive after the first two years.

So despite the commonly held viewpoint that enforcement is the "best weapon" against piracy, and accepting that a zero tolerance enforcement attitude should be presented to the world at large, the sad truth is that these agencies are caught in a perpetual game of "catch-up" with the bad guys. Tony Adamski, former Director of Worldwide Anti-Piracy for the MPAA (employed by them as a consultant at the time of this interview), admits:

"In the end, the law enforcement card is not going to be the one that wins this battle."

Logic says that if you send out a posse to catch an army, no matter how tough they are, they can only return with the stragglers.

When U.S. criminal enforcement agencies focus on counterfeiting, it is often because their anti-drug efforts have afforded them a window to work on lower-priority crime. The DEA and other agencies (as well as the DOD) have made a much more concerted attack on narcotics than will ever be attempted against non-currency counterfeiting. Perhaps the best hope for anti-counterfeiting enforcement is that it will succeed as well as efforts against drugs. For the commercial interests of title-holders, this means something more has to be done.


QUICK-TAKE

Agency Profiles

The following brief profiles of several agencies are cursory but illustrative of both their effectiveness and lack of effectiveness in curtailing the massive trade in counterfeit goods and optical discs in particular.

(See Reference Section E and Resources & Other Information for additional data.)

U.S. CUSTOMS
One third of all contraband seized in 1995 was wearing apparel from Korea, Hong Kong, China and India; it's total domestic value was no more than $15.5 million. Compact discs accounted for 4% of the total with a domestic value of $2 million. (Ref.Sec. E includes '95 seizure statistics.)
IACC
The International AntiCounterfeiting Coalition represents a wide variety of industries. It's 160 member companies do annual business of $500 billion and account for 10% of U.S. GNP. They emphasize health & safety issues, economic costs, and the role of organized crime syndicates. Incidentally, the organization recommends Bill Levy's fictional thriller Knockoff (1995, Silk Purse Press) as a source of accurate background information.
IIPA
The International Intellectual Property Alliance is an umbrella organization formed in 1984. In addition to the RIAA, SPA, BSA, and MPAA, they are also comprised of the following five trade associations: AAP - Association of American Publishers; AFMA - American Film Marketing Association; IDSA - Interactive Digital Software Association; ITI - Information Technology Industry Council; and the NMPA - National Music Publishers' Association. The IIPA is an extremely good compiler of cross-industry intellectual property information.
RIAA
The Recording Industry Association of America has long been effective, and deserves special mention for its education program targeted at helping legitimate CD factories spot bogus orders coming in the door. 1994 loss-of-trade estimates were $2 billion worldwide with $300 million in the U.S. Considering the relatively low seizure numbers, it is possible that the RIAA is doing a superb job protecting domestic optical media, depending on the quality of its counterfeit detection (more information on this would be desirable). Its main focus is audiocassettes. (Ref.Sec. E includes statistics for '91-'95.)
SPA
The Software Publishers Association has a strong personality of its own. Its prestige as an anti-piracy organization has suffered over the last few years, in part because its statistics seemed questionable (see Ref.Sec. E). Unlike the BSA, the SPA has a wide membership and so is a forum wherein many developers may express themselves and pursue projects. Its copyright protection educational materials are often used and are sometimes innovative.
BSA
As proactive as possible, the Business Software Alliance sets a high standard of anti-counterfeiting professionalism. Its 1994 estimates put worldwide loss of trade for business software at $15.2 billion with $2.8 billion in the U.S. alone. The U.S. piracy rate of 35% is the lowest in the world. The deadline for release of 1995's global piracy statistics was pushed back to April to allow greater time to calculate accurate size-of-market figures for several dozen countries. Domestic fines/recoveries in 1995 have amounted to $5 million, which is put toward the BSA's budget. 1995 hotline calls have exceeded 10,000. There is often resentment against BSA because its membership is restricted to under a dozen "major players" led by Microsoft. It should be remembered that these are the main victims of software piracy; they mean business and have seen to it that the BSA means business. Recent busts against illegal internet sites are notable.
MPAA
As proactive as possible, the Motion Picture Association of America has been the John Wayne in this area. Trade numbers for 1994 were similar to those reported by the RIAA: roughly $2 billion worldwide and $250 million U.S. with a far lower percentage piracy rate domestically. It should be pointed out that motion pictures on optical discs are an emerging area and the MPAA/MPA will be more "up to speed" as the worldwide situation becomes better understood. Traditionally, the most common "complaint" about this organization is that they run a tight ship. (Ref.Sec. E includes statistics for '94-'95.)


written April 1996 -- please send comments to veyr@primenet.com

Zoom TV logo

© ZOOM TELEVISION, INC. 1996, all rights reserved