[Random-bits] AP on HP to pay antipiracy fee for CD burners

[James Love]

This is more evidence of the problems in the proposed Hague Convention
of Jurisdiction and Foreign Judgments, that would create a global
framework for cross-border collections of judgements for IPR suits (and
other commerical law).  Jamie

http://www.usatoday.com/life/cyber/tech/review/crh737.htm

1/24/00- Updated 01:40 PM ET



HP to pay antipiracy fee for CD burners

FRANKFURT, Germany (AP) — Computer giant Hewlett-Packard has become the
first company to be snagged by a German law requiring firms to pay fees
for making CD burners that are being used to illegally lift the latest
hits off the World Wide Web.

The case sets the stage for other European countries to possibly adopt
similar rules to stem an epidemic that cost the music industry an
estimated $5 billion last year. But analysts blasted the agreement
reached Thursday as another example of Germany's notorious thatch of
regulations.

''The manufacturers are scapegoats,'' said Robert Labatt, a new media
analyst at research group Gartner. ''It's the individual works of art,
books, songs, videos, that need to be protected.''

Many of Germany's neighbors, including France, Italy and Greece, have
similar laws meant to protect authors and musicians by nailing makers of
equipment used to violate copyright laws. But the laws date back decades
and focus on devices like tape recorders and video players.

The German case against Hewlett-Packard extends Germany's pre-existing
law into the digital age, when such things as CD burners, computer
printers, hard drives and high-speed modems make it easier to copy and
transfer copyrighted items.

According to the International Federation of the Phonographic Industry,
about 500 million CDs are pirated annually by people creating their own
CDs from downloaded tunes off the Internet. More than 25 million pirated
music files are available online, the group estimates.

All told, that racked up $1 billion for Europe's $10 billion music
industry last year, and cost EU governments around $72 million in lost
tax revenues, the group says.

Several lawsuits have been filed around the world, including an ongoing
lawsuit a number of record companies have brought against Napster, which
provides software that allows users to easily swap music files.

GEMA, German's main licensing group, targeted Hewlett-Packard as a test
case in May, reasoning that the company leads the German market leader
in CD burners. But Hewlett-Packard dug in its heels when it was ordered
to pay 30 marks ($12.90) for each CD burner sold in Germany since
February 1998.

The legal battle continued until Thursday, when an agreement was reached
to have Hewlett-Packard pay 3.60 marks ($1.54) for each unit sold during
that period while agreeing to pay 12 marks ($5.16) for each one sold in
the future.

Hewlett-Packard spokeswoman Jeannette Weisschuh refused to say how much
that would set the company back. But she criticized the settlement for
putting Hewlett-Packard at a disadvantage against foreign online
retailers who, unburdened by such fees, can sell cheaper CD burners.

''This was a trial to set an example for the whole market,'' said
Weisschuh. ''It's unfair to the consumers who have to pay more and
unfair to the manufacturers because it gives us a competitive
disadvantage.''

Other companies selling CD burners in Germany will also be subject to
the fees, which could vary depending on what kind of agreement they
reach with GEMA. The Hewlett-Packard settlement is expected to set a
benchmark, however.

Currently, equipment manufacturers pay 2.50 marks ($1.07) for each
cassette recorder and 18 marks ($7.74) for each video recorder sold in
Germany. The fees, which are not collected by the government, are
distributed by GEMA to copyright owners through recording houses and
music distributors.