U.S. Hopeful About Russia's Tougher Stance on Software Piracy

MOSCOW -- Bearing special entry passes, economic crimes investigators from Department 28 of the Interior Ministry arrived at a closed military compound in the city of Kazan at 3 a.m. two months ago. The troops guarding the facility scoffed at the documents.

Come back later when a commander will be on duty, the soldiers said. Or just go back to Moscow. But the eight investigators, accompanied by a private detective from Hollywood's Motion Picture Association, refused to back off, according to accounts they gave later.

Their target was an optical disc factory called Laser Style that had rented space in the compound, a complex of buildings surrounded by barbed wire. The police suspected that the factory, licensed by the Culture Ministry, was churning out huge numbers of pirated DVDs at night after it finished its legitimate work.

As the argument continued at the gate, six investigators and the private detective broke away. After climbing a large pipe that carried hot water into the facility, they crossed the wire, dropped down and burst into the Laser Style facility.

Inside, coming off three state-of-the-art DVD presses, were pirated copies of "Finding Nemo" and the film classic "Twelve Chairs." Police found illegal master discs for nearly 400 other movies. The factory was able to produce more than 2 million discs a month, investigators said.

With negotiations over Russia's entry into the World Trade Organization at a critical juncture, Russian officials insist they are finally getting serious about taking on the country's booming industry in pirated films, music and software. Sales of copies on streets and markets across Russia are a prime U.S. trade complaint.

According to the International Intellectual Property Alliance, a trade association based in Washington, the motion picture, music, business and entertainment software industries lost $1.7 billion in Russia last year through domestic sales and the export of pirated materials, which have shown up in 27 countries around the world.

"We have started to combat the problem in a complex, urgent way," said Yuri Samofalov, deputy head of the economic crimes section in the Interior Ministry. "We are going after production, distribution and retail."

Western governments and industry officials praise these efforts but say they are not yet convinced that the era of free-for-all piracy is ending. "I'm very encouraged by the concrete steps the Russian authorities are taking," said U.S. Ambassador William J. Burns at a U.S.-Russia roundtable discussion on intellectual property protection Thursday in Moscow. "I urge Russia to sustain and continue these efforts."

Kim Berger, Microsoft Corp.'s senior attorney for Europe, the Middle East and Africa, had similar words after a recent raid that for the first time exposed a factory pirating her company's software here. "Our hope is that there will be other raids like it in other facilities in Russia," she said.

The raid in Kazan, a city on the Volga River in central Russia, was one of at least 12 on factories producing pirated materials in the last three months. At least six of the raids, including the one that found Microsoft products, took place on closed military grounds, according to the Interior Ministry and industry officials .

The raids coincided with a nationwide crackdown on kiosks, stores and marketplaces where movies still in theaters or not yet available on legal DVDs -- "Wedding Crashers" and "Harry Potter and the Goblet of Fire," for instance -- have been on sale for as little as $3 each.