WIPO Symposium
September 1, 1999
Chisinau, Moldova

Remarks by Mary Ann Alford,
Chairperson of the CIPR Executive Policy Committee and Assistant General Counsel for Intellectual Property ofUnited Distillers & Vintners, London

Good Afternoon.

I would like to offer my congratulations and best wishes toall citizens of the Republic of Moldova as they celebrate two national holidays– Independence Day and National Language Day. I am delighted to be in Chisinau during this holiday period and amenjoying my stay in this charming city.

I would also like to thank the World Intellectual PropertyOrganization for giving me the opportunity to address this symposium.

As Assistant General Counsel for Intellectual Property ofUnited Distillers & Vintners and a past president of the InternationalTrademark Association (INTA), I represent trademark owners and have done so formany years.  Thus, I was invited todiscuss with you today what private industry -- in particular, brand owners --need from governments regarding trademark protection.  I am also going to speak about the reasons why my company, UDV,is a founding sponsor of the recently formed Coalition for IntellectualProperty Rights (CIPR) -- an organization that represents a select group ofmajor international companies concerned with the protection and enforcement ofintellectual property rights in the countries of the former Soviet Union.

In general, the needs of brand owners are universal; they donot vary by country, by region or by industry. All trademark owners seek protection and enforcement of their trademarksaccording to international law and agreements. 

Often in discussions about intellectual property, the needsof trademark owners are undervalued or minimized.  As you know, however, failure to enforce trademark rights canhave a staggering economic impact.  Alack of protection or enforcement can lead not only to a loss of rights andinjury in the form of loss of sales or reputation to the trademark owner.  It can also lead to significant loss to thecountry and its economy through the loss of jobs and government revenues fromtaxes and customs duties.  Moreover,failure to protect trademarks can result in lost foreign investments.

As you know, the scale of IPR violations in countries of theformer Soviet Union, in the form of counterfeit products and other trademarkviolations, is enormous.  For example,Procter & Gamble, a leading international cosmetics and health careproducts company, estimates that up to 90 percent of its products in retailoutlets in various countries of the former Soviet Union are fake.  The world’s leading tobacco manufacturer,Phillip Morris, estimates that a significant percentage of the cigarettes inthe marketplace of the Former Soviet Union are illegally produced and imported,packaged in nearly identical wrappers and sold to unsuspecting consumers as thegenuine item.  This is, unfortunately,only a small example of a costly problem affecting nearly every goods and serviceindustry.

With that in mind, the following is my list of whattrademark owners need from governments for meaningful trademark enforcement.

As the underpinning for all enforcement, brand ownersobviously need to protect their trademarks, trade dress and other indicationsof source or origin.  This is especiallytrue for famous trademarks, since trademark piracy problems still remain, thatis, registration of a mark by someone other than its rightful owner.  Significant progress has definitely beenmade against this problem, but it is a continuing concern, especially forpirated marks registered before such recent developments as the TRIPSAgreement.

Border enforcement is also a critical element of asuccessful enforcement regime – that is, keeping counterfeits and infringementsout of the country or preventing export if manufactured there.  Meaningful customs enforcement is a brandowner's first line of defense.  Borderenforcement is also most effective when accompanied by open communication andcooperation with the trademark owner, which allows for identification ofsources and distribution channels for the counterfeit goods.  With this additional information, thecounterfeiting can ultimately be stopped.

An effective trademark enforcement regime must also includethe ability, by or on behalf of the brand owner, to seize counterfeit orinfringing goods which have entered the country or were manufactured there,whether found at retail, in warehouses or factories.  The means for this may vary by country.  They may be administrative, civil or criminal.  Many different systems exist and I find thata number of them work well.  Thesuccessful systems have in common, however, a number of important elements:  swift action, ex parteseizures, and a lack of onerous security requirements that tie up significantcapital during pending legal actions.

The means or mechanisms to ensure that seized goods stayseized.  Often times, leaving goods atthe location found under guard or seal is not effective, since the goods have ahabit of disappearing.

