VZCZCXRO3059
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK
RUEHYG
DE RUEHMO #1869/01 2030336
ZNR UUUUU ZZH
R 220336Z JUL 09
FM AMEMBASSY MOSCOW
TO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/SECSTATE WASHDC 4310
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 001869 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS(TUMINARO), EEB/IPE(URBAN) 
STATE PLEASE PASS TO USTR KALVAREZ, PBURKHEAD 
USDOC 4231 JBROUGHER 
USPTO MSMITH 
DOJ/CCIPS 
 
 
E.O. 12958: N/A 
TAGS: PGOV ETRD KIPR ECON RS
SUBJECT: INTERNET PIRACY: RUSSIAN LAW ENFORCEMENT SUCCESSFULLY TAKES 
DOWN ILLEGAL WEBSITE 
 
REF: MOSCOW 1439 
 
 
¶1. (SBU) Summary.  Russian law enforcement, in collaboration with 
local industry, conducted a raid against an Internet piracy release 
group "Interfilm" and arrested the owners of their bit- torrent 
site, "Interfilm.ru." The criminal action against this site is not 
only the first in Russia since the infamous AllofMP3.com case in 
2007, but is also the first successful take down of an illegal site 
that offered films for download.  Authorities filed a criminal case 
against Interfilm operators and are seeking the maximum prison 
sentence of six years and fines upwards of $16,000 each.  Hoping 
that the raid indicates a new trend in enforcing Internet piracy, 
local industry is advocating for greater international cooperation 
and IPR training, and pushing for changes in legislation which would 
force Internet Service Providers to prevent illegal file-sharing. 
End Summary. 
 
---------- 
Surprise Raid 
---------- 
 
¶2. (U) Early in the morning on May 26, Russian federal and local 
Moscow law enforcement conducted a coordinated raid against the 
"Interfilm" release group. The group operated Interfilm.ru, an 
illegal website that utilized bit-torrent technology (a file-sharing 
application effective for distributing large media files) and 
offered unlicensed and pre-released movies. Thousands of American 
and Russian movie titles were available for download.  The site 
targeted not only a Russian audience, but also the Baltics and 
former Soviet markets as well. In addition, "Interfilm" had 
agreements with three other illegal release groups for exchanging 
newly-pirated titles on other Internet sites. 
 
¶3. (SBU) Dozens of law enforcement officials took part in the raid, 
including officials from the Ministry of Interior's Cyber Crimes 
Unit (also known as "Department K") and the MVD's Investigative 
Committee, as well as representatives from the Russian Anti-Piracy 
Organization (RAPO), which represents the interests of the Motion 
Picture Association. During the raid, several people were arrested, 
including the website owners, a man and his wife, who were known 
only by aliases, "Ripper" and "Nadezhda." According to industry, the 
couple grossed more than $32,000 in the two years they managed the 
website. RAPO told us that while it took Russian law enforcement 
months to plan it, the raid was a surprise.  Upon entering the 
residence, police and RAPO representatives found the computers still 
on, and seized vital evidence for further examination and analysis. 
Authorities filed a criminal case against Interfilm operators and 
are seeking the maximum prison sentence of six years and fines 
upwards of $16,000 each. 
 
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International Connections 
---------- 
 
¶4. (U) Internet pirates tend to "spread out" internationally, making 
enforcement more difficult. Interfilm.ru was no exception.  The site 
was hosted by a Dutch ISP, Leaseweb. Payment to Leaseweb for hosting 
the site came from Ukraine via the U.S.-based e-commerce website 
Paypal. Immediately following the raid in Moscow, a Dutch trade 
association, BREIN, representing the recording industry and movie 
studios, submitted a "take-down" request to Leaseweb. Leaseweb 
complied with the request and took down the site. However, the site 
later re-opened for business in the Netherlands under a new name. 
 
¶5. (SBU) This raid and take-down represents the GOR's first action 
against any illegal Internet site since the infamous case of 
AllofMP3.com, an illegal on-line music store that was owned and 
operated by a Russian company, MediaServices. Site owners utilized a 
loophole in Russian licensing laws to operate with impunity for 
seven years.  Under pressure from the USG and the copyright 
industry, access to the site was restricted in 2007.  Although 
AllofMP3.com remains down, in 2007, a Moscow City Court acquitted 
MediaServices owner Denis Kvasov. Similar to Interfilm, 
MediaServices quickly re-grouped and opened other illegal sites 
under different domain names. 
 
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Minimum Monetary Thresholds Are Too High 
--------- 
 
MOSCOW 00001869  002 OF 002 
 
 
 
¶6. (SBU) Illegal on-line film and software stores are easier to 
prosecute than those selling music because it is easier to meet the 
minimum monetary threshold necessary to prosecute the case under 
Russia's Criminal Code.  Russia's Cybercrime investigators must 
provide evidence to the court that the minimum monetary threshold of 
250,000 rubles (approx $8000) of damages has been met for the crime 
to be considered serious under Russia's Criminal Code.  To make a 
case against an illegal music site, police must prove thousands of 
instances of copyright infringement of songs that sold for pennies 
for the case to add up to the minimum monetary threshold. Rights 
holders often argue that the minimum monetary threshold should be 
lowered.  In the case against Interfilm, prosecutors are using 
Russian Supreme Court Plenum Ruling, "On the Judicial Practice on 
Hearing Criminal Cases on Copyright, Neighboring Rights, Inventors, 
Patent Rights Violations, and Illegal Use of Trademark" to make the 
case.  Prosecutors are calculating damages based on input from 
rights holders and the average retail value of a legitimate DVD 
(approximately 270 rubles or about $8.50). For pre-released titles, 
they are using industry's estimated losses based on predicted 
box-office sales. 
 
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Best Practices 
---------- 
 
¶7. (SBU) Impressed by RAPO's cooperation with Russian law 
enforcement to take action against an illegal film website, other 
industry groups, such as the Business Software Alliance, want to 
replicate the success by working with law enforcement to take action 
against illegal software sites.  RAPO representatives assert that 
training programs on prosecuting and investigating IPR cases and 
conferences that promote international cooperation on IPR are key. 
Although it's difficult to measure the impact of IPR training 
programs, the raid on Interfilm occurred just one month after the 
same MVD Cybercrime investigators who took part in the raid on 
Interfilm also participated in the recent USPTO training program for 
law enforcement officials "Northwest Baltic Regional Conference on 
Criminal Enforcement of IPR in the Digital Environment," April 28-29 
in Helsinki, which brought together law enforcement officials from 
the Baltics, Finland, UK and Russia (reftel). At the conference, 
several participants noted the timeliness of the topics and said 
they were sure that the information provided at the conference would 
be useful to them.  Hoping that the raid indicates a new trend in 
enforcing Internet piracy, local industry continues to push for more 
international cooperation, training on IPR, and legislation which 
would force Internet Service Providers to prevent illegal 
file-sharing. 
 
 
BEYRLE