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RIAA ANTI PIRACY KIT Sound recording piracy and counterfeiting have adversely affected the recording industry since its earliest days, but with the development of tape technology, record piracy has become a major criminal activity. Music pirates account for approximately $300 million in lost record sales annually in the United States. And, because the potential profits record pirates can earn are enormous, an increasing number of people are attracted to it. Unlike a record company, the pirate bears none of the initial cost of searching for talent, creating, producing, marketing and publicizing a recording, which can add up to millions of dollars. Nor does a pirate pay union fees, artists, back-up vocalists and musicians, publishing/songwriter royalties or taxes. The general term "piracy" refers to the illegal duplication and distribution of sound recordings and takes three specific forms: counterfeit, pirate and bootleg. Counterfeit recordings are the unauthorized recording of the prerecorded sounds, as well as the unauthorized duplication of original artwork, label, trademark and packaging of prerecorded music. Counterfeit recordings usually display the following characteristics: Produced by obtaining a legitimate recording and duplicating subsequent counterfeit copies and reproducing artwork. Scale of the reproduction facilities ranges from backroom operations using cheap dual cassette players and rented photocopiers to illegal factories equipped with professional commercial sound reproduction, packaging and printing equipment. Almost always found in cassette format, but occasionally as long playing vinyl albums (particularly of back catalog recordings). Counterfeit CDs and CD-Recordables (CD-Rs) are also beginning to appear. Street prices of counterfeit cassettes generally range from $3 to $5. Counterfeit CDs often retail closer to their legitimate counterpart ($8 to $12). Jackets, labels and insert cards tend to have blurred printing, poorly reproduced colors or photographs. Insert cards are sometimes made of paper rather than heavy card stock and usually do not carry liner notes or lyrics. The sealed folds from shrink-wrapping are often looser or sloppier than the original product. Pirate recordings are the unauthorized duplication of only the sounds of one or more legitimate recordings. Pirate recordings usually display the following characteristics: Produced by procuring legitimate recordings and duplicating them. Format of choice is audio cassette, occasionally vinyl albums and, increasingly, CDs and CD-Rs. Street value is around $10 - $15 for a 90-minute compilation tape, CD and CD-R. Unauthorized compilations (collection of different recordings by one or more artists compiled as a package) of different artists are common on pirate tapes, CDs and CD-Rs. Packaging is inferior, generally uses only one or two colors, minimal artwork and a typewritten or crudely printed list of tape contents. Generic artwork may be used instead of photographs or pictures of the recording group or artist. Unfamiliar or fictitious company names of alleged manufacturers or distributors are often listed or no company names are listed at all. Bootleg recordings are the unauthorized recording of a musical broadcast on radio or television or of a live concert. Bootlegs, also known as underground recordings, usually display the following characteristics: Produced by taping live concerts using a portable cassette or digital recording device, or taping directly by tapping into the venue's sound system or illegally procuring studio outtakes. Still found in long playing vinyl album format, occasionally in cassette format and increasingly in CD and CD-R format. Street value generally ranges from $10 to $15 for cassettes, $25 - $300 ($300 for multi-disc sets) for bootleg CDs and CD-Rs. CD packaging usually incorporates a multi-colored insert of a folded sheet of paper as opposed to a multi-page booklet. Name or trademark of the performer's legitimate record company is usually not included, but names of fictitious manufacturers often are.
The Recording Industry Association of America is a private, not-for-profit corporation whose member companies produce, manufacture and distribute approximately 90 % of all legitimately recorded music in the United States. The RIAA's anti-piracy unit is the frontline of defense in the battle against piracy. Headquartered in Washington, D.C., the anti-piracy staff is headed by Steven D'Onofrio, RIAA executive vice president and director of anti-piracy operations, who oversees a staff of attorneys, Internet specialists, investigators nationwide and additional support staff. In early 1970, the RIAA's anti-piracy staff began working closely with federal agencies in utilizing existing laws for the protection of the rights of creators and producers of sound recordings. Members of AP coordinate their efforts with the FBI, U.S. Customs, U.S. Postal Service and Secret Service, U.S. Attorneys, state and local prosecutors and law enforcement agencies to investigate and assist in prosecuting criminal sound recording violations. That assistance ranges from training and educating law enforcement, supplying expert witnesses and assisting with the preparation of trial briefs. From 1993 through 1997, these efforts resulted in 1,481 arrests and indictments and 799 guilty pleas and convictions of manufacturers and distributors of piratical sound recordings.
