The report ranks Russia together with India, Pakistan, and Nigeria as the worst countries for piracy, with Bangladesh at the top of the list.
"Russia's economy is ingrained with high-levels of piracy", the report said, adding that the country had failed to protect property rights.
The Alliance urged countries to introduce measures to prevent piracy and to protect American trademarks and intellectual property in audio and video production, the music industry and computer software.
The Netherlands, Norway and Denmark were among the world's best states for protecting copyright laws. Surprisingly, the US, Canada and Ireland were ranked at 14th in the IIPA list.
Recently Russia has been strongly criticized for its failure to protect intellectual property rights.
The issue was a major stumbling block in Russia's World Trade Organization accession talks with the United States. The sides eventually signed a final agreement last November after Moscow promised to get tough on intellectual property violations.
The problem of unlicensed software in Russia has been highlighted by the case of school principal Alexander Ponosov, charged with copyright violation after he bought a set of computers for his school containing unlicensed Microsoft software.
