New offensive against illegal CD production in Russia

Record industry files first civil claims against CD plant in Russia

Moscow, December 18, 2003

The international recording industry today began a new offensive against CD plants in Russia producing unauthorised optical discs that are exported all over the world.

IFPI, representing over 1,500 companies globally, has filed seven separate claims for damages totalling US$1,366,600 against a CD plant in Russia, the country with the biggest music pirate market in the world after China. These claims are the first of a series of civil proceedings to be taken against optical disc plants in Russia producing unauthorised CDs.

The Moscow-based manufacturing plant, Russobit-Soft, is alleged to have manufactured counterfeit CDs by artists including Depeche Mode, Destiny's Child, Enrique Iglesias, Macy Gray, Michael Jackson, Radiohead, Whitney Houston and Westlife. This is the same plant that, in August of this year, suffered the suspension of its licence under the CD Plant Licensing Regulations covering audiovisual works and phonograms, although it continues to manufacture discs containing software.

The cases are being brought on behalf of Arista Records Inc, BMG UK & Ireland Limited, EMI Music International Services Limited, Mute Records Limited, LLC Sony Music Entertainment (Russia), Sanctuary Records Group Limited and Warner Music Austria GesmbH.

The plaintiff companies are claiming a combined indemnity of 40 million roubles, or US$1,366,600, as well as a prohibition on future manufacture of the titles alleged to have been illegally manufactured by Russobit and the confiscation of machinery and equipment used to produce them.

IFPI intends to file further civil suits in the next months against other CD plants in the Russian Federation that are responsible for the production of infringing CDs.

Russia is one of the top ten priority markets targeted in the fight against commercial piracy, with the number of CD plants more than doubling in the last three years and production capacity nearly tripling, while legitimate sales growth is much smaller than the growth of pirate sales. The activities of these plants has far-reaching effects; investigations by IFPI's international anti-piracy investigators, aided by forensic analysis, have helped trace exports of Russian pirate CDs to no fewer than 26 countries, making Russia one of the leading exporters of mass produced pirate product.

The piracy problems in Russia are partly due to inadequate legislation and weak enforcement. IFPI has very recently urged the Duma to pass the necessary proposed amendments to the Copyright Act without further delay, and called for law enforcement to take firm and immediate action against other CD plants, based on the information that has been provided to them by IFPI.

The decision to file a civil claim against a CD plant for the first time indicates the record industry's determination to recover compensation from those supplying the pirate music market. This marks a new phase in IFPI's campaign against the manufacture of unauthorised discs in Russia. IFPI has already filed a number of criminal complaints for copyright infringement against Russian CD plants and has been awaiting action on those complaints by the Russian authorities.

Jay Berman, Chairman and CEO of IFPI, said: "Copyright piracy is a critical problem in Russia and this action opens up a new front in our industry's efforts to tackle it. Russia has the potential to become a highly successful music market, but first it is essential to bring its spiralling levels of piracy and copyright infringement under control."

The date of the preliminary hearing has been set for the 5th January 2004.

For further information contact: Adrian Strain or Julie Harari at
IFPI Communications on tel: +44 (0)20 7878 7900 or
Igor Pozhitkov on tel: +7 (503) 956 6057 /58

Notes to Editors:
IFPI is the organisation representing the international recording industry. It has affiliated National Groups in 46 countries and its membership comprises more than 1,500 record companies worldwide.