April 25, 2003 By , Page 4

A National-Scale Barrier for Pirates

26th April is the international Day of Intellectual Property. Still, our country has little to be proud of about its protection. Only slightly over a year is left until Latvia's accession to the EU. And this is the last opportunity to coordinate the efforts of all relevant public authorities and the private sector in the protection of intellectual property. Only that would allow us to avoid the application of strict sanctions by the European Union.

Romans BAUMANIS, representative of the Coalition for
Intellectual Property Rights (CIPR) in the Baltic States

Under the Threat of Sanctions

What is characteristic for the intellectual property situation in Latvia? Very slow development in the area of its protection. And this is very dangerous. If this situation is not radically changed, the insufficient control by the state in preventing distribution of counterfeit goods could cost us. By 2 May 2004 the borders of Latvia will become the external EU customs borders, while the organized crime groups, producing and selling counterfeit goods within the Union, are just looking for a weak spot to facilitate their activities. That means they are interested in countries with more lenient legislation or ineffectual enforcement practices. And Latvia has the chance of becoming an object of their increased attention.

Customs Is Still Limping

We have to acknowledge that customs, which should be the first barrier preventing the distribution of illegal products, has not yet reached the necessary professional level. Much remains to be done to improve control over the flow of counterfeit goods, to provide special training for staff, etc. One other significant drawback is that we do not utilize what we have. The following example illustrates the point.

Latvian Customs has a special form to be filled in when a counterfeit product is found. It was drafted last year and corresponds to all international requirements. The form was sent to the posts to acquaint the officers with it, and in March of this year the form was distributed officially. But no reaction followed; nobody fills in these forms.

Lack of Coordination

The biggest weakness is lack of coordination between different interested units. There is no unified database; it is very difficult to obtain information about the actual scope of pirated products and information about their detection.

A "Strategy for Development and Protection of the Intellectual Property Area" was adopted in this country in 2001. It provided for the creation of a kind of supervisory mechanism. But it is now already April 2003, and nothing can be heard about its implementation. The last resolution of the Government in this regard is a year old (6 May 2002). It was decided then "to adjust the approach and the questions related to this subject".

In our opinion, such a supervisory mechanism is exactly what could coordinate different units in one way or another participating in the protection of intellectual property rights.

Dialogue Has Started

On 11th April, CIPR organized a roundtable, to which we invited representatives of Customs, the Economic Police, the Prosecutor's Office, the Patent Office, the Ministry of Culture and others. It aimed at launching a dialogue between different governmental agencies and holders of intellectual property rights. Such cooperation is advantageous in itself. The European Union is also stressing the need to develop interaction between state and private organizations. As a result, we came to the creation of a so-called Urgent Action Plan. Yesterday these proposals were handed over to the Ministry of Justice. What is their substance?

First of all, those amendments to the Criminal Law should be improved which provide for criminal liability of legal entities. Particularly, stricter punishments should be imposed for violations against the rights of intellectual property rights holders. This is one of the issues we will raise in the course of reviewing amendments to the legislation.

Importer Is Responsible for Everything

As regards individuals, the situation is often simply absurd. As a rule, it is difficult to prove before the court that a violator of intellectual property rights has acted on purpose. For example, the defendant may declare that: "I ordered footwear from China, but instead they brought me fake sports shoes Adidas. I did not expect that my partner could trick me that way!" And this is the end of the case.

How could this problem be solved? In many countries, for example, in Sweden or the Netherlands, the burden of proof in such cases is shifted to the defendant. Because it is not a big deal for a businessman to check what products they import and sell — whether they are authentic or not. The traders must know the origin of their goods! This is an international norm and we do not see a reason why it could not become the norm in Latvia.

Moreover, this approach would correspond to the spirit of the international TRIPS treaty. It provides as follows: punishment must be real and deterrent. As long as we have such judicial procedures, there is no deterrence. Just the other way round — the pirates develop a sense of impunity.

Under the Heel of the Database

Following are proposals of an administrative character. We must create a coordinating institution. It must be formed on the level of deputy state secretaries of all agencies involved in the protection of intellectual property rights. A unified database must be created and maintained at such institution, in which all information will be entered about copyright violations proceeding from customs as well as the police. And the database must be organized in a way that allows authorities to analyze and follow the trends of offences against the law.

In the Monitoring List

Certainly political will is required. International organizations are carefully following what is happening in Latvia in the context of intellectual property rights protection. The United States Trade Representative keeps a list, the so-called Special 301, which reflects the regimes of intellectual property protection in different countries of the world. The list is formed mostly on the basis of information from copyright holders and organizations specialized in copyright protection, though industrial property owners provide input as well.

This year, the International Intellectual Property Alliance (IIPA) recommended that Latvia stay on the monitoring list. Lithuania has fallen to even a lower level. It is deemed that in Lithuania, illegal discs with audio products and computer programs are not only distributed but also produced. And, of course, all these products go to Latvia and Estonia.

It's true — the problem of counterfeit goods is growing so rapidly that even the European Union was shocked recently when it reviewed customs information. During the last four years, the volume of counterfeit goods seized on the external borders of the EU has increased by 900%. The European Union has therefore developed and adopted a series of new strict directives to counter this problem. The radical measures of Europe will soon directly affect Latvia, too.

Align With Finland!

Latvia has a good example to follow. Finland, like our country, borders Russia. Only three years ago, the Finnish customs struggled to control the flows of counterfeit goods. But in 2002 Finland received the international prize for achievements in this area — the Global AntiCounterfeiting Award: Finns have increased the volume of seized counterfeit goods three times.

I do not see any reasons why Latvia could not achieve the same results. It requires political will and partnership with c intellectual property rights holders. They have information they know the trends and much more. However, private companies will cooperate with the Government only when they trust it. And trust comes when actions replace words. When the interests of intellectual property rights holders are protected in practice.