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US COPYRIGHT INDUSTRIES RELEASE REPORT EXPOSING COUNTRIES THAT VIOLATE INTELLECTUAL PROPERTY RIGHTS

“Special 301 Report” Shows Western European Countries Among the Worst Offenders in Online Game Piracy

February 17, 2009 - WASHINGTON, D.C. – Online game piracy is rife in Western Europe and underscores the need for better mechanisms to protect and enforce intellectual property rights in the networked digital environment, according to research by the Entertainment Software Association (ESA) for its part in a “Special 301 Report” filed today with the U.S. Trade Representative (USTR).

“Piracy is the single greatest threat to the innovation, artistic commitment and technological advancements enjoyed by millions of consumers worldwide,” said Michael D. Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. “Piracy is a job killer that the world economy cannot afford in these difficult economic times. Countries that skirt obligations to combat piracy need to understand the unacceptable damage they are facilitating —and those countries that invest in protecting intellectual property rights and ensure that piracy is not tolerated at any level should be lauded.”

The “Special 301 Report” — filed officially by the International Intellectual Property Alliance (IIPA), of which the ESA is a member — provides a comprehensive review of the U.S. copyright-based industries’ piracy and market access problems across 48 foreign countries. IIPA recommends that 40 of these countries be named to an appropriate USTR Watch List.

One notable aspect of the report was data that revealed alarmingly high volumes of illegal game downloads across two leading P2P networks, BitTorrent and eDonkey. Studies conducted in December 2008 with respect to member-selected game titles revealed that Western Europe is home to some of the world’s most active countries engaged in online game piracy:

• Users across 223 separate countries, territories and colonies downloaded illegal copies of games. Downloads of the two most popular titles were estimated to have been made across 219 countries, territories and colonies.
• During December 2008, based on a study of only thirteen titles, users downloaded 6,429,279 illegal copies of these titles. The total number of completed downloads made of the two most popular titles during this one-month period was 4,787,441.
• Italy had the heaviest illegal download activity (17%) followed by Spain (15.1%), France (7.9%), Germany (6.9%), and Poland (6.1%).
• Heaviest downloading countries per capita were Israel, Spain, Italy, Portugal and Poland.
• Leading ISPs – During this period, resources provided by

Telecom Italia (Italy) were implicated in 11.6% of completed downloads, followed by

Telefonica de Espana (Spain) (7.8%)

France Telecom (France) (3.9%)

Polish Telecom (Poland) (3.6%)

Deutsche Telecom AG (Germany) (2.6%)

IUnet (Italy) (2.1%)

Neuf Cegetel (France ) (1.6%)

Jazz Telecom S.A. (Spain) (1.57%)

Free SAS (France) (1.56%)

Uni2 (Spain) (1.53%)

The report also revealed high demand for unauthorized copies of console and handheld games, which indicate widespread availability of circumvention devices and game copiers in many leading markets. This underscores the role that governments should play in improving and enforcing laws prohibiting circumvention devices, so that they can maximize the local economic benefits that flow from a growing market for legitimately acquired games. Effective enforcement against circumvention device trafficking would have a significant impact on reducing rampant online piracy, as infringing video game software downloads would not be playable on unmodified consoles.

The IIPA’s submission identifies many forms of commercial piracy, including factory production of optical discs (such as CDs and DVDs), CD-R and DVD-R “burning,” cartridge counterfeiting, Internet downloading and illegal file trading, as well as Internet café piracy as contributors to high piracy in many markets throughout Asia, Eastern Europe, the Middle East, and Central and South America.

Country-by-country analysis is included in the Special 301 report of the IIPA filed with the USTR on Tuesday, February 17, 2009 and is available online at www.iipa.com. The group reports on piracy conditions and evaluates legal reform efforts that have been undertaken to improve copyright protection and enhance enforcement efforts and details in separate chapters the IP legal and enforcement-related deficiencies of more than 40 countries. Under the “Special 301” trade law, the USTR can impose trade sanctions following an investigation and consultation period.

The Entertainment Software Association is the U.S. association dedicated to serving the business and public affairs needs of companies publishing interactive games for video game consoles, handheld devices, personal computers, and the Internet. The ESA offers services to interactive entertainment software publishers including a global anti-piracy program, owning the E3 Expo, business and consumer research, federal and state government relations, First Amendment and intellectual property protection efforts. For more information, please visit www.theESA.com.