Russobit-Soft piracy claims rejected.

The IFPI has failed in its bid to prosecute a Russian optical disc manufacturer which it claims was responsible for producing high volumes of counterfeit CDs.

On behalf of a number of leading record companies, the IFPI in December 2003 launched a suit against the Moscow-based Russobit-Soft plant for damages totalling $1,366,600.

Investigators' evidence supported the industry's argument. A probe into Russobit-Soft's activities linked it to numerous illegally-produced CDs, which were located both domestically and abroad. The Arbitration Court of Moscow Region on Dec. 7 however rejected the IFPI's move after the plant's legal representatives denied any connection with the illegal discs.

"We need to see the reasoning behind the decision," says an IFPI spokesman. "We remain confident of the fact that the discs were produced there and they are pirate." Privately, IFPI sources say the court's decision came as a shock.

EMI, Sony Music, Warner Music, BMG and Sanctuary where among the record companies who brought the claim, in what was the first such civil proceeding taken against an optical disc plant in that country. It is alleged that the company pressed counterfeit CDs by such artists as Destiny's Child, Michael Jackson, Enrique Iglesias and Radiohead.

A spokesman says the IFPI will "consider its options" before deciding whether to contend the decision.

The Russobit-Soft case is part of the industry's ongoing offensive against the country's illegal CD output. With a pirate market valued at $332 million in 2003 and piracy levels reaching 64%, the IFPI recognizes Russia as a "priority territory." In recent years, the trade body has blamed flawed legislation, weak enforcement and insufficient penalties for undermining efforts to bolster its legitimate music market. Only China has a bigger piracy market, the IFPI says in its "Commercial Piracy Report 2004".