Cops Spin Web for Software Pirates

ST. PETERSBURG — A St. Petersburg online store that has been shut down on suspicion of selling pirated software allegedly offered 3,700 titles that were packaged and sold for 40 rubles ($1.45) to 250 rubles to buyers in Russia and abroad.

The store, Logos CD-Trade, even offered courier delivery in St. Petersburg and postal delivery in Russia and abroad, said investigators.

The software was allegedly written by local software developers such as Garant, IC, Parus and Galaktika.

Three St. Petersburgers — whose names have been withheld by the police — who organized the shop are under investigation by the city prosecutor for violation of intellectual property rights. They have signed an agreement with prosecutors not to leave the city during the investigation. They were not jailed pending trial because the Criminal Code lists intellectual theft as a relatively light crime.

If convicted, the three could face anything from a $1,000 fine to five years in prison. Though investigators have not yet compiled enough evidence to bring them to trial, Viktor Ivanov, head of the special police unit that deals with high-technology crimes, said the shutdown of Logos CD-Trade will set a legal precedent that will allow further prosecutions. Investigator Alexei Kiselyov, 23, who spent a year probing the case, said Logos CD-Trade’s one mistake in unloading its unlicensed wares was taking them to the Internet.

Nonetheless, he was complimentary of the site. "Personally, I mostly liked the design of their site and their search engine program."

Pirated software is attractive to cash-strapped citizens because it is generally much cheaper than licensed software.

"Sometimes an unlicensed product is no different than the original one," said Mikhail Kanichev, the commerce director of Prompt, a company that manufactures computer-translation programs in St. Petersburg. "However, buying an unlicensed disc means that about half the programs don’t work because they were copied on low-quality discs," he said.

"Manufacturers, unlike many black marketeers, will let you return the product for one that works."

Kiselyov estimates that at least five other sites like Logos-CD-Trade are operating locally.

But gray areas — or outright holes — in the law make the pursuit difficult.

A quirk of the law makes prosecuting black marketeers difficult if not impossible is that in order for a case to be opened against them, the maker of the original product has to file a complaint with Russian authorities. This is compounded by the fact that few foreign computer companies are represented locally, and few outside the country are willing to make the trip.

The exception was Microsoft founder Bill Gates, who in 1997 met with former Prime Minister Viktor Chernomyrdin to discuss the piracy of Microsoft Windows. While promises were made, hardly anything changed on the black market.

"According to our research, about 95 percent of all computer programs in Russia are pirated copies," said Prompt’s Kanichev. "Each year, our company loses about half of it profits," he said.

This is mostly due to street traders, he added.

"For instance, traders … sell copies of our programs for 40 rubles to 500 rubles," said Kanichev.

Prompt won 14 suits in 1998 against street vendors. "The smallest punishment for violating an author’s rights was a fine of about $1,000," said Kanichev. "In the case of Logos-CD-Trade, the punishment may be more severe and the main aim of this action is to create a legal precedent for further prosecutions," said Kanichev.