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JOINING FORCES TO COMBAT PIRACY

I. THE COMMON THREAT POSED BY PIRACY

What is piracy? Piracy constitutes the deliberate and wilful infringement of industrial property rights on a commercial or criminal basis, that is on a massive scale with the intention of making a profit. Whereas "trademark piracy" or "counterfeiting" refers to the deliber-ate use of the trademark, name, trade name or the packaging and presentation of a third party's products, "piracy" does not necessarily entail the infringement of a legally protected designation, but also includes the infringement of protection enforceable under unfair competition rules, such as protection against slavish imitations. Piracy poses a serious threat to industry and consumers. The International Chamber of Commerce estimates that pirated goods account for 10% of world trade, causing economic damage to business of around $ 600 billion per year. Sales markets that are in the process of being built up in Eastern Europe and Asia are being jeopardised or lost, causing a dramatic drop in the original manufacturer's volume of trade. Pi-rated goods, which are in principle of poor quality, may bring irreparable damage to a business' reputation when consumers buying supposedly branded goods cheaply are deceived with regard to the expected quality the brand normally provides. Further, piracy has a negative impact on society as a whole, since it contravenes a wide range of national and European regulations relating to public health, consumer protection and product liability. Moreover, it affects industrial competitiveness, inno-vation and employment in individual countries. The German Federal Ministry of Jus-tice estimates that 50,000 jobs are lost in Germany alone as a result of piracy. For the EU, it is estimated that about 300,000 jobs are lost. It is further generally as-sumed that the profits made by sales of pirated goods directly contribute to financing organised crime. Piracy: an international problem In addition to the "piracy industry", which up to now has been dominated by Asian countries, a well-organised production and distribution network for pirated goods has developed in Europe. Turkey, Poland, the Czech Republic and Hungary can now be considered centres of the "piracy industry". At large markets in Central Europe and Turkey, hundreds of thousands of fakes are sold daily to tourists and professional hoarders who buy up pirate goods in order to resell them through a highly organised distribution network in member countries of the EU. The need for concerted action Experience shows that plagiarists rarely concentrate on the manufacture and distribu-tion of the products of only one enterprise in a certain line of business. Rather, they manufacture large numbers of various trademarked articles to be sold through their distribution network. It is vital that action be stepped up, as it has become clear that the seizure of goods destined to be sold or transported to 'receiving' countries acts as a warning signal to the manufacturers of pirated goods in the 'producing' countries. Rather than relying on national governments or the EU to tackle the problem of inter-national, organised piracy crime alone, industry must aim at complementing the ef-forts of authorities by taking concerted action of its own. In the opinion of the German Anti-Piracy Association, this also means working with other affected firms as well as with subsidiaries and licence holders. The joining of forces to combat piracy will make co-operation effective and efficient by improving the co-ordination of measures taken, as well as the ability to exchange data on pirates and 'piracy centres' and make use of existing sources of information; defensive action thus becomes more productive and successful. Lastly, the Association believes that such actions cannot and should not be separated from efforts contributing to the establishment of an effective legal structure in which Intellectual Property Rights (IPRs) can be properly protected and enforced. For these reasons, the Association represents the interests of its members before national governments and the EU, with the aim of achieving a legal framework in which IPRs can be protected and enforced effectively. In order to facilitate such concerted action and establish an effective pressure group, leading business enterprises took the first step by joining together in April 1995 to form the association Vereinigung zur Bekaempfung von Produktpiraterie (VPB), the German Anti-Piracy Association.

