Russia has begun the daunting task of cracking down on its massive ‘gray market’ for intellectual property. But for now, the software is bootleg and . . . : Piracy Rules the CDs

Every weekend, Moscow’s piracy fairs pack them in.

On rickety tables in brightly striped tents, hundreds of the city’s busiest retail entrepreneurs hawk illegally copied computer programs, videocassettes and compact discs in open-air markets that offer no apologies and make no pretense of subterfuge.

Muscovites young and old, pierced and bearded, come to buy copies of Microsoft’s Windows 95 for $6, or the hit game Duke Nukem for $3. “Independence Day” was selling last month for the price of a theater ticket in Los Angeles, several days before it appeared on American screens.

In Filevsky Park on a recent Saturday, Sergei Onishchenko, 31, approached his purchase of Doom 3 with a widely held logic that’s hard to beat: “Why should I pay $50 for a legal copy when I can get it here for 10 times less?”

Until recently, law enforcement authorities seemed loath to disagree. Aside from confiscating a few truckloads of videocassettes at the Gorbonovo market last summer, police haven’t visited Moscow’s digital “gray markets” any time in recent memory.

A crackdown-on-crime decree by Moscow Mayor Yuri M. Luzhkov, a new federal law and pressure from foreign firms and governments may soon put a damper on the merry $1.3-billion pirate trade here. But skeptics say combating Russia’s ingrained piracy habits won’t be easy.

Last month, Moscow police for the first time raided two local computer firms allegedly selling pirated software. But the raids have so far led to no arrests, and no criminal or civil charges have been filed.

Violating intellectual property rights is technically illegal in Russia, but the punishment--two years of “corrective labor” or a $50 fine--doesn’t exactly strike fear in the hearts of software shoppers. Next year, however, the penalties climb to a $12,000 fine and up to five years in jail.

“Computer piracy is a relatively new phenomenon in Russia,” says Alexander Kochubei, spokesman for Moscow’s Internal Affairs Department, which conducted the July raids. “This illegal activity is going on in a mass of areas all over the city. It’s impossible to keep up with everything, but we’re working on it.”

Nearly all of the videos sold in Russia are pirated. The U.S. recording industry says piracy cost it $240 million in 1995.

And with 94% of the software installed on Russian computers estimated to be illegal, industry advocates say the nation’s disregard for copyright protection is particularly troubling because of the anticipated rapid growth of computer use here.

“Who can compete against free products?” demands Anna Goldin, an attorney at Latham & Watkins, which represents the Washington-based Business Software Alliance trade group in Moscow. “It’s holding back foreign investors and it’s holding back Russian businesses.”

Encouraged by the pending change in legislation, the BSA this summer announced a new offensive against Russian pirates. But Sergei G. Antimonov, general director of Dialog-Nauka, one of Russia’s largest anti-virus software firms, says years of experience indicate to him that the fight will be tough going.

“The psychological barrier according to which most things in sight are equally shared by many people is extremely difficult to eradicate,” Antimonov says. “It is very hard for us to drive it home to a Russian user why one single floppy should not first be shared among your 20 computers and then handed over to your neighbor.”

Moreover, defiant consumers of pirated computer programs complain, most Western firms don’t provide technical support in Russia. Poor Internet access makes it hard to get demonstration versions of software available for free elsewhere.

“This is the future of our computer industry!” shouts Aleksandr Ostroumov, dodging out of the crush of the Filevsky Park crowd as the new Joan Osborne CD ($3) blares in the background.

A professor of applied mathematics at Moscow State University, Ostroumov purchased a CD-ROM tutorial on an advanced programming language for $5 (U.S. retail price: $400). “We have no money,” he says. “This is the only way to study it, this is the only way to learn.”

Amy Harmon, who covers technology for The Times, recently returned from an assignment in Russia. She can be reached via e-mail at amy.harmon@latimes.com