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Labels turn guns on workplace pirates

Trade groups for the record and film industries are turning up the heat to get corporations to crack down on file-swapping on their networks.

Trade groups for the record and film industries are turning up the heat in their efforts to get corporations to crack down on music and video piracy conducted on workplace networks.

The Recording Industry Association of America (RIAA), the Motion Picture Association of America (MPAA), and the International Federation of the Phonographic Industry (IFPI) are jointly distributing a brochure warning of the dangers of Internet piracy to hundreds of corporations around the world. The document, which is going out to the Fortune 1000 companies in the United States, urges the companies to crack down on employees' copyright infringement--or face legal consequences.

"Unfortunately, employees of companies and other organizations sometimes use their employers' computer systems to engage in unauthorized copying of music, movies and other copyrighted material," says an attached letter jointly signed by RIAA Chief Executive Hilary Rosen and MPAA Chief Executive Jack Valenti. "Such activities on your systems can put your organization at legal risk, tarnish your organization's reputation and increase security risks for your computer systems."

As they pursue file-trading software companies such as Sharman Networks in court, the big copyright-holder trade associations are increasingly trying to stem Net piracy at its source. Late in 2002, the U.S. organizations sent similar letters to Fortune 500 executives and legal counsels at universities around the country, warning them that their high-speed networks could be used for piracy.

In addition, the record industry is in court seeking the right to subpoena Internet service providers directly for the names of subscribers who are trading files illegally online. Verizon Communications is fighting this request in federal court, saying the request violates the privacy of its customers.

The new brochure contains one of the starkest warnings yet that businesses face legal liability for their employees' actions. The RIAA has already struck a $1 million settlement with one company in which employees were widely sharing music files on an internal network, and the document makes it clear that other businesses could be targeted if similar activities are found.

"When your employees put music, movies, videogames or other software on your computer systems without a license or other permission from the copyright owner, it is not 'sharing' or 'fair use.' It is theft," the brochure reads. "When these works are made available to others in your organization, or to the public over the Internet, it is no different than running an illegal distribution business."

The brochure exhorts companies to audit their own networks for pirated material, delete any copyrighted works found, and designate a copyright-compliance officer.

It also turns the spotlight on the drain on corporate resources and on the security problems raised by employees trading copyrighted files. Corporate security companies say these concerns in particular have been resonating among businesses in recent months.

Pete Cafarchio, vice president of business development for Pest Patrol, says the security company's corporate clients have increasingly been interested in eradicating any unauthorized applications that are using network resources or--more importantly--sending data of any kind outside the corporate firewall. Many free file-swapping programs are distributed along with advertising software that collects user information and sends it back to the parent company's servers.

"Business customers' argument is that there should be no unauthorized (network) communication," Cafarchio said. "Bandwidth and resource consumption is the real driver for them."