Electronic Arts and Sony Computer Entertainment America Nab Internet Pirate Ring Companies file joint lawsuit against online pirates REDWOOD CITY, Calif. and FOSTER CITY, Calif.--(BUSINESS WIRE)-- August 6, 1999-- Declaring war on a major Internet pirate ring that illegally uploaded, traded and distributed copies of their software, U.S.-based Electronic Arts(tm) (Nasdaq:ERTS), the industry's largest entertainment software publisher, and Sony Computer Entertainment America (SCEA), the company behind the PlayStation(R) game console, the world's best-selling videogame system, recently filed suit against certain alleged members of the ring in the U.S. District Court for the Northern District of California. Among other claims, the complaint asserts the defendants infringed the copyrights and trademarks of the two companies through the copying and distribution of software owned by Electronic Arts and SCEA. United States Marshals and lawyers for the companies recently conducted a court-sanctioned seizure and impounded evidence at the location of a participant of the group that calls itself "Paradigm." During the seizure, a computer, hard drives, CDs and other items related to the illegal operation were impounded by the Marshals. The complaint further notes that the seizure, as well as the investigation which preceded it, produced a significant amount of evidence against members of the worldwide ring located in the United States, Canada, the United Kingdom, Germany, the Netherlands, Denmark, Norway, Portugal, Sweden, Russia and other locations. The evidence identified by true name and location dozens of participants in the distribution of pirated software belonging to the companies. While SCEA and Electronic Arts plan to continue the civil case against the pirates, they also continue to cooperate with law enforcement in the United States and will be turning over evidence to authorities in several of the other relevant countries for possible criminal action against the group's members. "Putting an end to software piracy is a top priority for our industry," said Ruth Kennedy, senior vice president and general counsel, Electronic Arts. "Electronic Arts and SCEA believe that the break up of pirate Internet rings like this will be key to our success in combating the rising problem of Internet piracy. This action is part of our ongoing plan to find and prosecute these thieves." "Piracy of packaged entertainment software last year amounted to over US$3.2 billion worldwide for our industry alone. Electronic Arts alone lost more than $400 million. Internet pirate rings like Paradigm contribute to these losses by uploading games where the industrial pirates in places such as Asia or Russia can download them, turn them into copies of packaged goods and rush them to the street -- sometimes even before we get the legitimate goods to market," Kennedy noted. Pre-release or day-of-release software is highly prized by pirate Internet rings, that compete for "points" in the pirate community by being the first to "release" an illegal version of the product, often with copy protection and other content removed. Both companies praised the recently announced criminal "I.P. Initiative" by federal authorities including the Department of Justice, the FBI, and U.S. Customs, which as its goal has increased criminal prosecutions of pirates of intellectual property. According to Riley Russell, vice president of legal and business affairs, Sony Computer Entertainment America, "We will work diligently to ensure that these counterfeiters are fully prosecuted and that others who think Internet piracy and `trading' is acceptable will think again." Russell noted that last year alone, counterfeiting cost SCEA and Electronic Arts losses of several hundreds of millions of dollars around the globe. Other Internet rings besides Paradigm that are also believed to be involved in the pirating of entertainment software include groups calling themselves "Razor 1911," "Class," "Origin," "Hybrid", "Divine", "Fairlight" and others, with members based in the United States and in many other countries around the world. The companies are confident evidence developed in the current case as well as continuing efforts by the entertainment software industry will result in additional civil actions and criminal prosecution of members of these groups in the future. Electronic Arts, headquartered in Redwood City, California, is the world's leading interactive entertainment software company. Founded in 1982, Electronic Arts posted revenues of more than $1.2 billion for fiscal 1999. The company develops, publishes and distributes software worldwide for personal computers and video game systems. Electronic Arts markets its products under seven brand names: Electronic Arts, EA SPORTS(tm), Maxis(tm), ORIGIN(tm), Bullfrog(tm) Productions, Westwood Studios(tm) and Jane's(R) Combat Simulations. More information about EA's products and full text of press releases can be found on the Internet at http://www.ea.com. Sony Computer Entertainment America, a division of Sony Computer Entertainment America Inc., markets the PlayStation game console for distribution in North America, develops and publishes software for the PlayStation game console, and manages the U.S. third party licensing program. Based in Foster City, Calif., Sony Computer Entertainment America Inc. is a wholly-owned subsidiary of Sony Computer Entertainment Inc. Note to Editors: Electronic Arts, EA SPORTS, Maxis, ORIGIN, ORIGIN Systems, Bullfrog and Westwood Studios are trademarks or registered trademarks of Electronic Arts in the United States and/or other countries. Jane's is a registered trademark of Jane's Information Group, Ltd. PlayStation is a registered trademark of Sony Computer Entertainment Inc. All trademarks are the property of their respective owners. All files ©1999 Electronic Arts. All rights reserved.