While the acts of pirates seizing oil tankers and commercial ships off the coast of Somalia have made headlines in recent months, a subtler form of piracy besets the gaming industry. These swashbucklers are armed not with automatic weapons and speed boats but with computers, manufacturing tools and loads of nerve as they plunder intellectual property rights in the pursuit of making inferior copies of popular slot machines. To combat this scourge, several major industry players — Aristocrat, WMS Gaming, IGT, Novomatic, Bally, Konami, Spielo, Progressive Gaming and Atronic — have joined forces to coordinate their efforts through the Gaming Industry Piracy Alliance. Associate Editor James J. Hodl recently sat down with WMS President Orrin J. Edidin, who has emerged as the leading GIPA spokesman, to find out the extent of the problem and what needs to be done to quash it.

Why did WMS and several other prominent game manufacturers band together at this time to form GIPA?

Edidin: In 2007, Aristocrat approached WMS and other manufacturers with the idea of establishing an anti-piracy alliance.  Through those discussions we realized that gaming manufacturers share common piracy concerns and that it would be beneficial to establish an alliance for sharing information and strategies for addressing these concerns. GIPA is a result of those discussions.

Why is fighting game piracy so important? 

Fighting gaming piracy is obviously important to manufacturers because of its economic implications and the likelihood that counterfeit goods will tarnish the reputations of manufacturers and their brands. Less obviously, but of great importance, counterfeiting also has the potential to harm the public. First, consumers play machines expecting a quality entertainment experience and reasonable payback potential. Counterfeit machines may have different math models, degraded graphics and sound, payback percentages below legal limits, security faults and a variety of safety defects. In these ways, counterfeit games can destroy players’ entertainment experience, decrease players’ odds of winning, and even increase risk to players’ physical safety. Second, the general public is greatly harmed because some counterfeiting is funded and perpetrated by criminal organizations.  In certain instances, proceeds from counterfeiting activities support other endeavors of criminal and terrorist organizations, thereby contributing to greater social harm. It is important for gaming manufacturers to do their part to shut down a potential source of funds for such activities.

How extensive is the piracy problem in the gaming industry? Can you provide some examples? 

It is difficult to say how extensive the problem is in the gaming industry. After all, counterfeiters take extensive measures to hide their activities. That being said, piracy is a real and growing concern. GIPA members have seen evidence throughout the world of piracy of gaming software, glass artwork, machine parts and even whole machines.

Can you put a dollar figure on the amount of business or sales that gaming manufacturers lose worldwide to piracy?

Dave Greenslade from Aristocrat told me it is difficult to estimate the exact losses in monetary terms as a result of product and intellectual property breaches, but he estimates the “grey market” for gaming machines worldwide is approximately 15 percent of all gaming machines, and with at least half of these containing illegal or counterfeit machines, the losses may amount to more than US$2 billion.

What will GIPA do to fight game and game technology piracy? For instance, will you be working with governments as well as the police?

GIPA and its members will utilize any and all means necessary to address piracy issues.  These will include lobbying government agencies and regulatory bodies, educating customs agents, bringing civil and criminal suits through the courts and coordinating enforcement efforts with law enforcement agencies. We will do whatever it takes to aggressively defend our valuable intellectual property.

Where in the world is the piracy occurring? And why is it occurring there?

While counterfeiters in all industries tend to gather in jurisdictions with underdeveloped intellectual property laws, lax customs procedures and/or low labor costs, there are no geographical constraints on piracy. GIPA members have reported issues in Australia, Asia, Europe, South America and North America.

There are some countries where not all patents are honored? For years manufacturers in some places in China and in other countries have produced copies of products ranging from expensive golf clubs to tins of shoe polish, even attaching brand names to them. How would GIPA approach such countries to get them to honor manufacturer patents and stop piracy?

Fundamentally, we will examine and pursue any available option. These include lobbying local regulators and government agencies, educating customs agents and local law enforcement and seeking injunctive relief and damages through the courts. Even if the laws of a particular country do not support enforcement of intellectual property we can seek to limit sales of counterfeit goods by working with customs officials in the countries that import the counterfeit goods and by pursuing purchasers of the counterfeit goods in other countries.

Are GIPA members getting help is other countries? Are there any particularly helpful nations assisting in the anti-piracy effort?

Without exception, in every country where GIPA members have brought counterfeiting issues to the attention of authorities the authorities have been enthusiastic and cooperative with enforcement efforts. One of the great advantages of GIPA is that its members are located around the world with special relationships in their home jurisdictions and regions, which paves the way for efficient establishment of those relationships for all members.

In what efforts to stop piracy have game manufacturers engaged in the recent past? What course of actions did they instigate to combat piracy? Were they successful?

Manufacturers are attacking these issues on all fronts. Some recent effective strategies include seizures of counterfeit machines with the assistance of law enforcement and new technological protections against copying of software. Of particular note, WMS, with the assistance of U.S. marshals, recently seized a large number of gaming devices containing unauthorized copies of WMS software in Texas. Novomatic has also had great success in Russia recently working with law enforcement and through the court system to shut down factories cloning its products. One such factory was producing over 2,500 counterfeit Novomatic machines per month. With the help of Russian authorities investigators uncovered in Kazan, the capital city of the Constituent Republic of Tatarstan, a complete factory churning out copies of Novomatic Gaminator machines, the contents of which were confiscated, and a list of buyers of the pirated machines was secured. … Through the ongoing efforts of GIPA and its constituents, pirates are certain to get the message: “We are going to find you and we are going to shut you down.”