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

The state of music piracy in Peru

Peru currently holds the dishonor of being one of the worst pirates in Latin America.^43(*) Latin America itself has been the market where there was a sharp increase in the number of discs decommissioned.^44(*) The recording industry reports that Peru continues to have one of the highest levels of audio piracy in the world ^45(*) - approximately 97% in the national market are pirated CDs.

During 2001, the legitimate market industry in Peru sold only 884,000 units, compared to the 5.6 million units sold in 1987.^46(*) In 2001, the market decreased by 44 percent from 1.6 millions unit sold in 2000.^47(*)

Estimated trade losses due to record piracy in Peru were $ 57 million in 2001.^48(*) Over recent years, many recording companies (at least 10) have closed because they could not compete with the overwhelming levels of piracy.^49(*) In addition, over 350 businesses that sold legitimate recordings have closed because there is, in effect, no market for legitimate recordings.^50(*)

Music piracy in Peru is so out of control that thousands of pirated audiocassettes and illegal music CDs are sold in the neighborhood of Mesa Redonda, the biggest illegal Peruvian pirate market; located in plain downtown one block away from the Police and the Public Ministry's headquarters.^51(*) In Mesa Redonda, one can find a complete CD collection including the Red Hot Chili Peppers, Offspring, Madonna, Placido Domingo, Eminem and Phil Collins. One can also find local artists like Pedro Suarez, Los Morunos or Los Toribianitos.

There are two kinds of pirates in Peru: large CD's plants and smaller scale «producers».^52(*) The first ones concentrate on pirating music by major international artists that they can export.^53(*) The smaller producers are dedicated to capturing the market for domestic artists.^54(*)

Pirate audio product in Peru appears in all formats - cassettes, CDs and now mostly CD-Rs. (recordable CDs) Customs figures indicate that were more than 10 blank CD-Rs legally imported into the country for every CD sold.^55(*)

Legal Regime in Peru

Peru follows the civil law tradition of France and Italy. In keeping with Peru's civil law tradition, case law is not binding. Similar to the United States, the judicial system is divided into lower courts, appellate courts and supreme courts, with some specialized courts in specific areas such as Criminal, Civil and Family Law.^56(*)

Peru's copyright law, embodied in Legislative Decree N° 822, defines the scope of covered scientific, literary, and works or combinations thereof. Peru`s 1996 Copyright law covers a broad range of economic rights in favor of the author/ producer, as well as some of the highest levels of criminal penalties in Latin America.^57(*) This comprehensive legislation raised the level of protection towards the standards of both TRIPS and the Andean Community decision 351.^58(*)

The Legislative Decree N° 822 created the INDECOPI Copyright Office^59(*) (Oficina de Derechos de Autor), which has the power to impose sanctions to the violators of the copyright, but not indemnities for copyright holders.^60(*) In addition, this office administers the National Register of Copyrights where works can be inscribed. This registration is optional for authors; it`s only a means of publicity and a proof of former right.^61(*) Hence, its omission doesn't harm the full enjoyment or exercise of the economic or moral rights of authors.^62(*)

Rights of authors or titleholders of artistic and literary works are protected irrespective of their nationality or their domicile. Copyright is independent and compatible with Trademark and Patent over the same work.^63(*)

Article 5 enumerates the works that deserve protection under this decree such as: choreographic works, works embodied in phonograms, sculptures, paintings, architectural works, maps. Also slogans or phrases if they have characteristics of originality and any other work in the artistic or literary domain that is original and can be divulged or reproduced by any means already known or later developed.

Independent of the author's economic rights, and even after the transfer of those rights, the author has the right to claim to be identified as the author of a work, except where omission is dictated by the manner of the use of the work, and to object to any distortion, mutilation or other modification of his work that would be prejudicial to his reputation.^64(*)

The rights granted to an author in accordance with article 22 of the Legislative Decree N° 822 shall, after his death, be maintained, at least until the expiration of the economic rights, and shall be exercisable even by his heirs. The economic rights of the author last for the life of the author plus seventy years after his death, irrespective of the country of origin of the work. In joint works, the period of protection will be counted from the death of the coauthor.^65(*) Administrative and criminal actions can be filed at the same time.^66(*)

The Peruvian Criminal Code was modified by Legislative Decree N° 822 making punishments for infringements of Copyright Laws more severe. Peruvian legislation is now comparable to legislation such as that of U.S., where felonious infringements for commercial advantage or private financial gain are the reproduction or distribution in a 180- day period of 10 copies (at least) of one or more copyrighted works with a total retail value of $2,500.^67(*) Such felony infringement is punishable by a maximum five-year prison term, or fines of not more than $250,000 ($ 500,000 per organization), or both, for a first offense; for a second or subsequent offense, the maximum prison term is 10 years.^68(*)

Article 217 of the Peruvian Criminal Code establishes for those who modify, reproduce or distribute a copy of a copyrighted work without the authorization of the author or the title holder a penalty of not less than two years nor more than six years in jail, and a fine of 30 to 90 times the average daily income for most infringements.

