Special Report: AICO Hits Down Under
In a recent interview with XBIZ, AICO Chief Executive Officer Graeme Dunne spoke about the methods, practices and strategies that have made life very difficult for would-be pirates operating in Australia.
XBIZ: AICO works primarily in the realm of pirated hard goods, correct?
Dunne: Yes, pirated DVDs, sold via websites, brick-and-mortar shop fronts, mail order catalogues and distributed by wholesalers are the main problems in Australia. Perhaps surprisingly, VHS piracy also remains a problem here.
XBIZ: Has AICO dealt with online piracy of adult products at all to this point?
Dunne: No, with the exception of websites selling DVDs — but these are sites selling hard goods, mainly DVDs.
XBIZ: Is online piracy an area that you anticipate AICO will tackle in the future?
Dunne: Definitely. Up until recently, Australia's online download speeds, even via cable, have been notoriously slow. I've already had preliminary discussions with AICO's lawyers about the threat we face from pirated online content and the need to develop strategies to tackle this emerging problem.
XBIZ: I noticed that AICO's website has a link for reporting piracy; does the group receive many such reports from consumers, or are the pirates uncovered largely by AICO's own efforts?
Dunne: We uncover pirates mainly through our own efforts and reports from our members. AICO does receive many piracy reports from consumers via our web link. It's also not uncommon for adult DVD retailers or wholesalers to phone or email piracy reports. Occasionally, we receive reports from state and federal police and the mainstream movie industry copyright protection organization AFACT.
XBIZ: When AICO receives a report of possible piracy, what are the initial steps that the organization takes to investigate the report?
Dunne: The first step is to buy films from the suspected pirate. This might lead to further purchases to get a better idea of the scope of the infringements. Of course this is done covertly so the infringers aren't aware they are selling to AICO or its operatives. We also need to find out information about the infringers and their companies. Often, much of this information is part of the public record. These steps allow us to build a picture of what is being sold, where it is being sold and who and where the infringers are. It is important to liaise with our members regarding our findings and the provision of information confirming their film ownership, rights and licenses. We then meet with our lawyers, present them with the evidence and determine the course of action to take. Should we commence court proceedings, our first steps include obtaining court-ordered injunctions preventing the alleged infringers from dealing in films without the authority or license of the copyright owner. We also obtain orders for the delivery up of infringing films, access to copying equipment and [all] documents, hard and soft, relevant to any infringing activity. A very important part of this process is getting the evidence of copyright ownership. We encourage all producers to register their films with the U.S. Copyright Office.
XBIZ: Are most situations resolved without litigation, or is taking legal action against content pirates the norm?
Dunne: To date, taking legal action has been the preferred course of action for AICO. Our members might have contact or discussions with suspected infringers prior to a matter being reported or referred to AICO for investigation. If AICO becomes involved, it usually means an infringement has been detected, and pending the findings of our investigations, legal action will be instigated.The industry has become well informed and educated about copyright, and AICO's successes in court are well known. For some matters, we start with letters of demand to the alleged infringer. Of course, you have to be willing to follow through with court action if the infringer does not respond satisfactorily to the demands.
XBIZ: Approximately how much money has AICO spent in its anti-piracy efforts, and about how much money has been reclaimed through judgments and/or settlements to date?
Dunne: We've spent approximately $3 million or more to date in legal and investigative costs. We've recovered more than half of this via judgments and settlements. By recovered, I mean this money has actually been paid by the infringers. We have other judgments of damages and costs in our favor of over $1 million that are yet to be paid. Some of this remains unpaid due to individual infringers becoming bankrupt and companies going into liquidation. We expect to realize about one-third of this outstanding amount, probably more. We have not done the exercise of measuring how sales of legitimate material have been affected, but we hear that sales of legitimate films are increasing on AICO-protected studios.
XBIZ: What advice do you have for anti-piracy groups in the U.S. who are now starting to organize and establish a joint anti-piracy effort?
Dunne: Banding together and cooperating is the key. I know this can be tough at times, particularly when you are working with your business competitors, but the benefits of fighting piracy under one banner are enormous. It is also essential that the organization have a clear vision of what it wants to achieve and how it's going to get there, and [that it] remain focused. There will be distractions and frustrations that come your way.
From the outset, AICO has used a three-pronged approach in its anti-piracy work: education, investigation and enforcement.
The use of the AICO hologram sticker, which our distributor members attach to the covers of their films, has been a real success. It has been great for branding and reinforcing our anti-piracy presence to wholesalers, retailers and consumers. More retailers in Australia are refusing to accept films produced by AICO studio members unless they have the AICO hologram. Content owners should welcome the opportunity to join together to create an effective, influential and hopefully potent anti-piracy organization. I always say that a victory for one AICO member is a victory for all of our members.