The need for a functioning judicial system.  Such a system is one which has clearlyspecified procedures that provide a certain measure of procedural fairness;functions efficiently and swiftly, as necessary; and, most important, is asystem free of corruption and receptivity to undue influence.  I regret to say that, in my experience, thelatter problems still exist, especially in systems where ex partecontacts are allowed.

Self-initiated enforcement by governments to clean upmarkets and to stop local manufacturing of counterfeits, rather than relyingexclusively on the actions of private parties. Even for plaintiffs with highly developed enforcement programs andsignificant resources, counterfeiting is still like an iceberg -- we can seeonly the tip.  While I acknowledge thatgovernments worldwide have limited resources, which sometimes makes independentinvestigations impractical, governments must minimally provide customs andother administrative authorities the jurisdiction and power to seize goods thatthey know are counterfeit.

The need for some form of injunctive relief, both duringpending legal action and at its conclusion, is very important in order toprevent future counterfeiting or infringement, and to allow trademark owners toact more efficiently upon acts of recidivism.

Meaningful deterrence to ensure against futurecounterfeiting.  This includes bothsignificant criminal sanctions and substantial criminal and/or civil fines andpenalties.  Without these, theoccasional loss of goods through seizure becomes nothing more than a cost ofdoing business.

Monetary damages and other forms of restitution to the brandowner as compensation for its injuries. Counterfeiting can result in significant financial losses to a company,especially when a market becomes flooded with counterfeit goods.  In addition, the cost of enforcement can beextremely high.  For a large companywith a well-known brand, the cost can be millions of dollars per year.

Long-term initiatives to bring about the cultural changesnecessary to lead to a sense of respect for intellectual property --essentially to stop counterfeiting before it ever starts.  This cultural change is necessary not onlyfor the benefit of foreign brand owners. Governments should understand that providing intellectual propertyprotection and enforcement is critical to stimulate the growth of localindustries and economies through foreign investment.

In summary, while TRIPS has brought about many positivedevelopments in the ability of trademark owners to enforce their rights, it istruly just a starting point.  Iencourage nations to go beyond the minimal requirements of TRIPS to protectbrand owners.

That brings me to the reasons why I agreed to become theChairperson of the Coalition for Intellectual Property Rights and my company,United Distillers & Vintners, decided to become a founding sponsor of thecoalition.

During my career, I have had significant experience intrademark enforcement, formerly running a worldwide trademark enforcementprogram for Reebok International, and now for UDV.  One of the key lessons learned from this experience is theimportance of cooperation between government, business and the IPR community,on both the national and international levels, to enforce IP laws effectively.

As directors general of patent and trademark offices inEastern Europe and the former Soviet Union, you are faced with several majorchallenges to enforcing IP laws and implementing legislation and regulations.

The Coalition for Intellectual Property Rights, or CIPR, isa recently formed organization representing a select group of majorinternational companies concerned with the protection and enforcement ofintellectual property rights in the countries of the former Soviet Union.  The Coalition will focus on fundamentalissues of industrial property protection – especially trademarks -- includinglegislative initiatives, legal, judicial and regulatory reform and adherence bythe governments in the region to international conventions and treaties.

CIPR and its members are aware of these challenges inherentin these issues and seek to achieve a win-win situation for both public andprivate stakeholders in intellectual property protection.  To that end, CIPR will provide support toinitiatives by government officials, executive agencies and members ofparliament in CIS countries committed to intellectual property reform andactively work to protect the intellectual property rights of its members inthese nations.

CIPR’s major mission and objectives are:

We all have an important role to play in protectingtrademarks.  I, along with othercorporate founding members, such as Philip Morris, believe that engagement anddialogue between organizations, such as WIPO and CIPR, will be extremelybeneficial to achieving our common goals -- strong intellectual property rightsregimes and effective enforcement mechanisms in the former Soviet Union thatare consistent with international standards. 

Thank you for your attention.  I will be glad to answer any questions.