Music piracy: a worldwide issue, different means but same results

Enforcement in Peru

A special police unit was created in May 1997 to fight piracy and other economic crimes, and this unit was trained in Intellectual Property Rights (IPR) enforcement issues.^89(*) However, the police unit trained in IPR is ineffective in handling street piracy. The IPR industries agree that there is a need to create a special IPR unit in the police in order to conduct effective anti-piracy investigations.^90(*)

In early 1999, a huge CD plant commenced operations in Lima. After investigations were conducted by the recording industry, a judge agreed to issue a search warrant to raid this CD plant, suspected of manufacturing pirated CD product of major artists for export to Brazil, Paraguay, Bolivia, Ecuador, and the U.S. At the time of the raid, 125,000 pirate CDs had already left the plant. The success of this raid was the result of industry's patience in waiting for the right time to work this case with a judge, prosecutor and select police officers that were willing to enforce the copyright law. The CD plant had admitted its problems and has committed to implement strict methods to protect copyright. ^91(*)

Regarding the 1999 and 2000 pending criminal cases, the court issued five decisions.^92(*) In all five cases, the court sentenced the pirates to two years in prison that were suspended because of the said article 57 of the Criminal Code.^93(*)

Moreover, in April 2000, any copyright Industry associations in Peru joined with several Peruvian governmental entities in establishing special commission called the Comisión contra la Adulteración, Falsificación y Piratería (CONTRACOPIA)^94(*) Functions of this commission include analyzing the problems of each industry sector, proposing solutions to combat piracy, conducting economic studies on the extent of piracy and counterfeiting and reviewing current legislation.^95(*) Also, CONTRACOPIA has introduced a bill to modify the criminal code to increase penalties imposed for intellectual property crimes; the bill proposes sanctions as high as the ones imposed in the copyright law.^96(*)

In June 2001, the Peruvian National Police, raided el Hueco market and seized more than 1 million CD-Rs, almost 100,00 cassettes, 76,000 jewel boxes, 2 million inlay cards, and over 24,000 pirated music videos.^97(*) These operations are constantly undertaken every week all over the country.

On November 28, 2001, the Public Ministry and INDECOPI created a Special IP Prosecutor's Office, and appointed two special prosecutors. Before that, there was only one IPR prosecutor for the entire country, and this prosecutor was limited in his jurisdiction to the city of Lima.^98(*)

The action of the administrative authority charged with enforcing the copyright law, the INDECOPI Copyright Office (1^st instance) is promising, and for some of the copyright industries, did actually improve with respect to running raids.^99(*) However, troubles continue with the INDECOPI Appellate Tribunal (2^nd instance), which is slow in issuing decisions.^100(*)

Main problems to combat music piracy, effectively, in Peru

a. Delay in judicial system. - Under the criminal procedure code, courts delegate preliminary investigations to prosecutors, but the prosecutor must consult the court at each step in a case. Even though this would appear merely to reflect the traditional inquisitorial role played by judges in Civil Law jurisdictions, and therefore it is unlikely to change merely for the sake of enforcing Copyright Law.

b. Another problem exists at the prosecutorial level. After the police conduct the raids, the system breaks down. The prosecutors pursue few cases through judgment.

c. In Peru and many countries of Latin America, judges have had very little exposure to technology. Many judges, unfamiliar with the development of science, may lack a clear understanding of the economic harm resulting from copyright infringement. Thus, it is a common practice for Peruvian judges to make an undervaluation of the harm caused to the right holder. The Judiciary does not appreciate the complexities of calculating torts, damages and indemnities that are the products of contractual and extra contractual responsibility.^101(*)

d. Peruvian authorities don't make an exhaustive control of their borders. They permit that illegal products to enter the domestic market. The contraband of goods is killing the national industry and in this case, is directly affecting the music industry. Investigations show that every week thousands of blanck tapes and CD-Rs are smuggled into the country through Tacna from Chile (Iquique-Arica) and then are distributed for illegal duplication around the country.^102(*)

e. Additionally, music piracy also has been linked to organized crime and passive tolerance of piracy worsens crime and public safety. Often money paid for pirate CD's will be channeled into the drugs trade, money laundering or other forms of serious organized criminal activity.^103(*) Access to loans is difficult, thus pirates often look to organized crime for funds to start a «business» in return, mafias use pirate businesses for laundering money.

In fact, in late 1999 Latin American authorities tore down an illicit CD- producing factory in Paraguay. Taiwanese nationals employed by a Chinese organized crime syndicate ran the factory, which produced CD's for the Brazilian market.^104(*) The Italian mafia, Russian mobs, and Chinese triads are reportedly behind some of the largest pirating operations in the world.^105(*)

f. Music piracy is often considered a victimless crime because the infractors often come from the working class. Street vendors are people without a formal job. They do not choose to work illegally in the streets without benefits such as medical or pension plans. Street vendors perform this kind of activity because of necessity, as a way of surviving.

At the same time, pirated products are cheaper, so even the low-income families can purchase music. The general concept of a pirate is that of a good person who makes music accessible to people and music is indispensable for Peruvians.

g. There is also a problem of strategy for those who fight piracy. The authorities pursue only street vendors or producers at small scale. However, they do not take on the «big fish», the manufacturers at large scale. Without a rethinking of the strategy of fighting pirates, the war is already lost.

* ⁸⁹ IIPA, supra n. 21.

* ⁹⁰ Id.

* ⁹¹ IIPA, supra n. 51.

* ⁹² IIPA, supra n. 21.

* ⁹³ Id.

* ⁹⁴ Contracopia < http://www.contracopia.org.pe> (accessed Nov 01, 2002). CONTRACOPIA is compound by governmental entities such as the Public Ministry, the Police, INDECOPI, SUNAT (governmental entity in charge of the collection of taxes) and copyright industry associations such as the Peruvian Association of Authors and Composers, the Business Software Alliance, the Pharmacy Industry Association, the Motion Pictures Association, Peruvian Committee of Producers of Phonograms and Videos, etc.

* ⁹⁵ IIPA, supra n. 21.

* ⁹⁶ Id.

* ⁹⁷ Id.

* ⁹⁸ IIPA, supra n. 51.

* ⁹⁹ Id.

* ¹⁰⁰ Id.

* ¹⁰¹ Fortunately, this is beginning to change. With the new globalized era technology is being available in Peru and, in that manner, judges have a better understanding of the damages caused to copyright holders. Also, judges are better paid now making attractive the judicial career. Very capable lawyers, who were working in the private sector, are entering into the Judicature improving the quality of the service of Justice.

* ¹⁰² IIPA, supra n. 21.

* ¹⁰³ IFPI, supra n. 27.

* ¹⁰⁴ Cara Buckley, One Third Of CDs Around The World Are Copies, Miami Herald, October 3,2000, available in Lexis.

* ¹⁰⁵ Id.