Web’s Film, Music Pirates Sail Free From Copyrights

From the Middle East to the South Pacific, renegade online movie and music services are setting up shop in far-off lands to dodge international copyright rules.

The maneuvering complicates efforts by Hollywood studios, record labels and other copyright holders to clamp down on online piracy, which is eating into profits and threatening the entertainment industry’s way of doing business.

Although the unauthorized movie and music sites don’t match the quality of DVDs and CDs, they offer goods at rock-bottom prices and beat their authorized competitors to the market.

Film88.com, for example, is a video-on-demand service that shows hit movies such as “Ali” and “American Pie 2” over the Internet for $1 apiece--from computers in Iran. The company put its computerized library of 1,500 films there, a representative said in an e-mail, because “Iran does not provide protection to foreign copyright.”

Film88.com’s backers may be the first alleged pirates to seek a safe harbor within the “Axis of Evil”--President Bush’s moniker for Iran and five other so-called rogue states. But plenty of others have launched services offshore since the entertainment industry turned up the heat on Internet pirates.

The list includes several of the most popular online file-sharing sites, which let users copy music, movies and software freely from one another’s computers. The Kazaa file-sharing software--which has been downloaded more than 86 million times--is distributed by a company based in the South Pacific island nation of Vanuatu. Similar networks outside the United States are Grokster, based in Nevis in the West Indies; Blubster in Spain; and IMesh in Israel.

Movie and music companies are suing Kazaa and Grokster for copyright infringement, with a preliminary ruling expected this year. The music companies already have succeeded in shutting down file-sharing service Napster Inc., a company in California.

Lawyers for the studios and the labels say they still have plenty of legal weapons to bring to bear against offshore pirates, even if they land in hostile territory. The problem, copyright experts say, is in enforcing court orders and making sure an illegal operation stays down after it is knocked offline.

“It’s one thing if they’re in England or Europe or many parts of Asia,” one copyright attorney said. “But if they’re in Iran or North Korea, forget it. You’re on your own.”

Film88.com makes watching a movie online as simple as clicking on a Web page, although the picture quality is no better than that of a beat-up videotape. The service offers more movies than its authorized competitors, such as Culver City-based Intertainer, and it is months ahead of the studios’ own services.

This year the technologists behind Film88.com launched a nearly identical service, Movie88.com, using computers based in Taiwan. But the Hollywood studios responded quickly, persuading Taiwanese authorities to pull the plug on Movie88.com’s Internet access.

A representative of Film88.com insisted that his company is not a band of pirates. In an unsigned e-mail, he likened his firm to a David fighting an uphill battle with copyright Goliaths.

“Our intention is to pay a percentage of the rental price to copyright owners directly,” the rep- resentative said, adding that Film88.com’s service represents “an additional market for the copyright owners without affecting their conventional income (such as box-office income).”

The company still is calculating what a “fair percentage” would be. But the Motion Picture Assn. isn’t waiting.

“To the extent that the site infringes the copyright of any MPA member company, the MPA intends to take swift and immediate action to stop the illegal activity,” the studios’ international trade group said in a prepared statement.

P.J. McNealy, an analyst with consulting firm GartnerG2, said the unauthorized music and movie services started in the U.S., then moved to Europe and Asia.

“We expect more in the Asia- Pacific [region], and parts like that area of the Middle East” where Film88.com landed, he said.

Nearly 150 countries have signed the Bern Convention for the Protection of Literary and Artistic Works, a treaty governing copyright.

That treaty sets minimum levels of copyright protection and requires countries to provide the legal means to enforce those rights, said Fritz Attaway, executive vice president and Washington general counsel for the Motion Picture Assn. of America.

The treaty doesn’t spell out the enforcement measures, “so there’s great variances in the ease with which remedies can be exercised,” Attaway said. The World Trade Organization provides trade remedies against countries that fail to enforce copyrights, but the WTO doesn’t reach as many countries as the Bern Convention.

In the U.S., the Digital Millennium Copyright Act requires Internet service providers to respond quickly when their networks are used to transmit pirated works. When the Internet company is overseas, copyright owners have to ask U.S. service providers to block traffic coming from those Internet addresses--a much trickier task.

“It’s hard because that kind of goes against what the Internet was built to do,” said Bruce Forest, a consultant on piracy and online security. The Internet regards attempts to block traffic as a broken link in the communication chain and responds by routing data around the blockage, Forest said.

One bright spot for copyright holders is that pirates need good telecommunications networks. That’s why they tend to situate at least part of their operations in countries that have signed the international copyright treaty.

For example, the company that distributes the Kazaa software is based in Vanuatu, but many of its operations are in Australia. It distributes the software and sells advertising largely through U.S. companies.

So if a U.S. court rules that the company is infringing, copyright holders have enforcement options that don’t rely on the Vanuatu government.