[Ecommerce] download firm escapes lawsuit

[Manon Ress]

It cannot be much fun to represent IFPI in Moscow.

-------- Original Message --------
Subject: INFO: download firm escapes lawsuit
Date: Tue, 8 Mar 2005 16:12:33 -0000
From: Ben Wallis <bwallis@consint.org>

AllofMP3.com escapes criminal lawsuit, for now
http://moskalyuk.com/blog/allofmp3com-escapes-criminal-lawsuit-for-now/475
Technology News Entertainment- Alex

On February 2004 the Computer Crimes division of Moscow City Police
recommended that prosecutors initiate a criminal lawsuit against
AllofMP3.com, a Russian music site selling MP3 downloads by the
megabytes. The investigation was initially launched at the request of
IFPI Moscow. The International Federation of the Phonographic Industry
previously sued a similar Spanish project, with PureTunes.com settling
with the industry for $10 million.

The case of AllofMP3.com was further complicated by compulsory
licensing, adopted by Russian legislature. Compulsory licensing
stipulates that licenses should be issued in non-discriminatory manner
to anyone who wants to get one on reasonable terms. Russian Multimedia
and Network Society was in charge of establishing the reasonable terms,
and according to Russian legislation, anyone could distribute music,
provided they track downloads and pay back some nominal fee. This is
very different from the legislature in the United States, where a music
distributor would have to gain a license before selling any music
online, and furthermore, could be denied such license for whatever reasons.

On March 4th prosecutor's office of Moscow's Southwestern region refused
to charge AllofMP3.com in a criminal lawsuit. What's interesting is that
AllofMP3.com did not win the case due to the compulsory licensing
legislated in Russia. The prosecutor's office affirmed that the Russian
music site was distributing copyrighted music from its site, and in many
cases did not have a proper license to distribute them. Russian criminal
law severely punishes attempts to distribute copyrighted music without
proper licensing procured first. However, Russian law is quite specific
about distribution of material goods, as the law usually applies to CD
and DVD pirating.

Moscow prosecutor's office noted that Russian music site does not
distribute material goods, and since is not subject to prosecution under
the criminal law. AllofMP3.com distributed digital goods via Internet,
of which Russian criminal law says nothing. Moreover, prosecutors
arrived at the conclusion that since no physical copies of the goods are
delivered to the customer, AllofMP3.com can be treated as a service
where site visitors can listen to the music. (The fact that it's more
than possible to burn an MP3 to an audio CD apparently escaped law
enforcement).

AllofMP3.com cannot be charged for piracy, prosecutors ruled, under the
current criminal law. Which does not prevent musicians and labels from
launching civil lawsuits for cases where AllofMP3.com sold copyrighted
music and did not pay back the copyright holders. This is the most
likely development for label lawsuits in the future, but they will be
quite difficult to win if AllofMP3.com can prove it made all the
necessary payments to ROMS. Another way, of couse, would be to change
the current criminal law to introduce DMCA-like clauses that
specifically relate digital distribution and distribution of physical
goods. It's no coincidence that Russian office of IFPI is located in
Moscow's Tverskaya Street, which is also the address for the parliament
of the country.

Update: ZDNet called the IFPI spokesperson in Moscow to receive the
following response:

A spokeswoman for IFPI said Monday that the organization had not heard
an official response from the Moscow prosecutors. "We have received no
confirmation of any decision, and we do not expect it for some time,"
said IFPI spokeswoman Fiona Harley. "However, if it is true that the
prosecutor has not taken the case this would be very disappointing,
considering the blatant and large-scale infringement that continues to
take place."

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--
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

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