Intellectual property rights high on Baltic agenda

  • 2000-11-02
  • Ilze Arklina
RIGA - Latvian, Lithuanian and Estonian senior government officials, judges and intellectual property specialists gathered in Riga last week to meet European and U.S. government officials and business executives from world renown companies to develop joint strategies in fighting trademark violations, patent infringements and counterfeits in the Baltic states.

The Baltic Region Seminar on Intellectual Property Protection and Enforcement, sponsored by the Coalition for Intellectual Property Rights, the Latvian Patent and Trademark Office and the Patent Bureau of Lithuania, was held on Oct. 25-26 at Riga's Latvian Society House.

The seminar focused on the growing problem in the Baltic states of counterfeits, trademark violations and patent infringements, which have costly financial and other consequences for consumers, governments and businesses.

In addition to financial losses to business and government from the violation of intellectual property rights, consumer health and safety are put at risk, as shoppers unknowingly buy potentially hazardous counterfeit products.

CIPR has been in business for almost two years, and its focus is strictly on former Soviet countries, CIPR Vice President Tom Thomson said at a press conference Oct. 24.

"The concept of intellectual property is new in this region since the breakdown of the Soviet Union," he said.

The Baltics with only 8 million people are not high on CIPR's agenda. Russia and Ukraine have much more to worry about.

"Coming here is not a crisis management operation," said Mary Ann Alford, the chair of CIPR's executive policy committee. "The Baltic states are in a different position than the former Soviet Union countries. The issues are different from other countries where we fight for some basic laws to be adopted. The focus is different."

"We see the Baltic states as a litmus test for the former Soviet Union countries, because they will enter the EU and apply international standards," said Eugene Arievich, a partner at Baker&McKenzie.

Losses caused by counterfeiting on the Russian market amount to approximately $1 billion a year, according to a survey of 135 major international companies operating in Russia which was conducted at the beginning of 2000. Findings obtained demonstrate that, the way most Western companies see it, a counterfeit industry does not only contribute to the abuse of international brand holder's rights but also runs counter to the Russian government's efforts to attract foreign investment.

In addition, it contributes to foregone profits of privately owned companies ($5 million to $50 million annually) and budget arrears (estimated at a few hundred thousand U.S. dollars).

"What we see is the tip of the iceberg," Alford stressed.

The CIPR's representatives could not estimate the losses intellectual property rights violations were inflicting on Baltic companies. "We are in the process of launching a survey in the Baltic states to get an idea of what are the issues related to intellectual property and how much it costs business and government," Thomson noted.

For the first time this year, Latvia and Lithuania were placed on the United States Trade Representative's Special 301 Watch List for failing to provide adequate intellectual property rights protection, Thomson noted.

Placement on the watch list is the first step in a process that could ultimately lead to retaliatory trade sanctions by the United States. Under section 301 of U.S. trade law, a U.S. trade representative is required to report to the U.S. Congress each year and identify those countries that do not adequately protect the rights of intellectual property holders.

Thirty-nine countries were placed on the watch list in May 2000, with Latvia, Lithuania and Kazakhstan appearing for the first time. Ukraine and Russia were placed on the priority watch list, meaning that their policies and practices need "active work" for resolution and close monitoring.

"Laws in the Baltic states are very good, they meet international standards. The central issue is enforcement," Thomson stressed. "Laws alone do not make an effective intellectual property rights regime. It is not enough that a country's laws comply with international obligations and standards," Alford said.

"Judges often look at cases as a dispute between a local company and a foreign country. It misleads the judges," said Alexander Shelemekh, CIPR vice president. "The rule of law should be uppermost. There are many ways to support local producers, but we can't support them with judicial systems violating internationally accepted standards."

"CIPR's founding principle is public-private partnerships," said Alford. "Private sector and government leaders that are working together, not occasionally, but daily, to advance intellectual property rights in the Baltic countries, the CIS nations and throughout the former Soviet Union." CIPR's lawyers and public affairs professionals work throughout the Baltic region and countries of the former Soviet Union from offices in Riga, Tallinn, Vilnius, Moscow, Kiev, Almaty and Chisinau. CIPR also has offices in Washington D.C. and London, which focus on generating support for intellectual property rights reform in the region.