PUBLIC-PRIVATE PARTNERSHIP:
SECURING AND ENFORCING TRADEMARK RIGHTS
Remarks by Janet L.Hoffman, Representative of the Executive Policy Committee of the Coalition forIntellectual Property Rights and Legal Advisor to Anheuser-Busch Incorporated
7-8 October, 1999
Moscow, Russian Federation
Ladies and Gentlemen,
First, I would like to thank you for theopportunity to appear at this Symposium and to speak a bit about the Coalitionfor Intellectual Property rights (CIPR) which was formed in May of this year.
As a representative of one of the most substantialinternational corporations, and largest beer manufacturer, in the world –Anheuser-Busch Incorporated, a great friend and supporter of the Coalition-- and as a partner of Fross ZelnickLehrman and Zissu, a New York law firm which advises many prominentinternational companies and owners of some of the most famous trademarks in theworld, I am especially grateful for this opportunity.
I decided to make my remarks not in my native,English, language, but in Russian, as a symbol of the Coalition's desire, andintention, to speak in YOUR language – and as a symbol of the fact that thereexists among us a common language. Forme it is an especially great honor to be in Moscow at a meeting of such outstandingand experienced experts in intellectual property, some of whom I have had thepleasure of meeting already, and others of whom I hope to meet in these twodays.
As an adviser and representative of Anheuser-Buschon intellectual property issues, and, as an active member of the InternationalTrademark Association (INTA), for many years I have represented, and continueto represent, the interests of trademark owners. This is why I was invited here today to discuss with you whatprivate industry – in particular, brand owners – need from governmentsregarding trademark protection and enforcement.
To many, probably most, of you, the issues I willtouch on today are familiar. In yourwork as representatives of government, and of private clients, you no doubtencounter new and challenging issues daily. What I would like to do today is share with you, briefly, my thoughts onhow an organization such as CIPR can help you contribute to the economy of yourcountries by paving the way for, and encouraging, private industry to dobusiness here.
Often in discussions about intellectual property,the importance of trademarks is undervalued or minimized. This could be due to the existence of other,seemingly more pressing, economic and political issues and events. As you know, however, failure to protect andenforce trademark rights can have a staggering economic impact. Lack of protection or enforcement can leadnot only to loss of rights and injury to the trademark owner, in the form ofdamages and injury to reputation. Itcan also lead to significant loss to the country and its economy through lossof jobs, government revenues from taxes and customs duties, and loss of foreigninvestment.
For example, from the perspective of trademarkprotection, companies, and especially companies which own internationally knowntrademarks, may be precluded from investing in a country, due to the piraticalregistration of their internationally famous mark by a third party, who thenseeks to sell the mark to its rightful owner for exorbitant sums of money. Or, the rightful owner must devotesubstantial resources to litigation, the outcome of which is unclear. Putting the trademark owner to the task ofrecapturing its own property in such circumstances surely has a chilling effecton a company's desire to do business in that country.
On the enforcement side, our information is thatthe scale of intellectual property violations in countries of the former SovietUnion, in the form of counterfeit products and other trademark violations, isenormous. A leading internationalcosmetics and health care products company, for example, estimates that up to90 percent of its products in retail outlets in various countries of thisregion are fake. There are many othersuch examples.
With this in mind, the founders of the Coalitionhave developed a list of what trademark owners see as the principal requisitesof meaningful trademark protection and enforcement:
First,no trademark enforcement system will work unless brand owners themselves arewilling to protect their trademarks, trade dress and other valuableintellectual property. This isespecially true for famous trademarks, which are often registered by partiesother than the rightful owner. Thoughmuch progress has been made against the problem of piratical registrations, itis a continuing concern, especially for pirated marks registered before suchrecent developments as the TRIPS Agreement.
Borderenforcement is also a critical element of a successful enforcement regime, thatis, keeping counterfeits and infringements out of the country and preventingexport of such goods. Meaningfulcustoms enforcement – the brand owner's first line of defense – is mosteffective when accompanied by open communication and cooperation betweencustoms and the trademark owner, so that sources and distribution channels maybe identified.
Aneffective trademark enforcement regime must also include the ability, by or onbehalf of the brand owner, to seize counterfeit or infringing goods which haveentered the country or were manufactured there, wherever they are found – inretail stores, warehouses or factories.The means may be administrative, civil or criminal. There are many different systems forachieving this goal. But the successfulsystems have in common a number of important elements: swift action, ex parte seizures, lack ofonerous monetary security requirements that tie up significant capital duringpending legal actions.
Thereshould be a secure mechanism for ensuring that the seized goods remain incustody. Simply leaving goods at thelocation found under guard or seal is not effective, since the goods tend todisappear from such locations.
Itis necessary to have a functioning, independent, judicial system, with clearlyspecified procedures that provide a certain measure of procedural fairness, andwhich functions efficiently and quickly, free of corruption.
Theneed for injunctive relief, both during pending legal actions and at theirconclusion, is very important to prevent future counterfeiting or infringement,and to allow trademark owners to act more efficiently upon acts of recidivism.