CD Plant Education Program
Online Piracy As part of this broader education campaign, the RIAA formed a partnership with ten colleges and universities across the country to address the problem of Music Archive Sites on university and college campuses. The Soundbyting Campaign, which hosts an informational web site that can be found at www.soundbyting.com, educates students about the importance of respecting copyrighted sound recordings in cyberspace. The campaign also includes a student curriculum and educational materials for students, administrators and faulty who are negotiating the complex world of changing computer technology. The materials are designed to give students a basic understanding of copyright and how it applies to music on the Internet. Among its efforts, the RIAA is focussing attention on sites offering unauthorized interactive distributions and performances of copyrighted sound recordings, Internet Radio Sites, Music Archive Sites, bootleg marketplaces and other developing areas of concern. We are also dealing with software companies that enable and facilitate copyright infringements in this area including browser software and streaming audio companies, as well as Online and Internet Service Providers. The RIAA also brings civil actions on behalf of its member companies against record pirates as both a deterrent to repeat offenders and to protect the record companies by helping them recoup some of the millions of dollars they lose to piratical activity. The record companies seek statutory or actual damages, attorneys' fees, impoundment and forfeiture of illicit product and injunctions against further infringement. In November 1997, the No Electronic Theft Act was passed, which criminalizes actions on the Internet even if there is no financial gain, including copyright infringement of sound recordings that previously were not subject to criminal liability.
CD-R Piracy Counterfeit, pirate and bootleg CD-Rs are easy to spot as major record companies generally do not release product in this format: CD-Rs are typically gold on one side with a greenish tint on the non-graphic, or "read-only" side, and counterfeit, pirate and bootleg versions are most often found in general variety stores, for sale by street vendors, at flea markets and on the Internet. Most of the unauthorized CD-Rs confiscated to date had loose shrink wrapping, shoddy graphics, and unlike most legitimate product, did not have top spine labeling and dog bone security stickers.
For many years, the unauthorized duplication of sound recordings, though always a problem for the recording industry, remained relatively stable. However, by 1962 record piracy had increased to the point that Congress enacted a statute making it a crime to transport, with fraudulent intent, records with forged or counterfeit labels. With the development of tape recording, 8-track cartridge and cassettes, as well as high-speed, relatively low-priced duplicating equipment, the piracy problem began to grow at an alarming rate. Congress responded to the crisis by enacting the Sound Recording Amendment Act of 1971. Today, record, tape and CD piracy activities encompass crimes punishable on both the federal and state level. Federal Laws The three primary federal laws used to combat this crime are: 1) U.S. Copyright Law {Title 17 U.S.C. Section 101 et seq., Title 18 U.S.C. , Section 2319 and Section 2319A}: The federal law protects sound recordings first "fixed" as of February 15, 1972. The law protects copyright owners from the unauthorized reproduction or distribution of sound recordings to the public. Section 2319 applies only to those recordings that are "fixed" with authorization on or after February 15, 1972 (that is, when the performance is put into a tangible form such as a tape, record or CD). Those recordings "fixed" prior to February 15, 1972, are protected by criminal law through a state's unauthorized duplication statute. On the civil side, recordings are protected by a state's unfair competition laws. Section 2319A is a federal anti-bootleg statute created in December 1994. Like the pre-existing state statutes, the new federal statute criminalizes the unauthorized manufacture, distribution or trafficking in sound recordings and music videos of "live" musical performances. However, the federal statute also provides for the seizure of bootleg recordings or music videos manufactured outside the United States by U.S. Customs at the point of importation. In effect, bootleg recordings are now subject to seizure and forfeiture in the same manner as other property in violation of customs laws. Criminal sound recording copyright infringements are punishable by up to five years in prison and $250,000 in fines whether or not for commercial gain. Repeat offenders can be imprisoned up to 10 years. Individuals may also be held civilly liable to the copyright owner for actual damages or lost profits or for statutory damages up to $100,000 per infringed copyright. 2) Trafficking in Counterfeit Labels {Title 18 U.S.C., Section 2318}: This statute covers counterfeit labels intended to be affixed to a sound recording. A "counterfeit label" includes any component of the entire package of a prerecorded audio cassette, compact disc or album cover. The definition also extends to a situation where counterfeiters have simulated "genuine" labels that have not previously existed. A person can be convicted under this law for trafficking in a finished product that contains a counterfeit label, as well as a component of that product, such as the insert card for an audio cassette. This statute imposes penalties of up to five years in prison and/or $250,000 in fines. 