Labels Hail Asian Courts' Moves Against File Sharing

Landmark court cases in Singapore and Hong Kong have raised hopes in the Asian music industry in its struggle against illegal file sharing.

In the first case of its kind, two men appeared in Singapore's District Court Jan. 13 on charges of violating the Copyright Act (enacted in 1987 and subsequently amended).

The pair were accused of illegally distributing music by uploading several hundred songs by local and international acts since 2002.

On Jan. 26, the second groundbreaking development arrived in Hong Kong, when Deputy High Court Judge Poon Shiu-chor ordered the territory's four largest Internet service providers to reveal the identities of 22 individuals suspected of breaching copyright laws by illegally sharing music files. It was the first such action by a Hong Kong court.

"File sharing is a massive problem, and these legal actions are the start of a process," says Hong Kong-based IFPI regional chairman Lachie Rutherford, who is also president of Warner Music Asia Pacific.

"I don't think we're near controlling this problem at all," Rutherford admits. "People can expect to see more of these kinds of cases."

The two Singaporeans, the unemployed Mohamed Faizal Osman and factory worker Mohamad Azry Zainol, were arrested in August 2005 by the Singapore police's Intellectual Property Rights branch as a result of information received from labels body the Recording Industry Assn. of Singapore.

District Judge Bala Reddy adjourned the case to an unspecified date in February. If found guilty, each of the accused faces a maximum sentence of five years and a fine of $58,000.

"This is the first such case in Singapore and should serve as a deterrent for those involved in illegal music downloads and uploads," RIAS CEO Edward Neubronner says. RIAS confirmed it has passed details of other home users believed to be illegally distributing music files to the police.

The Hong Kong High Court order was in response to a writ filed in November by the local IFPI branch on behalf of seven record companies including the local affiliates of EMI, Sony BMG, Universal and Warner.

IFPI Hong Kong Group CEO Ricky Fung says the next step for the labels group will be to "seek some form of pre-litigation settlement with the infringers, as is common practice internationally."

The four ISPs are Hong Kong Broadband Network, i-Cable, PCCW and Hutchison Global Communications. The 22 suspects are users of the popular peer-to-peer file-sharing service WinMX.

Fung says IFPI Hong Kong's anti-piracy campaign will focus on the illegal sharing of prereleases. "That hurts the music industry the most," he says. "When a prerelease is made available for circulation for free, the labels have no more hope that the title will be sold."

The court action is not aimed at gaining financial compensation, Fung claims. Rather, "it is about sending a strong message to music lovers that the way they are enjoying music is killing the industry."

Since September 2005, IFPI Hong Kong claims to have issued 32,000 warnings to people downloading music illegally via WinMX.

"If our positive actions continue to be ignored by certain members of the public, we are left with few other options than to enforce the law," says Kelvin Wadsworth, a Hong Kong-based Sony BMG Music Entertainment senior VP who heads the company's Asian operations.

"This will include defending the rights of our artists through legal means against corporations and, regrettably, individuals," Wadsworth says.

The IFPI blames the increase in file sharing for a five-year delcine in sales. It claims total music retail sales in Hong Kong fell in local value by 25% from $842.8 million Hong Kong ($108.2 million) in 2000 to $631.6 million Hong Kong ($81.1 million) in 2004. Figures for 2005 are not yet available.

Another problem territory in the region is Taiwan, where Rutherford says the government has not yet responded to the industry's appeals for action to counter file sharing.

The result has been a drastic decline in recorded-music sales in Taiwan, Rutherford says. According to IFPI Asia Pacific estimates, music retail sales in the territory fell 28% to $3.5 billion Taiwan ($108.6 million) in 2005. In the preceding five-year period, IFPI figures show local retail value fell slightly more than 36% from $7.5 billion Taiwan ($223.9 million) in 2000 to $4.8 billion Taiwan ($142.5 million) in 2004.

"The situation is disgraceful," Rutherford declares, and adds that file-sharing services in Taiwan "are basically making money by charging members of the public to use material for which we receive no money whatsoever." ••••



Reporting by Steve McClure in Tokyo; Christie Leo in Kuala Lumpur, Malaysia; and Bram Rosenfeld in Hong Kong.