Diena

August 6, 2001

A Protected Idea Costs More

Importance of Intellectual Property Protection Growing Among Business Environment Issues

by Aiga Pelane

The gradual improvement of the business environment has brought attention to issues having to do with the protection of intellectual property rights. In other words, the material forms given to the ideas created as a result of human brainwork are slowly becoming a most valuable commodity, which nobody wants to give away for free.

An increase in the number of disputes about trademark ownership and cases of imitation, the discovery of counterfeit products, measures to limit the distribution of pirated software and CDs, disputes over the amount of authors' rights royalties - all this is evidence that in Latvia the fruits of intellectual labor are finally getting their due acknowledgement and protection. Moreover, it is significant that the bulk of activity is coming from private companies themselves, or the non-governmental professional and sector organizations they have established. Unfortunately, one often hears of the government's insufficient interest and lack of attention to intellectual property protection, as well as a weak court system.

Latvia is no better or worse than other post-Soviet states now trying to assess properly the growing importance of this sphere. Through the learning process and practice according to international standards, Latvia must also consider solutions to new problems preoccupying the defenders of intellectual property all over the world. For instance, how to protect intellectual property owners' rights in the Internet, electronic commerce and the field of biotechnology.

Problems disturb

In a recently conducted survey by the Coalition for Intellectual Property Rights (CIPR), corporate executives from all three Baltic states cited inadequate protection of intellectual property rights as the fourth most important problem hindering their successful business operations.

This problem ranked just behind state tax policy, government bureaucracy, and customs issues, more important even than public sector corruption. Other issues rated less important than intellectual property rights protection included investment legislation, the court system, failure to observe contract terms and violations of shareholders' rights.

CIPR President Peter Necarsulmer told Diena that intellectual property protection systems are based on three main pillars: legislation, the political will of government and financial resources which allow for the implementation of laws in real life. Necarsulmer acknowledged that Latvia's legislative base is relatively strong. However, it would be premature to believe the government's political will is as strong.

"They say the right things, often enough, as required by the European Union and World Trade Organization. Yet many in government lack a deeper understanding of this sphere and the real situation," stressed the CIPR president. Moreover, even though Latvia has established a normal legislative basis, it is too soon to speak of real and appropriate enforcement efforts. Necarsulmer added that one of the problems is connected with the weakness of the judicial system - its inability to assess appropriate sanctions against violators. Many state agencies operating in the field are working successfully to the best of their abilities, yet often lack staff and financing.

Doesn't seem important to government

"The government currently takes intellectual property protection issues too lightly,": believes Armins Petersons, president of the Patent Attorneys' Association of Latvia, adding that "it has such an attitude toward all issues for which you don't get your head ripped off." The situation in this area is not catastrophic, which is why the government can afford to act this way. "The justice system is the weak link, but it will take time. Judges need to learn and understand what intellectual property is, and this is happening," claims Petersons.

Working with business executives on a daily basis, Petersons has noted that local firms have finally begun to realize the need to protect the property they have created. "This is best felt in the food processing industry, where more and more executives understand the value of the trademark, since this is a developing sector," believes the patent attorney.

Necarsulmer also emphasized that now is the time not only to invest in the creation of new trademarks. Serious investments must also be made in the protection of existing trademarks. "The government alone cannot solve all these problems. Businesses themselves must get involved in protecting their rights more actively. The investments required to register a trademark or patent are not that great. Yet only half of the executives surveyed by CIPR had registered their trademarks," Necarsulmer noted.

Expenses related to market research also pay off, since they clarify what is happening in the market, whether or not someone is trying to knock off or imitate another product. He added that not only miscomprehension of the problem, but also lack of trust in the government and courts leads businesses to do nothing to protect themselves.

Without extra financing

Last week the Cabinet of Ministers committee meeting considered the Strategic Development Program for Intellectual Property Protection 2001-2005. Although it was not approved in final form, it will be redrafted into a Strategy. The Cabinet committee will consider the draft policy document again on September 1.

It can be said that the current document is merely declarative, full of terms like "encourage, support, activate, and raise". It does not call for additional budget resources for implementation, but rather charges the responsible ministries with executing the assignments according to existing budget capacity. The Coordination Council planned as the implementing body for the Strategy will also function without financing - according to the principle of volunteerism.

As Justice Ministry spokesman Andris Vitenburgs told Diena, the emerging document testifies to the government's interest in resolving this problem. "The sphere of intellectual property protection touches not only upon the work of the Justice Ministry, therefore it is essential to approve the strategy at the Cabinet level, so that the ministries can coordinate their work," adds Vitenburgs, stressing that regular training programs for judges on these issues are being conducted. "But we can't do it all in one day," admits the ministry representative.

Graphic and caption: Human head with keyhole

In Latvia materialized ideas are gradually becoming a most valuable commodity, which nobody wants to give away for free - unfortunately intellectual property protection at the state level lags behind demand. The judicial system is still only learning.