Aripaev

July 16, 2001

Damage Caused by Piracy Reaches Into the Billions

The damage caused every year by intellectual property piracy is measurable in the billions of crowns, states a research report released on Friday in Riga by the Coalition for Intellectual Property Rights (CIPR).

Businesses questioned in the course of this study responded that issues connected with the protection of intellectual property rights were fourth in order of importance, after matters connected to dealings with tax, customs and government bureaucracy.

The heads of these firms found that in the field of protecting intellectual property, protecting trademarks was of primary importance, followed by issues associated with counterfeiting of merchandise, the protecting of patents, and problems connected with copyrights.

Also of concern was the pirating of Internet domain names. It is interesting to note that Estonian executives found this to be more important than did Lithuanians and Latvians.

The study also showed that entrepreneurs do not trust governments with the protection of intellectual property rights. Of government institutions, the national patent offices received the highest ratings.

In contrast to their Latvian and Lithuanian colleagues, Estonian executives responded that our Ministries of Culture and Justice ministries are doing a good job, and relatively good ratings were also given to our courts.

Respondents in all three Baltic states said that existing laws fulfilled their requirements, but that civil servants, the Customs service and the courts are not up to implementing these laws, since they often lack the means and capacity to do this.

Estonia just made its laws dealing with piracy harsher. Starting in September, it will also be possible to punish piracy with imprisonment.

CIPR President Peter B. Necarsulmer estimated that piracy causes damages to the tune of billions of crowns in the Baltic States because of unpaid taxes, the cost of police actions and also the loss of consumer trust in well-known trademarks. "The damage caused to Lithuania's, Latvia's, and Estonia's international reputation, which influences foreign investments and reduces economic activity, is possibly even more significant," stressed Necarsulmer. The report points out that the consumers suffer the most, for it is they who may unknowingly purchase faulty merchandise: food, medicines, or household goods which may affect people's health and in some cases even be lethal.

The study was based on information obtained from international firms operating in the Baltic States, such as Kraft Foods, Coca Cola, Merck, Sharp & Dome, etc. Large local firms were also polled. Among the Estonian firms questioned were Hansapank, Kalev, EMT, and others. In the three Baltic States, a total of 102 firms participated in the survey.

PHOTO CAPTIONS

• Merchant selling clothing bearing the Adidas logo at Tallinn's Kadaka Market.
• Pirated cellular phones confiscated by Estonian Customs.
• Attorney Andres Aavik represents twenty trademarks in Estonia, among others, the competitors' favorite, Adidas.