IIPA 2018 special 301 report on Russia

The copyright industries have three intellectual property rights (IPR) priorities in Russia, which if properly addressed, could significantly improve the Russian marketplace for copyrighted works and recordings.

First and most important for all of the copyright industries is to dramatically improve enforcement against online piracy—for hosting sites and streaming services, including, in particular, those directed to users outside of Russia. Second, Russia needs to address the collective administration problems that have long thwarted the ability of music rights holders to effectively control the licensing of their recordings via the collecting societies in Russia. The state accredited Russian collecting societies are not operating with transparency or good governance consistent with international norms.

Third, the problem of camcording motion pictures has risen dramatically over the past three years (200% since 2015) with many feature films being illegally copied in theaters and migrating online. Addressing the camcording problem requires changes in the Russian legal framework, and dedicating sufficient resources and government willpower to engage in effective enforcement.

In 2017, legal reforms were enacted to further improve civil enforcement in Russia against online piracy. These reforms are consistent with improvements in 2013 and 2014 which established procedures and streamlined processes for websites to comply with takedown notices from rights holders. In recent years, Russian courts (in particular, the Moscow City Court), working in cooperation with a key government ministry, have also disabled access to infringing sites for users within Russia.

The 2017 legal reforms allow these court orders to be applied (without a reapplication to a court) to clone, proxy and mirror websites containing infringing content. The 2017 legal reforms also require online search services to delete search results to blocked websites. These latest reforms should improve digital civil law enforcement. Unfortunately, in recent years, the new procedures and processes have been directed only at online piracy by users within Russia. This has resulted in a substantial and persistent international copyright piracy problem. One key missing legal reform that could be effective against online infringing websites and services would be a clarification of the legal liability of Internet Service Providers (ISPs).

Several sectors of the copyright industries and the U.S. Government report that overall IPR criminal enforcement in Russia has continued to decline in recent years, and that the focus on enforcement remains too skewed to physical piracy, not online piracy. For the past several years, however, the Government of Russia has stopped providing annual reports or enforcement statistics, so it is difficult to accurately gauge enforcement activity as a whole. The copyright industries can definitively report that in the absence of a clear nationwide governmental directive on enforcement, criminal and administrative enforcement practices have varied, and will continue to vary, considerably from region to region within Russia.

IIPA recommends the following priority enforcement actions and legal reforms to the Government of Russia for 2018:

  • Increase the number and effectiveness of criminal IPR cases focused against digital piracy, including a focus on deterrent criminal actions against organized criminal syndicates. Also, criminal actions should target those involved in piracy retail chains that continue to sell pirated entertainment software, music and movies.
  • Increase the number of administrative actions (in addition to the criminal actions, per above) against Internet piracy—including streaming services, pay-per-download websites, video game hacking or cheating sites, cyberlockers, BitTorrent sites, private servers bypassing official video game servers, and other commercial and non-commercial enterprises that provide services with the clear intent to promote or induce infringement, regardless of whether the servers (or users) are located in Russia.
  • Implement regulations on the operation of collecting societies that confirm that rights holders have the legal and practical ability to determine how to exercise their rights, including whether to choose to entrust licensing to any collective, and if so, to choose that entity and to delineate the rights for such collections.
  • Amend the Civil Code, Part IV, to:
    • clarify the basis for liability for providers of online services that induce or encourage the infringement of copyright and related rights, or that facilitate infringement and do not take reasonable steps to prevent such activities, as well as clarifying the definition of the activities that qualify intermediaries to benefit from safe harbors, to prevent knowing facilitators from enjoying these safe harbor benefits; and
    • provide additional legal norms that create incentives for ISPs to cooperate with rights holders in fighting infringement taking place over their networks. Article 1253 of the Civil Code provides that intermediary services facilitating the widespread dissemination of unauthorized content cannot benefit from the liability privileges, if they know or should have known of an infringement (so, Article 1253.1 provides only very general principles of ISP liability).
  • Amend the Civil Code in Article 1229, and the Presidium Decision (2009), to additionally provide civil liability for commercial trafficking of circumvention devices. Current law limits liability to rare instances where the devices are advertised (solely) as circumvention devices.
  • Amend the Criminal Code to establish criminal liability: (i) for the unauthorized camcording of motion pictures; (ii) against principals in legal entities, including for IPR crimes (the Civil Code limits civil liability to the legal entities, not the principals of those entities); and (iii) for the importation and commercial trafficking in circumvention devices.
  • Amend the Administrative Code by eliminating the for-profit requirement in Article 7.12 (Administrative Offences), and raise administrative penalties to deterrent levels by implementing: (i) higher fixed fines for violations by legal entities and individuals; (ii) fines proportionate to corporate revenues (e.g., as is done for anti-monopoly violations); and/or (iii) one to three year penalties disqualifying managers of legal entities from their managerial responsibilities.

In the past two years, access to illegal music via apps in Russia has grown exponentially, and major sources of these apps (Apple and Google) do not respond quickly (on average two to three weeks), or, in some cases, at all, to takedown notices. Draft legislation that would block mobile apps (as current law does for websites) would significantly improve this particular problem.

To be more effective, IPR enforcement in Russia should be better coordinated, and should focus on ex officio criminal actions targeted at large-scale commercial enterprises, as well as on taking administrative actions and strengthening administrative penalties. The problem has been an inability to adopt a unified formulation by the police and prosecutors on how to apply the thresholds for online crimes. An intensification of criminal investigations and criminal convictions against principals of organized commercial pirate syndicates is sorely needed.

The lengthy criminal investigative process must also be examined and redressed, particularly at the provincial level. As the government continues to rely on its own experts in investigating, examining and prosecuting IPR violations, it should take measures to increase the number of experts and consider the appointment of a specialized unit of investigators and prosecutors, adequately trained and provisioned to effectively address IP crimes.

Other existing hurdles to effective civil and criminal enforcement are: (a) the failure of courts and police to apply statutory presumptions of copyright ownership; (b) overly burdensome evidentiary requirements to prove title; and (c) the lack of criminal liability for corporate enterprises or the principals in such enterprises. To require a “full” chain of title for each recording in every investigation is especially problematic for foreign rights holders with translation, notarization and other costs and delays. Similarly, the procedures for obtaining injunctions tied to notice and takedown (and proposals for further changes), have been criticized as being overly burdensome in requiring “proof” of ownership.