Overview of the Federal Anti-Bootleg Statute
With President Clinton's signing of the General Agreement on Tariffs and Trade (GATT) in December 1994, a federal anti-bootleg statute was created. Up until then, generally only state statutes had been available to law enforcement and the RIAA's anti-piracy unit to protect artists' recording rights against bootleggers.

Like the pre-existing state statutes, the new federal statute criminalizes the unauthorized manufacture, distribution or trafficking in sound recordings and music videos of "live" musical performances. However, the federal statute also provides for the seizure of bootleg recordings or music videos manufactured outside the United States by U.S. Customs at the point of importation. In effect, bootleg recordings are now subject to seizure and forfeiture in the same manner as other property in violation of customs laws. The maximum penalties for violating the new law are imprisonment up to 10 years and/or a fine of $250,000.

The RIAA's anti-piracy unit coordinates the initial examination of product on behalf of the recording industry. If you wish to report suspected bootleg recordings, call RIAA at 1-800-BAD-BEAT and ask for the Customs Desk or e-mail us at services@grayzone.com.

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What Is Sound Recording Piracy?
Sound recording piracy and counterfeiting have adversely affected the recording industry since its earliest days, but with the development of tape technology, record piracy has become a major criminal activity. Music pirates account for almost $300 million in lost record sales annually in the United States. And, because the potential profits record pirates can earn are enormous, an increasing number of people are attracted to it.

Unlike a record company, the pirate bears none of the initial cost of searching for talent, creating, producing, marketing and publicizing a recording, which can add up to millions of dollars. Nor does a pirate pay union fees, artists, back-up vocalists and musicians, publishing/songwriter royalties or taxes. Beyond the cost of purchasing a single commercial copy for use as a master, the pirate incurs only a per unit manufacturing cost of well under a dollar.

The general term 'piracy" refers to the illegal duplication and distribution of sound recordings and takes three specific forms: counterfeit, pirate and bootleg.

Counterfeit recordings are the unauthorized recording of the prerecorded sounds, as well as the unauthorized duplication of original artwork, label, trademark and packaging of prerecorded music. Counterfeit recordings usually display the following characteristics:

• Produced by obtaining a legitimate recording and duplicating subsequent counterfeit copies and reproducing artwork and packaging. Scale of the reproduction facilities ranges from backroom operations using cheap dual cassette players and rented photocopiers to illegal factories equipped with professional commercial sound reproduction and printing equipment.

• Almost always found in cassette format but occasionally as long playing vinyl albums (particularly of back catalog recordings). Counterfeit CDs are also beginning to appear.

• Street prices of counterfeit cassettes range from $3 to $5 compared to legitimate recordings that generally range from $7 to $10.

• Jackets, labels and insert cards tend to have blurred printing, poorly reproduced colors or photographs. Insert cards are sometimes made of paper rather than heavy card stock and usually do not carry liner notes or lyrics. The sealed folds from shrink-wrapping are often looser or sloppier than the original product.

Pirate recordings are the unauthorized duplication of only the sounds of one or more legitimate recordings. Pirate recordings usually display the following characteristics:

• Produced by procuring legitimate recordings and duplicating them.

• Format of choice is audio cassette, occasionally vinyl albums and, increasingly, CDs.

• Street value is around $10 for a 90-minute compilation tape.

• Unauthorized compilations (collection of different recordings by one or more artists compiled as a package) of different artists are common on pirate tapes.

• Cassette packaging is inferior, generally uses only one color, minimal artwork and a typewritten or crudely printed list of tape contents. Generic artwork may be used instead of photographs or pictures of the recording group or artist.

• Unfamiliar or fictitious company names of alleged manufacturers or distributors are often listed or no company names are listed at all.

Bootleg recordings are the unauthorized recording of a musical broadcast on radio or television or of a live concert. Bootlegs, also known as underground recordings, usually display the following characteristics:

• Produced by taping live concerts using a portable cassette recorder, or taping directly by tapping into the venue's sound system or illegally procuring studio outtakes.

• Still found in long playing vinyl album format, occasionally in cassette format and increasingly in CD format.

• Street value ranges from $15 to $100.

• Vinyl packaging usually includes a two-colored sheet of printed paper describing contents of the album and attached to the jacket cover by adhesive backing or loose and inserted under shrink-wrap.

• CD packaging usually incorporates a multi-colored insert of a folded sheet of paper as opposed to a multi-page booklet.

• Name or trademark of the performer's legitimate record company is not included, but names of fictitious manufacturers often are.

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Who Gets Hurt By Piracy?
Consumers are the ultimate victims of sound piracy. Most illegal recordings are inferior in sound quality, often defective and sometimes are of an artist other than the one represented on the packaging. And as illegal recordings cannot be or exchanged, the consumer is stuck with the inferior product. In addition, the financial loss incurred by record companies, as a result of piracy, ultimately drives up the price of legitimate product.

