Unofficial translation

Source: Finansovaya Nedelya (view picture of original in Russian) p.16
Date: February 28, 2000
Title: Intellectual Property May Become a Weapon against Corruption
By Marina Sokolovskaya

Total losses incurred by foreign businessmen and the Russian government due to violations of intellectual property rights amount to $1 billion per annum. This was established as a result of an opinion survey of 50 international companies operating in Russia administered by Coalition for Intellectual Property Rights (CIPR) jointly with American Chamber of Commerce and European Business Club. Respondents included many well-known companies, namely Kodak, Microsoft, General Electric, Coca-Cola, Philip Morris. Businessmen agreed that violation of intellectual property rights is the major challenge hampering business operations in this country.

According to CIPR President Peter Necarsulmer, IPR violations, including trademark/copyright piracy and counterfeiting forestall new investment and impede Russia’s efforts to join the World Trade Organization (WTO). Besides, IPR violations pose health hazards as customers purchase counterfeit foods, pharmaceuticals and other goods.

However, respondents assume that the Russian government underscores the problem and does not regard it as a priority. Government officials see no relationship between IPR irregularities and economic growth. Foreign businessmen are least happy with inadequate legislation and ineffectiveness of the already existent laws. Sales losses made foreign businessmen fight with intellectual property piracy on their own. Thus, last year 20% of respondents conducted checks of markets and warehouses to detect counterfeit goods; 14% carried out such arrangements in cooperation with government enforcement authorities.

Russian Trademark and Patent Agency (Rospatent) and the Ministry of Internal Affairs were the only two agencies evaluated above average. Activities of the central government in this area were unanimously assessed as unsatisfactory.

However, government officials view the above findings as an exaggeration. For instance, State Duma Deputy Adrian Puzanovskiy commenting on the survey findings did not agree with the negative assessment of government actions. He assumes the problem stems from the shortage of relevant expertise rather that lack of government support or corruption . According to Puzanovskiy, the situation may be significantly improved by re-introducing the practice of international study tours which existed in previous Duma .

Peter Necarsulmer assumes it is not the time for unhelpful finger-pointing. It’s necessary to find a way out of this situation as soon as possible and help Russia make intellectual property rights protection and enforcement a key element of the government anti-corruption program.

According to Scott Blackin, president of the American Chamber of Commerce, coordinated efforts of local/foreign stakeholders and the government may become a most effective tool in resolving IPR problems. A comprehensive course of actions should be developed to fight against infringers, from tightening the legislation to implementing an educational program for the population. International community should contribute to these efforts by delivering educational programs. These are expected to target judicial, customs employees, law-makers and other government officials.

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