Russia's illicit industry booming

The later, high quality copy was made from the original 35mm film using a telecine machine — the expensive equipment used by television studios to convert film onto video, DVD or computer files. A comparative rarity elsewhere in the world, copies made with telecine are a dime a dozen in Russia: assuming the film can be covertly removed from the cinema to one of the 20 telecine machines in Moscow, there are no clauses in the copyright law that make the process of copying a motion picture to disc any harder than photocopying a newspaper.

And the pirate markets and stalls that dot Russian cities and the capital are as abundant as ever: Corruption among Russia's poorly paid police force means that the stalls' owners can bribe their way out of most situations.

Meeting the challenge of pirated downloads
Now Zemchenko is gearing up to meet the challenge of pirate movie downloads from the Internet. One site lets visitors download The Omen and other recent releases, while infamous Russian pirate music site allofmp3, which is already challenging Apple Computer Inc.'s iTunes with its knockdown prices, also offers films.

Russian prosecutors are already pursuing a criminal case against allofmp3, but Igor Pozhitkov, head of the International Federation of the Phonographic Industry in Russia, calls the current situation with the site “ridiculous.”

“It's as though a person is stealing your electricity. The prosecutors determine that what they are doing is illegal, but they just keep on stealing it while you have to wait for the courts,” he said.

Weeding out the web providers
Already Zemchenko has assigned a staffer to monitor and weed out web providers that host such sites full time.

Total losses to Russian and foreign companies from all forms of intellectual property theft clock in at between $4 billion and $6 billion, according to German Gref, Russia's minister of economic development and trade.

And while Russian President Vladimir Putin has called on the government to take advantage of the country's soaring oil revenues to steer the economy away from its traditional reliance on its raw mineral riches, Chris Israel, the U.S. coordinator for international intellectual property enforcement, argues that goal is already in jeopardy.

"You certainly cannot have a globally competitive, knowledge-based economy without strong intellectual property rights protection," Israel said.

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