For the reproduction or distribution of illegal copies of a copyrighted work involving commercial purposes or the fabrication or modification of devices that prevent or restrict to make illegal copies of works of authorship Article 218 specifies that the sanction is not fewer than two years or more than eight years in jail and fine of 60 to 120 average daily income wages.

Article 221 provides the prior seizure of illegal copies and the devices or means employed to commit the crime. In addition, the law allows a judge to order a raid where the crime is being committed, at the Public Ministry's request. In case of a condemnatory sentence, the illegal duplications could be given to the titleholder whose copyright has been violated. This delivery won't have the character of indemnity.

However, these provisions are not actually imposed as a matter of practice by Peruvian judges. In a few cases involving video piracy, defendants have been issued sentences ranging from one to two years in jail.^69(*) Under Article 57 of the Peruvian Criminal Code, sentences of four years or less are suspendable. The results in these cases have been that the courts suspend the defendant's sentence. The only deterrent factor is that the defendant is prohibited from leaving the country (even this deterrent is suspended if the defendant files and appeal).^70(*)

* ⁴³ IFPI, supra n. 27. Piracy worsened across Latin America in the 21st century. Brazil is the biggest Latin pirate market, worth US$ 215 million, while Mexico is just behind. The Paraguayan market, though small, has the highest piracy level in the world at 99%. It is a major transit center for pirates in Latin America.

* ⁴⁴ Id. Piracy in Latin America has never been greater, and legitimate music sales never worse. In terms of unit sales and value, the average decrease in Mexico and Brazil, our biggest markets, was 25 percent last year. In Argentina, the third-largest country, the market has pretty much been wiped out.

* ⁴⁵ Id. Moreover, this report shows us that the top five globe largest markets in terms of domestic piracy levels are: China, Ecuador and Pakistan (90%), Bolivia, Indonesia and Lithuania (85%) Russia (65%), and Mexico (60%). South Asia remains at the «summit» of pirate CD manufacturing; this region provides seven of the top ten disc manufacturing countries.

* ⁴⁶ IIPA, supra n. 21.

* ⁴⁷ Id.

* ⁴⁸ Id.

* ⁴⁹ Id.

* ⁵⁰ Id.

* ⁵¹ IIPA, Request For The Review Of The Intellectual Property Rights Practice Of Peru In 1999 Annual GSPCountry Eligibility Practices Review < http://www.iipa.com/gsp/1999_Jun16_cmts_peru.html> (accessed Sept. 25, 2002). Mesa Redonda is comparable to Ciudad del Este, a pirate's paradise located on Paraguay's border with Argentina and Brazil where the city's streets are crowded with vendors hawking fake sneakers, music, clothing, etc. The Mexican District of Tepito is another good example of the level of lawlessness reached in Latin America.

* ⁵² IIPA, supra n. 21.

* ⁵³ Id.

* ⁵⁴ Id.

* ⁵⁵ Id.

* ⁵⁶Emmanuel Publishing Corporation, Emmanuel Law Outlines, Civil Procedure < http://www.aspenpublishers.com/emanuel.asp?promoID=EMANUELREDIR> (accessed Nov. 27, 2002).

* ⁵⁷ IIPA, supra n 21.

* ⁵⁸ IIPA, supra n. 51. On December 17, 1993 the Andean Community (Peru, Venezuela, Colombia, Ecuador and Colombia) adopted Decision 351, which established a common regime on copyright and neighboring rights. This decision set up rudimentary, enforcement mechanisms, including injunctive relief, seizure and confiscation of unlawful copies and devices, and damages many of which need to be implemented into national legislation.

* ⁵⁹ Instituto Nacional De Defensa De La Competencia & De La Protección De La Propiedad Industrial (Industrial Copyright Office of National Institute for the Defense Competition and the Protection of Intellectual Property) (Indecopi) < http://www.indecopi.gob.pe/> (accessed Sept. 25, 2002).

* ⁶⁰ < http://www.leyes.congreso.gob.pe> (accessed Sept. 29, 2002). Indemnities are reserved to the judiciary. INDECOPI, an administrative entity, can only dictate sanctions: to impose fines, to close the businesses of infractors, to seize pirate's goods. If the right holder wants to obtain compensation, he must go to the judiciary. INDECOPI Copyright Office can proceed ex oficio, not only by petition of a third party.

* ⁶¹ Id., article 170.

* ⁶² Id.

* ⁶³ Id., article 4.

* ⁶⁴ Id., articles 25, 26.

* ⁶⁵ Id., article 52.

* ⁶⁶ Id., article 173.

* ⁶⁷ Julian Millstein, Jeffrey Neuburger & Jeffrey Weingart, Doing Business On The Internet: Forums & Analysis, S 3.02, J. Press (2002).

* ⁶⁸ Id. For felonies infringement for noncommercial purposes is punishable by a maximum three-year prison term or a fine (not more than $250,000 per individual) or both for a first offense; for a second or subsequent offense the maximum prison term is six years.

* ⁶⁹ IIPA, supra n. 51.

* ⁷⁰ IIPA, supra n. 21.