Retailers and distributors lose sales to pirates because they cannot compete with the low prices charged for cheaply-produced, illegal copies. In some cities, illegal street vendors sell counterfeit cassettes literally on the doorsteps of legitimate retailers. According to legitimate retailers, these street vendors can usurp 35 to 40 percent of their business.

Recording artists, producers, composers, publishers of the compositions, musicians and vocalists who helped make the record, as well as musicians' unions, are all cheated by pirates out of their share of royalties. These people in the music community generally depend on royalties for their livelihoods, but more important their reputations are damaged when consumers unknowingly purchase poor quality copies of their work.

Record companies invest a great deal of artistic and technical skill, money and effort to create the master recording from which legitimate commercial copies are made. These companies also expend huge sums to search for, develop and popularize performers. Pirates do not bear the continuing costs of union fees, as well as contractual and statutory royalty payments. In today's marketplace, 85 percent of the records released do not recover production costs. Record companies rely on income from the 15 percent of recording that are successful to subsidize less profitable types of music (classical, jazz), new performers and composers.

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What Does the Law Do?
For many years, the unauthorized duplication of sound recordings, though always a problem for the recording industry, remained relatively stable. However, by 1962 record piracy had increased to a point that Congress enacted a statute making it a crime to transport, with fraudulent intent, records with forged or counterfeit labels.

With the development of tape recording, 8-track cartridge and cassettes, as well as high-speed, relatively low-priced duplicating equipment, the piracy problem began to grow at an alarming rate. Congress responded to the crisis by enacting the Sound Recording Amendment Act of 1971. Today, record, tape and CD piracy activities encompass crimes punishable on both the federal and state level.

Federal Laws
The three primary federal laws used to combat this crime are:

• 1) U.S. Copyright Law {Title 17 U.S.C. Section 101 et seq., Title 18 U.S.C., Section 2319 and Section 2319A}: The federal law protects sound recordings first "fixed" as of February 15, 1972. The law protects copyright owners from the unauthorized reproduction or distribution of sound recordings to the public. Section 2319 applies only to those recordings that are "fixed" with authorization on or after February I 5, 1972 (that is, when the performance is put into a tangible form such as a tape, record or CD).

  Those recordings "fixed" prior to February 15, 1972, are protected by criminal law through a state's unauthorized duplication statute. On the civil side, recordings are protected by a state's competition laws.

  Criminal sound recording copyright infringements are punishable by up to five years in prison and $250,000 in fines. Repeat offenders can be imprisoned up to 10 years. Individuals may also be held civilly liable to the copyright owner for actual damages or lost profits or for statutory damages up to $100,000 per infringed copyright.

• 2) Trafficking In Counterfeit Labels {Title 18 U.S. C., Section 2318}: This statute covers counterfeit labels intended to be affixed to a sound recording. A "counterfeit label" includes any component of the entire package of a prerecorded audio cassette, company disc or album cover. The definition also extends to a situation where counterfeiters have simulated "genuine" labels that have not previously existed. A person can be convicted under this law for trafficking in a finished product that contains a counterfeit label, as well as a component of that product, such as the insert card for an audio cassette. This statute imposes penalties of up to five years in prison and/or $250,000 in fines.

• 3) Trademark Counterfeiting {Title 18 U.S.C. Section 2320}: This statute deals with sound recordings that also contain the counterfeit trademark of the legitimate manufacturer or artists. The statute covers the "trafficking" as well as attempting to traffick goods containing the counterfeit marks. The penalties imposed by this statute for legal entities, such as corporations, range from $1 million to $5 million. Penalties for individuals range from five years in prison and/or $250,000 in fines to 15 years in prison and/or $1 million in fines.

• 4) Anti-Bootleg Statute {Section 2319A}: This federal anti-bootleg statute was created in December 1994. Like the pre-existing state statutes, the new federal statute criminalizes the unauthorized manufacture, distribution or trafficking in sound recordings and music videos of "live" musical performances. However, the federal statute also provides for the seizure of bootleg recordings or music videos manufactured outside the United States by U.S. Customs at the point of importation. In effect, bootleg recordings are now subject to seizure and forfeiture in the same manner as other property in violation of customs laws.

State Laws
Nearly all states have piracy related laws that make it a criminal offense to pirate, counterfeit or bootleg audio recordings. The three most commonly used state laws are:

• 1) True Name and Address Statute: This statute mandates the actual name and address of the manufacturer of a sound recording be displayed on the packaging. Because pirates, counterfeiters and bootleggers generally do not display their true name and address on illegal product, they are usually in violation of this statute. All sound recordings, regardless of the date of fixations are covered under this statute.

• 2) Unauthorized Duplication Statute: Pirate and counterfeit sound recordings "fixed" prior to February 15, 1972 are covered by this statute.

• 3) Anti-Bootleg Statute:Arenas, promoters and performers are protected against piracy under this statute, making it a crime to manufacture the sounds of a live performance of an artist and to distribute these reproductions.

Many of these state statutes carry a maximum penalty of up to five years in prison and a $250,000 fine; other state statutes carry misdemeanor penalties.

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