Copy wrongs

Million-dollar ruling against N.J. merchant highlights 'Bollywood' movie-piracy trouble

Friday, May 25, 2007
BY GREG SAITZ
Star-Ledger Staff

Inside the packed quarters of Vijay Music Centre/Appliances, shoppers can find gold jewelry, blenders and a dizzying array of Indian music and movies.

The former owner said the store along Newark Avenue in Jersey City offers only legitimate videos. But authorities say that wasn't always the case, and Vijay's prior practice of selling pirated "Bollywood" films from India has landed the store and its former owner in serious legal trouble.

Last week, a federal judge levied a $1.1 million judgment against the business and Jayesh Modi, the former owner, for violating a court order prohibiting the sale of counterfeit copies of certain movies.

The ruling was a significant victory for Yash Raj Films, one of India's largest film producers and distributors, which for years has aggressively pursued stores in New Jersey -- where the Asian Indian population numbers nearly 230,000 -- and elsewhere selling bootleg copies of its movies.

Movie piracy costs the worldwide industry $18 billion a year, according to a trade group, and is rampant among sellers of Bollywood films, observers said.

"It is unbelievable. It is very extensive," said Ken Naz, North American chief executive of Eros International, an Indian film distributor in Secaucus that sued the Vijay store and Modi in the late 1990s for allegedly selling counterfeit movies. "We bang our heads against the wall. They do it openly. They laugh at us when we try to do something. They are not scared at all."

In an interview earlier this week at the store he said his sister now owns, Modi said they were not selling counterfeit movies, but insisted pirated DVDs are easily found elsewhere.

"This is a general practice in the Indian market," Modi said.

Raju Patel, president of the Jersey City Asian Merchant Association, blamed the piracy problem on distributors, who he said years ago allowed stores to make their own copies of movies after buying a master copy.

"The truth is those people who are bringing the videos over here are the ultimate culprit," said Patel, who is not in the video business. "It is them who created the nonsense of this market."

However the current climate evolved, the result is a pitched battle by film companies to assert their copyrights.

The founder of Yash Raj Films, Yash Chopra, has said piracy is "a cancer that is afflicting the whole industry." Another company executive estimated that for every dollar in sales of authorized films, the business loses several dollars of sales to pirated copies.

Yash Raj Films USA filed the federal lawsuit involving the Vijay store and Modi in December 2001. The complaint also named a handful of other stores and owners in New Jersey, as well as a replication business in Texas.

Prior to the $1.1 million judgment handed down last week by U.S. District Judge John Lifland in Newark, Yash Raj Films had won awards of more than $3 million against other defendants, according to court records. William Poppe, a Fort Lee attorney who represents Yash Raj Films, had asked the judge in court papers to award $5.5 million against Vijay.

He described Modi as a repeat offender.

"It's typical," Poppe said. "When you find a relatively easy way to make a lot of money, it's hard to give it up."

Modi agreed in an October 2002 settlement not to sell counterfeit copies of Yash Raj films. But a raid at Vijay in August 2003 by U.S. Marshals revealed more than 1,000 pirated Yash Raj DVDs and 37 VHS videotapes, including such hits as "Kabhi Khushi Kabhi Gham" ("Sometimes Happiness, Sometimes Sadness").

Marshals also seized products from an adjacent video store, which Yash Raj was suing as well, according to court documents.

At a hearing nearly three years ago to suppress evidence from the raid at Vijay, Modi testified about a storage area where hundreds of counterfeit DVDs were found.

Modi initially denied knowing about the DVDs, then said he allowed people from the New Jersey area and Canada to store DVDs there, according to the judge's ruling. Modi went on to say he didn't know how the videos got into the storage area, then testified Canadian distributors "forced" him to let them use the closet.

At one point Modi speculated that a Yash Raj attorney and executive put the DVDs in the storage area, the court filing shows. "All of Modi's testimony about the counterfeit DVDs in the storage closet was incredible," the judge wrote in his order granting the $1.1 million award.

The next day, Modi's attorney, Harvey Poe, came into court and acknowledged Modi lied during his testimony, according to a transcript of the hearing. Modi got back on the witness stand and admitted he put the DVDs in the closet.

Through a partner, Poe declined to comment.

A separate raid of Vijay in November 2000 by the organized crime bureau of the New Jersey Attorney General's Office resulted in more than 3,000 counterfeit Indian movies and sound recordings being seized, the agency said. The status of the state investigation was unclear yesterday.

Meanwhile, Yash Raj and other distributors of South Asian films continue to pursue pirating in New Jersey and around the country. Poppe said there have been other legal actions in Illinois, California and New York.

And Naz, from Eros International, said his company still pursues counterfeiters.

"Unfortunately, this is a fight that never ends," he said. "It's like plugging the Titanic -- you close one hole and 10 new holes surface."

Greg Saitz may be reached at gsaitz@starledger.com or (973) 392-7946.