Meaningfuldeterrence to ensure against future counterfeiting includes both significantcriminal sanctions and substantial criminal and/or civil fines andpenalties. Without these, theoccasional loss of goods through seizure becomes nothing more than thecounterfeiter's cost of doing business.
Penalties should include monetary damages and other forms of restitutionto the brand owner as compensation for its injuries. Counterfeiting and infringement can result in significantfinancial losses to a company, especially when a market becomes flooded withcounterfeit goods. The cost ofenforcement can also be extremely high. For a large company with a well-known brand, the cost can be millions ofdollars per year. This adverselyaffects not only the brand owner, but, ultimately, the consumer.
Long-terminitiatives are needed to bring about the cultural and societal changesrequired to result in a sense of respect for intellectual property. Such awareness would help to stopintellectual property violations before they start. Such change is needed not only to benefit foreign brand owners;rather, providing intellectual property protection and enforcement is criticalto stimulate the growth of local industries and economies through foreigninvestment.
In summary, while TRIPS has brought about manypositive developments in the ability of trademark owners to enforce their rights,it is truly just a starting point. Weencourage nations to go beyond the minimal requirements of TRIPS to protecttrademark owners.
Having said all that, it is clear that the RussianFederation, as well as other of the independent countries formerly part of theSoviet Union, have worked hard to develop, and have enacted, many new lawswhich incorporate much of the above wish list. Surely the Russian Federation government, for example, and its privatebar, have been very active in this area in recent years, and haveaccumulated a certain experience inthese areas. This is true as well, invarying degrees, of other of the countries formerly part of the Soviet Union,which have undertaken active legislative and other initiatives.
It is also clear that you look to each other, aswell as to your colleagues abroad, for models, guidance and sharing ofideas. The progress and development inintellectual property, in this region, over the past several years surelydemonstrate an interest by you and your colleagues in addressing the concernswe raise here. What we hope to do, as aCoalition, is work with you to make the job of activating and enforcing thoselaws easier for you and for the governments you serve and with which you work,by forging partnership, mutual dialogue and assistance, among business,trademark lawyers and agents, and government. CIPR will surely add a significant means towards achieving thisend. You ask, how? And I suggest the following.
During my career, one of the most importantlessons I have learned is that effective law enforcement in intellectualproperty requires cooperation between government, business and the intellectualproperty community, including private practitioners and attorneys. You, as leaders and members of patent andtrademark offices, members of the judiciary and other intellectual propertytribunals, agents and attorneys surely face many new challenges in yourwork. You are therefore in the uniqueposition of creating and interpreting new laws, applying them to newsituations, and, thus, in effect, forging important building blocks for yourcountries' economic future.
And it is at this unique time – and to address thevery issues you face in your daily professional lives -- that a select group ofmajor international companies, concerned with the protection and enforcement ofintellectual property rights in the countries of the former Soviet Union, haschosen to form CIPR – the Coalition for Intellectual Property Rights. The major mission and objectives of CIPR areas follows:
First – and most important – we wish toprovide mechanisms for relationship-building and two-way communications betweenbusiness and governmental authoritiesand decision-makers.
We wish also to assist in establishingtransparent and non-discriminatory intellectual property regimes in compliancewith World Trade Organization requirements.
In addition, the Coalition will serve asan active facilitator between government decision-makers and members of thelocal and international business and practicing communities to implementeffective trademark protection, anti-counterfeiting and trademark enforcementefforts, strategies and education.
The Coalition works with internationalfinancial and donor organizations, such as the World Bank, with a view tosecuring technical assistance in the area of IP training for practitioners, thejudiciary and other specialists.
The Coalition will work to ensure aneffective and timely exchange of up-to-date information on intellectualproperty related issues, on legal, legislative, regulatory and politicaldevelopments in the countries of the former Soviet Union.
CIPR will conduct research and analysisand prepare and distribute public statements, position papers and otherdocuments on important issues of intellectual property protection; and
We will continue to develop workingrelationships with and coordinate activities with key internationalorganizations such as WIPO and UN/ECE, other international and regionalintellectual property and business associations, foreign investment councils,and international donor and technical assistance providers. In this regard, CIPR recently received theenthusiastic endorsement of the US-Russia Business Council whose Board ofDirectors includes, among others, representatives of Continental Grain Company,Honeywell Inc, The Coca-Cola Company, R. J. Reynolds International, Delta AirLines, General Motors, Philip Morris International, Citibank, Mobil OilCorporation, Xerox Corporation, General Electric Company and Pepsi-ColaCompany.
We are surely aware that there are a number oforganizations, both governmental and non-governmental, professional andbusiness, such as UN/ECE, INTA and WIPO, which have undertaken initiativesintended to advance the goals stated above. Each one of these organizations surely has a contribution to maketowards that end. And each has a uniquerole. At the same time, from myperspective, there cannot be too many partnerships forged or alliances made atthis important quickly changing juncture in the development of the laws andeconomies in this region. The companiesthat have joined together in the Coalition for Intellectual Property rightshave current and active needs to be addressed, and a desire to clear the way,in the short term, for more active investment in the region. And, along with you, we look forward toworking towards that important end.
Thank you for your attention, I would be glad to address your questionseither now, or during the break.
