(Posted January 2006)
 

NEW TOOLS FOR
FIGHTING OPTICAL DISC PIRACY
By Laura Lee with Bonnie J. K. Richardson

These DVD-Audio discs contain a digital watermark that prevents the owner from making perfect copies of the content. (AP/WWP)

An official from Thailand's Commerce Ministry inspects a pirated DVD from a shelf showing pirated movies during a raid at a shopping mall in Bangkok. (AP/WWP)

In Sofia, Bulgaria, workers prepare pirated movie, music, and software discs for destruction. (AP/WWP)

Digital technology has turned into reality the promise of innovative ways of distributing creative works on a global scale. With digital technology, a film enthusiast anywhere in the world can view movies from India, Mexico, or Egypt, and music lovers can download the unique sounds of Russian, Chinese, or Zairian music at the click of a button.

These same technological advances, however, have also given rise to serious forms of piracy. Every industry that depends on copyright protection, including the movie, music, and software industries, is facing tremendous losses from optical disc piracy. Countries put their economic future in jeopardy when they fail to adequately protect these industries' intellectual property rights (IPR) from both optical disc and traditional forms of piracy. Piracy hinders the development of these industries in many countries and thus discourages potential investors, innovators, and the creation of valuable new jobs.

Optical discs include formats such as digital versatile discs (DVD), DVD-Recordables (DVD-R), compact discs (CD), CD-ROM, compact discs with recording cores of dye instead of metal (CD-R), video compact discs (VCD), and laser discs (LD). Optical discs are inexpensive to manufacture and easy to distribute, two features that make them highly vulnerable to piracy. Unlike traditional piracy involving analog technologies, the quality of a digital pirated disc is as high as the original, and a production facility can churn out a huge volume of illegal discs in a relatively short time. In 2003, the U.S. motion picture industry, working with law enforcement agencies around the world, seized more than 52 million pirated optical discs.

In order to tackle this fast-growing crisis effectively, it is essential to develop and implement innovative tools for controlling piracy at the source of production. One useful way of doing so would be to adopt optical disc regulations along the lines of the "Effective Practices" adopted by government leaders at the APEC (Asia-Pacific Economic Cooperation) conference in October 2003.

The "Effective Practices" are designed to identify and control all facilities that replicate optical discs by requiring that authorities strictly license optical disc producers and manufacturing equipment. A well-enforced licensing scheme will provide legal grounds for the immediate closure of unlicensed facilities. The regulations also require that licensed optical disc producers retain production records and add source identification codes (SID) to each disc produced, measures that will help ensure that licensed facilities are producing only legal optical discs.

The "Effective Practices" also make the cross-border traffic in manufacturing equipment and raw materials used to make optical discs, such as optical-grade polycarbonate, subject to reporting requirements that facilitate the tracking of these materials. Furthermore, the "Practices" endorse a government's authority to conduct surprise inspections and to seize and destroy machinery used to produce pirated materials.

We believe that every country whose optical disc production facilities are producing significant quantities of pirated products should create and enforce this type of specialized regulatory framework for controlling the production of optical discs. Pirate syndicates are constantly migrating optical disc production from jurisdictions with anti-piracy regulatory regimes to countries still lacking sufficient protection. To date, China, Bulgaria, Malaysia, the Philippines, and Taiwan employ optical disc regulatory regimes, and Singapore is in the process of completing a similar system. The U.S. government is also working with the governments of Russia, Pakistan, and Thailand to adopt these vital optical disc regulations.

An increasingly troublesome facet of optical disc piracy is its association with criminal organizations. Organized crime has been quick to realize that piracy, with its potential for high profits and minimal penalties in many countries, is one of the most lucrative and low-risk criminal businesses. Law-enforcement authorities, such as Interpol, have identified counterfeiting of optical discs as a valuable source of funding to criminal syndicates and terrorist groups.

An effective means to sever this tie between criminal syndicates and optical disc piracy is the use of laws designed to combat organized crime. The welfare of the copyright industries depends upon the coordinated efforts of all countries to dedicate the same kinds of legal tools to fighting piracy that they bring to other kinds of organized crime. Among others, these tools may include money laundering statutes, surveillance techniques, and revamped organized crime laws.

Pirates aim to be always one step ahead of current regulatory regimes. In order to stem the tide of piracy in an effective manner, it is imperative that governments remain flexible and develop new legal tools on a continuing basis. It is only with a truly international approach -- one that adopts and enforces tailored optical disc regulations -- that optical disc piracy rates can be significantly diminished on a local and global scale.