Aripaev July 16, 2001
Pirates Discover the Estonian "Nokia" by Virkko Lepassalu Over the past few years, Customs has confiscated tens of thousands of counterfeit or pirated items, but the question, what is to become of all these impounded goods, remains unanswered. Customs Board warehouses are almost at a bursting point because of all the seized goods being stored there. Presently, among the most commonly pirated industrial products, Nokia has taken the number one spot away from Christian Dior perfume. Customs Service specialist Ivar Kasema asserts that last year nearly 12,000 batteries, cellular phones, and other miscellaneous items bearing the Nokia trademark were determined to be counterfeit. These were manufactured in China, Hong Kong, and even in Great Britain. This year there have been about twenty incidents involving the confiscation of Nokia-brand products. Customs agents have already identified a total of 805 items as pirated goods, while thousands are still being processed. According to a report released Friday by the industrial intellectual property organization CIPR (Coalition for Intellectual Property Rights), damages caused by the pirating of intellectual property in the three Baltic states reach a total of 100 million dollars, or many billions of crowns a year. "If we look around in government agencies, we see that the bench seating intellectual property defenders is quite short," says the CIPR's Estonian representative, who nevertheless admits that progress is being made. Despite the Customs Board's efforts, counterfeit goods shipments still slip through, and ads appear in every issue of "Kuldne Bors" ("The Golden Exchange" - a want ads weekly) to entice the gullible. Upon calling the number in one ad, a man's voice reassuringly insists that the batteries in the Nokia 3310 package have been brought directly from Finland and cost 250 crowns (approximately $ 14 US). But he has no idea what company manufactures them. Talking with a salesman of Esmofon Grup, Estonia's official distributor of Nokia products, it becomes apparent that the cheapest battery available for these phones, manufactured legally in the Finnish Insmati factories, costs 590 crowns (approximately $ 33 US). The most expensive and most durable lithium battery, off the conveyor belt of Nokia's factories, costs as much as 850 crowns. (Roughly 48 dollars US) Quite often, disappointed consumers visit Esmofon with a recently bought so-called Nokia-brand battery which has ceased to function after a few weeks. In these cases, the manufacturing country usually is not marked on the battery. Ericsson phones also appeared on the pirated cellular phone market, assembled from parts stolen from the (Estonian-based) Elcoteq plant. If police investigators wanted to, they could add the charge of counterfeiting merchandise to the already long list of charges facing these thieves. Statistics show that after the Christian Dior era, which preceded the Nokia boom, there was a major onslaught of pirated clothing. Adidas, Nike, Reebok, and others had "cousins" like Adibas, Red Book, etc., which were produced in Polish and Lithuanian semi-underground workshops. The distributors of counterfeit merchandise often justify themselves with these distorted brand names, although the law regards even the use of similar sounding trademarks as piracy. Presently, Adidas is in stride right behind Nokia, with regard to the quantities of counterfeit goods that make it to Estonia. If, in 1999, customs seized approximately 5,500 pirated items bearing the Adidas trademark, then last year the number was already 8,500. Usually between 4 to 10 items are found at a time. Attorney Andres Aavik, who represents the Adidas trademark, takes a walk around Kadaka market from time to time. He inquires: why are you selling fake Adidas goods? You know very well that the police could punish you. But the Finns want them, answer the salespeople. "Our kids are much more trend conscious. It's usually frowned upon, if someone in the group wears pirated Adidas. Therefore, our children's world is obviously harsher," says Aavik, discussing how dependent piracy is on social acceptance or rejection. "But Finns are indifferent to what their children bop around in when they're outside." Many poor Estonians make a living out of this Finnish pliability. At the Karjurnai Market in Lithuania, they buy four to five pairs of pirated Adidas shoes, and resell them in Estonia. "If our black market is forced to operate underground, then in Lithuania it functions quite openly," says Estonian representative. Official trademark representatives can tell legends about the Karjurnai market - how Adidas logos are sold in big rolls. Aavik and his colleagues have placed counterfeit goods into three categories: poor, fair, and quite good. From Karjurnai, it is possible to get only poor quality rags. The better and very good fakes originate in China or Hong Kong. These are often produced in factories, which at one time were Adidas subcontractors, and are therefore very familiar with the technology and marking system involved. Being forced to run a constant race with the black market, Adidas is making changes again. Aavik sees two problems in connection with trademark protection. Firstly, large firms cannot be bothered with protecting their rights in Estonia, since it is in a very marginal sector of the market. The second problem is that in Estonia there is no practical experience destroying confiscated goods. Adidas gave their lawyer free reign. They are not going to bother about a couple of garments, but will definitely act if larger quantities are involved. But Adidas's competitor Fila told Aavik outright: there is no sense getting involved, if there are less than a hundred items. Small peddlers who deal in a single bag of goods at a time naturally take advantage of this. If within five days the trademark representative does not submit to Customs an official complaint against trademark infringement, the goods have to be released. In principle, in Estonia the laws protecting trademarks permit legal proceedings to be initiated even in the case of a single item, a provision that pleases Aavik, as the representative of 20 trademark owners. "It's quite sad to see police officers sitting on top of big bags full of pirated goods," says Aavik. Customs specialist Ivar Kasema states that the question of what to do with confiscated merchandise was last discussed on June 21 in the Ministry of Finance. Under debate was the possibility of donating the counterfeit clothing to health care and social welfare agencies. Kasema estimates that the logo can be removed from about 70% of fake clothing without damaging the garment. The question of who should undertake this task is still unanswered. Aavik believes that this work would be suitable for short-term convicts. Aavik recalls a shipment consisting of satchels bearing both the Nike and Adidas logos. In that case, it would have just taken a few daubs of paint, and the backpacks could have been donated to orphanages. SIDEBARS Finns are indifferent to what their children wear while running around outside. Andres Aavik, the representative of the Adidas trademark in Estonia, on the buying of pirated merchandise. Quantities of counterfeit or pirated merchandise confiscated by customs In 2000
66,858 items, of them 8,460 were garments During the first half of 2001
34,490 items As of January 1, Customs has seized
14,156 pieces/pairs of clothing On the list of pirated merchandise most often encountered in Estonia, Nokia is at the very top, followed by Adidas, Reebok, Nike, etc. The list of alcoholic products is dominated by Stolichnaya and Moskovskaya, sweets by Belot. Source: Customs Service | 