3) Trademark Counterfeiting {Title 18 U.S.C. Section 2320}: This statute deals with sound recordings that also contain the counterfeit trademark of the legitimate manufacturer or artists. The statute covers the "trafficking" and attempting to traffic goods containing the counterfeit marks. The penalties imposed by this statute for legal entities, such as corporations, range from $1 million to $5 million. Penalties for individuals range from 10 years in prison and/or $2,000,000 in fines for first time offenders, and up to 20 years in prison and/or $5,000,000 in fines for repeat offenders. State Laws Nearly all states have piracy related laws that make it a criminal offense to pirate, counterfeit or bootleg audio recordings. The three most commonly used state laws are: 1) True Name and Address Statute: This statute mandates the actual name and address of the manufacturer of a sound recording be displayed on the packaging. Because pirates, counterfeiters and bootleggers generally do not display their true name and address on illegal product, they are usually in violation of this statute. All sound recordings, regardless of the date of fixation, are covered under this statute. 2) Unauthorized Duplication Statute: Pirate and counterfeit sound recordings "fixed" prior to February 15, 1972 are covered by this statute. 3) Anti-Bootleg Statute: Arenas, promoters and performers are protected against piracy under this statute, making it a crime to manufacture the sounds of a live performance of an artist and to distribute these reproductions. Many of these state statutes carry a maximum penalty of up to five years in prison and a $250,000 fine; other state statutes carry misdemeanor penalties. Strengthening The Law Part of the RIAA's successful state-by-state campaign to pass or amend anti-piracy laws is to require the actual manufacturer's true name and address be displayed on the cover, box, jacket or label of a sound recording. The total number of states/territories where sound recording piracy is now a felony is 36. They are:
The result of the RIAA's continued efforts to press for, and win, upgraded statutes for sound recording piracy at the state level was 150 guilty pleas/criminal convictions of sound recording pirates in 1997. The majority of those convictions are attributable to the application of new felony state statutes that have upgraded state penalties for counterfeiting, pirating and bootlegging activities. Felony statutes generally call for prison terms of up to five years and fines as high as $250,000. WHO GETS HURT BY PIRACY Consumers are the ultimate victims of sound recording piracy. Most illegal recordings are inferior in sound quality, often defective and sometimes are of an artist other than the one represented on the packaging. And as illegal recordings cannot be returned or exchanged, the consumer is stuck with the inferior product. In addition, the financial loss incurred by record companies, as a result of piracy, ultimately drives up the price of legitimate product. Retailers and distributors lose sales to pirates because they can not compete with the low prices charged for cheaply-produced, illegal copies. In some cities, illegal street vendors sell counterfeit cassettes literally on the doorsteps of legitimate retailers. According to legitimate retailers, these street vendors can usurp 35 to 40 percent of their business. Recording artists, producers, composers, publishers of the compositions, musicians and vocalists who helped make the record, as well as musicians' unions, are all cheated by pirates out of their share of royalties. These people in the music community generally depend on royalties for their livelihoods, but more important, their reputations are damaged when consumers unknowingly purchase poor quality copies of their work. Record companies invest a great deal of artistic and technical skill, money and effort to create the master recording from which legitimate commercial copies are made. These companies also expend huge sums to search for, develop and popularize performers. Pirates do not bear the continuing costs of union fees, as well as contractual and statutory royalty payments. In today's marketplace, approximately 85 percent of the records released do not recover production costs. Record companies rely on income from the 15 percent of recordings that are successful to subsidize less profitable types of music (classical, jazz), new performers and composers.
Financial Impact In 1997, the U.S. sound recording industry suffered approximately $300 million in annual losses from domestic record, tape and CD piracy. In 1997, the worldwide estimate of losses to the recording industry was approximately $5 billion. Retailers have indicated that illegal street vendors can cost legitimate retailers upwards of 30 percent of their business. In 1997, more than $9 million in judgements/settlements was awarded in civil suits for many forms of piracy. Seizures 936,190 illicit CDs were seized in 1997, indicating a 38% drop from 1996. However, overall seizures have increased 98% since 1994. 442 unauthorized CD-Rs were confiscated in 1997, 355 were bootleg, the remainder of which were pirate.
Other statistics in 1997 include: Federal/State Statutes Anti-piracy statutes generally carry penalties as high as five-year jail terms and $250,000 fines. In the last few years, state statutes for piracy have been upgraded to felonies in 33 states/territories. 
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