Recording industry wants to shame Costa Rica

Police confiscated these discs, but sales of pirated audio and movie discs continue. Photo: A.M. Costa Rica

A trade organization dedicated to protecting copyrights and other intellectual property has asked U.S. officials to place Costa Rica on a priority watch list, the so-called list of shame.

It would share the list with Argentina, Chile, China, India, Indonesia, the Philippines, Russia, Spain, Thailand, Ukraine, Vietnam, and even Canada.

The organization, the International Intellectual Property Alliance, issued a scathing six-page summary of copyright problems in Costa Rica. Most of the concerns are familiar to those familiar with Costa Rican criminal procedures: limited enforcement, a failed civil court system, hardly any prosecutors and a disinterested judiciary.

The alliance is made up of seven trade associations and made its report to the U.S. Trade Representative, which will have the final say.

Canada is on the list not because it is a hotbed of intellectual piracy but because it has laws the alliance said are substandard.

The alliance has a special concern for Costa Rica. That concern is a bill now in the legislature that would exempt Tico broadcasters from paying royalties when they play copyrighted music.

The alliance asked that a special intellectual property prosecutor be appointed, that penalties be stiffened and that government agencies cease pirating copyrighted software.

Said the alliance:

“The music industry reports that piracy of sound recordings and music continues to be rampant in Costa Rica, particularly in the form of optical disc (OD) piracy. The level of OD piracy is approximately 60 percent, which represents over 1 million illegal units sold every year in this relatively small market. Much of this OD piracy involves local CD-R burning. The downtown San José area, in particular, is the site of uncontrolled distribution and sale of burned CDs on the streets and in flea markets. Several groups are involved in the importation of blank media and equipment, but the local recording industry has not been able to develop a case yet. Local experts estimate that approximately 20 million units of CD-Rs and DVD-Rs enter Costa Rica annually.”

The alliance also said that the percentage of pirated software in Costa Rica is an estimated 59 percent, still among the lowest in Latin America. A software trade group estimates that the commercial value of pirated U.S. software in Costa Rica was $20 million in 2010, the alliance said.

The alliance also expressed concern about Costa Ricans downloading pirated materials via the Internet. It said Costa Rica needs to take action in the near term to get ahead of growing online piracy, particularly because the country has obligations under the Central American Free Trade Treaty.

Costa Rican representatives of recording distributors have been fighting the proposal for Costa Rica to pass two exceptions to the Treaty of Rome on copyrights. “Those reservations effectively exempt broadcasters from performance rights payments to recording artists and record companies,” said the alliance. It also noted that the Laura Chinchilla government published a decree in May 2010, almost as soon as she took office, incorporating these reservations into Costa Rican law “despite the president’s statements earlier  that year that she intended to reverse the reservations.” Passing the law would strengthen the decree.

“The music industry’s business model is transitioning from sale of hard goods to the licensing of transmissions, and removing existing rights to be remunerated for the transmission of music could not be more poorly timed, the alliance said, adding that Ms. Chinchilla has maintained the same poor level of cooperation with industry as that characterized the previous government of Óscar Arias Sánchez

“The Costa Rican government should make every effort to ensure that performers and producers are being remunerated for the commercial exploitation of their music, and the United States should strenuously object to the introduction of practices that discriminate against U.S. interests,” said the alliance.

The organization noted that Costa Rica faces a July deadline to comply with certain requirements of the free trade treaty.

The alliance said its member organizations “have encountered numerous copyright enforcement deficiencies in the Costa Rican legal and enforcement system. The main problem for copyright industries is at the prosecutorial level. Prosecutors maintain a poor level of cooperation due to the policy adopted by the attorney general not to pursue copyright piracy.”

It added:

“Beyond the major problem at the prosecutorial level, enforcement authorities lack equipment (hardware and software) to investigate Internet piracy cases. The Costa Rican judicial system is very weak, and courts, both criminal and civil, lack the expertise and experience necessary to enforce the copyright and criminal laws. Training programs are necessary for prosecutors, judges and the police authorities. Police cooperation is positive but need more resources: Some municipalities with their own police forces have raided and confiscated hundreds and sometimes thousands of music and video CDs from street vendors, in response to pressure from local businesses. These efforts, however, do not go so far as to investigate the supply chain of the pirated and counterfeit merchandise or to initiate prosecution.”

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