INTERNET PIRACY: RUSSIAN LAW ENFORCEMENT SUCCESSFULLY TAKES

UNCLAS SECTION 01 OF 02 MOSCOW 001869 SENSITIVE SIPDIS STATE FOR EUR/RUS(TUMINARO),EEB/IPE(URBAN) STATE PLEASE PASS TO USTR KALVAREZ, PBURKHEAD USDOC 4231 JBROUGHER USPTO MSMITH DOJ/CCIPS E.O. 12958: N/A TAGS: PGOV ETRD KIPR ECON RS SUBJECT: INTERNET PIRACY: RUSSIAN LAW ENFORCEMENT SUCCESSFULLY TAKES DOWN ILLEGAL WEBSITE REF: MOSCOW 1439 ¶1. (SBU) Summary. Russian law enforcement, in collaboration with local industry, conducted a raid against an Internet piracy release group "Interfilm" and arrested the owners of their bit- torrent site, "Interfilm.ru." The criminal action against this site is not only the first in Russia since the infamous AllofMP3.com case in 2007, but is also the first successful take down of an illegal site that offered films for download. Authorities filed a criminal case against Interfilm operators and are seeking the maximum prison sentence of six years and fines upwards of $16,000 each. Hoping that the raid indicates a new trend in enforcing Internet piracy, local industry is advocating for greater international cooperation and IPR training, and pushing for changes in legislation which would force Internet Service Providers to prevent illegal file-sharing. End Summary. -------------- Surprise Raid -------------- ¶2. (U) Early in the morning on May 26, Russian federal and local Moscow law enforcement conducted a coordinated raid against the "Interfilm" release group. The group operated Interfilm.ru, an illegal website that utilized bit-torrent technology (a file-sharing application effective for distributing large media files) and offered unlicensed and pre-released movies. Thousands of American and Russian movie titles were available for download. The site targeted not only a Russian audience, but also the Baltics and former Soviet markets as well. In addition, "Interfilm" had agreements with three other illegal release groups for exchanging newly-pirated titles on other Internet sites. ¶3. (SBU) Dozens of law enforcement officials took part in the raid, including officials from the Ministry of Interior's Cyber Crimes Unit (also known as "Department K") and the MVD's Investigative Committee, as well as representatives from the Russian Anti-Piracy Organization (RAPO),which represents the interests of the Motion Picture Association. During the raid, several people were arrested, including the website owners, a man and his wife, who were known only by aliases, "Ripper" and "Nadezhda." According to industry, the couple grossed more than $32,000 in the two years they managed the website. RAPO told us that while it took Russian law enforcement months to plan it, the raid was a surprise. Upon entering the residence, police and RAPO representatives found the computers still on, and seized vital evidence for further examination and analysis. Authorities filed a criminal case against Interfilm operators and are seeking the maximum prison sentence of six years and fines upwards of $16,000 each. -------------- International Connections -------------- ¶4. (U) Internet pirates tend to "spread out" internationally, making enforcement more difficult. Interfilm.ru was no exception. The site was hosted by a Dutch ISP, Leaseweb. Payment to Leaseweb for hosting the site came from Ukraine via the U.S.-based e-commerce website Paypal. Immediately following the raid in Moscow, a Dutch trade association, BREIN, representing the recording industry and movie studios, submitted a "take-down" request to Leaseweb. Leaseweb complied with the request and took down the site. However, the site later re-opened for business in the Netherlands under a new name. ¶5. (SBU) This raid and take-down represents the GOR's first action against any illegal Internet site since the infamous case of AllofMP3.com, an illegal on-line music store that was owned and operated by a Russian company, MediaServices. Site owners utilized a loophole in Russian licensing laws to operate with impunity for seven years. Under pressure from the USG and the copyright industry, access to the site was restricted in 2007. Although AllofMP3.com remains down, in 2007, a Moscow City Court acquitted MediaServices owner Denis Kvasov. Similar to Interfilm, MediaServices quickly re-grouped and opened other illegal sites under different domain names. -------------- Minimum Monetary Thresholds Are Too High -------------- MOSCOW 00001869 002 OF 002 ¶6. (SBU) Illegal on-line film and software stores are easier to prosecute than those selling music because it is easier to meet the minimum monetary threshold necessary to prosecute the case under Russia's Criminal Code. Russia's Cybercrime investigators must provide evidence to the court that the minimum monetary threshold of 250,000 rubles (approx $8000) of damages has been met for the crime to be considered serious under Russia's Criminal Code. To make a case against an illegal music site, police must prove thousands of instances of copyright infringement of songs that sold for pennies for the case to add up to the minimum monetary threshold. Rights holders often argue that the minimum monetary threshold should be lowered. In the case against Interfilm, prosecutors are using Russian Supreme Court Plenum Ruling, "On the Judicial Practice on Hearing Criminal Cases on Copyright, Neighboring Rights, Inventors, Patent Rights Violations, and Illegal Use of Trademark" to make the case. Prosecutors are calculating damages based on input from rights holders and the average retail value of a legitimate DVD (approximately 270 rubles or about $8.50). For pre-released titles, they are using industry's estimated losses based on predicted box-office sales. -------------- Best Practices -------------- ¶7. (SBU) Impressed by RAPO's cooperation with Russian law enforcement to take action against an illegal film website, other industry groups, such as the Business Software Alliance, want to replicate the success by working with law enforcement to take action against illegal software sites. RAPO representatives assert that training programs on prosecuting and investigating IPR cases and conferences that promote international cooperation on IPR are key. Although it's difficult to measure the impact of IPR training programs, the raid on Interfilm occurred just one month after the same MVD Cybercrime investigators who took part in the raid on Interfilm also participated in the recent USPTO training program for law enforcement officials "Northwest Baltic Regional Conference on Criminal Enforcement of IPR in the Digital Environment," April 28-29 in Helsinki, which brought together law enforcement officials from the Baltics, Finland, UK and Russia (reftel). At the conference, several participants noted the timeliness of the topics and said they were sure that the information provided at the conference would be useful to them. Hoping that the raid indicates a new trend in enforcing Internet piracy, local industry continues to push for more international cooperation, training on IPR, and legislation which would force Internet Service Providers to prevent illegal file-sharing. BEYRLE