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Marlowesque Gumshoes Help Hollywood Erase Video Piracy

ON the vendor-packed side streets of East Los Angeles, where smog and capitalism come in several shades of gray, detectives Ken Jacobsen and Dave Dolson are about to deliver a message in black and white.

"Wheel in the boxes boys, this is going to be a big haul," says Mr. Jacobsen, as he pushes open the door of VideoVision Movie Rentals, a mom-and-pop-sized store.

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Acting on the tips of civilian informants and the advance work of the Motion Picture Association of America's special investigators, the dynamic duo follows a scenario increasingly repeated from San Francisco to Shanghai. Their mission: seize illegally produced cassettes, gather evidence of unlawful acts, and serve notification to appear in court.

Stung by the annual loss of $3 billion worldwide, the MPAA has had it up to their cash register with pirates who produce, rent, and sell unauthorized copies of popular movies. Video piracy has long been a problem overseas, but today the American movie industry is cracking down on a growing black market in videos at home.

Last year in the US, MPAA's antipiracy units (working with local law-enforcement officials) conducted 1,200 raids in dozens of cities coast to coast. The number of unauthorized copies of movie videocassettes seized in the US during 1995 jumped by 30 percent to more than half a million.

The MPAA estimates the cost to the movie industry within the US to be nearly $300 million. Video pirates have carved out 10 percent of the US rental market simply by purchasing one or two authorized copies and making thousands of duplicates by hooking up one VCR to another.

As part of the new push to put US pirates out of business, MPAA investigators now target those producing illegal videos, rather than only those selling them. Last year, the MPAA reported a 63 percent increase in the number of VCRs they confiscated for illegal copying.

"We attacked video piracy in a new way by going directly to the source - the labs producing the illegal product," says Jack Valenti, president of the MPAA, a trade association representing the top eight US movie studios.

In preparing for its East L.A. raid, the MPAA follows tips from a call-in hotline (1-800 BADCOPYS). After sending scouts to rent tapes from the store, agents use a scanning device to determine that a high percentage of the store's rental tapes are illegal.

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With perfunctory dispatch, the five investigators serve the lone employee a stack of legal papers - including notice to appear in court within 10 days, restraining orders to prevent the store from continuing to rent or sell illegal copies, and a court-order allowing them to fully examine the store's inventory.

"See how the blue ink on this label runs into the brown? That's a fake," says Mr. Dolson, holding up a copy of the 20th Century Fox movie "Marked for Death." Other telltale signs: labels photocopied rather than printed, company logos missing on either end of cassette, or "heat stamps" - colored impressions of numbers stamped into the black cassette holder.

Within two hours, the five will box more than 700 illegal cassettes, hand the store clerk a computer-generated receipt of seized inventory, and be on their way. This case is a first-time civil procedure, so no one will be incarcerated. But store owners are liable for at least a $50 fine for each fake cassette. Repeat offenders and those caught producing tapes are often handcuffed and taken to jail.

At VideoVision, in a drawer underneath the cash register, Dolson discovers an electronic device about the size of a cigarette pack known as an RX2 copyguard defeater. It is used to override the anticopy encodings encrypted on some movie tapes, rendering them impossible to reproduce. "This is a pretty good tip-off that these folks are producing their own copies," Dolson says.

In addition to the monetary losses the movie industry faces, the MPAA highlights other negative consequences of video piracy: a loss of manufacturing and sales tax revenue to local, state, and federal coffers; inferior tapes for customers; and unfair competition to legitimate video-rental businesses.

"Video piracy creates and sustains an underground economy that deprives government of legitimate revenue while feeding other criminal activity," says Ed Pistey, director of MPAA's US antipiracy operations.

Because the nature and scope of the problem is so large - and growing - the experience of those used to combat it is formidable. Before joining the antipiracy unit of MPAA last year, Jacobsen spent 27 years as a special agent for the FBI. He and Dolson - also a former FBI agent - also have credentials as Los Angeles Police Department detectives. "This job uses every skill I spent my career developing," Jacobsen says, "tracking people, finding out who they are, where they are, what they are up to."

Noting the emergence of new forms of digital reproduction that are easier to duplicate without telltale degradation in quality, the MPAA's Mr. Pistey says, "Advancing technology is only going to make our jobs harder."

ONE major concern of the MPAA units is plugging leaks from new movie products, which can sometimes result in the circulation of an illegal copy of the movie before the company has released its own cassette. When copies of last year's "Waterworld" hit the streets of Moscow before the theater release of the film in the US, Jacobsen was instrumental in tracking the leak to its source in Los Angeles.

In addition to the crackdown on pirates at home, the MPAA is also beefing up its investigations abroad. The MPAA has opened units in Brussels, Singapore, and Rio de Janeiro in recent years.

"[The MPAA] has a very effective presence in lots of different countries," says Steve Metalitz, general counsel for the International Intellectual Property Alliance. "They're not just parachuting in to conduct some raids. They're actually building and maintaining relationships with governments to help improve copyright laws and get better enforcement."

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