II. THE GERMAN ANTI-PIRACY ASSOCIATION

Objectives The aim of the Anti-Piracy Association is to further the commercial interests of its members and in particular: strengthen their industrial property rights, combat piracy, create new and improve standing legal protection to prevent the unauthorized copy-ing of commercial and creative achievements and products, promote national and international legal relations and connections with other anti-piracy associations in Germany and abroad, inform and advise members with regard to the above, represent the interests of its members before the German Federal Government and the EU. The Association does not aim at pursuing commercial interests or making a profit. Structure The Association consists of two bodies, the Annual General Meeting and the Com-mittee. The Committee acts as a working group co-ordinating the Association's activi-ties and deciding on applications for membership. At the Annual General Meeting, more general resolutions concerning the affairs of the Association are passed. Actions & Achievements The German Anti-Piracy Association carries out operations against pirates in Ger-many, and also plans and co-ordinates additional campaigns abroad. Apart from these action-focused activities, the Association represents the interests of its mem-bers through high level contacts with the German local authorities, the German fed-eral government as well as with key decision-makers within the EU institutions. The Association has been recognised as the contact point for information by customs and local authorities alike. Domestic operations The Association's role in action taken against pirates in Germany is to advise its members on optimising the seizure of pirated goods at the borders and at outlets in the country, as well as on the prosecution of infringers. More specifically, the Asso-ciation's role can be defined as: recommending and co-ordinating external support such as detective agencies and lawyers, acting as intermediary between customs and members, in particular with regard to: filing applications for the seizure of goods at the borders on behalf of its members, advising members on the preparation of checklists for customs, organising training courses for customs authorities throughout Germany, on how to proceed when faced with pirated goods and how to differentiate be-tween genuine brands and fakes, maintaining contact with local and federal authorities as well as with the police, util-ising their information - providing data on 'piracy centres'. Operations abroad In addition to domestic action, the Association aims at tackling the root of the problem by raiding illegal manufacturing plants and outlets in the countries where the pirated goods originate. Whereas, in recent years, action taken by German or international business enterprises has remained isolated for lack of know how or due to excessive costs, the Association aims at facilitating operations to cut costs and fight piracy ef-fectively in the countries of origin by employing experienced investigators in problem countries with the aim of locating factories and outlets for pirated goods, establishing contact with suitable lawyers with experience in the field of piracy providing detailed information on the legal situation, developing an early warning system of information for affected members in the case of reasonable suspicion of an offence, in order to arrange the necessary searches and confiscations, as well as the institution of civil and criminal proceedings through selected lawyers, planning and supervising raids with local authorities. Costs arising from initial investigations and inquiries, the engaging of lawyers and investigators, and the analysis of information are to be borne by the Association; those costs incurred by raids and any further actions are to be borne by the members concerned. In recent years action was successfully taken against piracy outlets and illegal facto-ries in Turkey, at which numerous pirated items were seized and destroyed. The As-sociation has further established a network of contacts in countries such as the Czech Republic, Hungary and Poland with the aim of taking action in the near future, similar to the action taken in Turkey.

III. THE CHALLENGES AHEAD

Development of a safety mechanism Differentiating between forgeries and original products has proved to be a great prob-lem for customs, police authorities and even for businesses themselves. In order to facilitate effective action against piracy, the Association will be responsible for choos-ing and developing a safety mechanism that makes the detection of imitations cost-effective, quick and reliable. For example, such a safety mechanism could take the form of electronic microchips that store information concerning the product. Any products discovered that have been brought into circulation without this mechanism could be classified as imitations with no difficulty. Improving customs authorities' ability to react Principal customs offices and customs investigation departments have welcomed the formation of the Association. By co-ordinating the efforts of individual companies fighting against piracy and by creating one single contact address, the Association has made the work of the customs authorities easier and more efficient. There still appears to be scope for improving the training of customs officers, in particular for recognising pirated goods. In order to maintain the successful co-operation with pub-lic authorities, the Association will continue to hold training sessions . Creating public awareness As well as making customs and police officers more aware of the piracy problem, it is vital that the general public be well informed and aware of the work of the Association and the problems it faces. It must be made public that the illegal copying of trade-marked goods is in fact a crime and that purchasing fakes contributes to the financing of organised crime. The poor quality and safety standards of pirated goods must be further highlighted, in order to increase public awareness and make it clear that cheap fakes can never be 'value for money'. Efficient political representation Apart from maintaining contacts with German local authorities and the federal gov-ernment, the German Anti-Piracy Association represents the interests of its members before the EU institutions. The Association seeks to achieve the establishment of a harmonised legal framework optimising the protection of IPRs in the EU, to encour-age uniform guidelines to improve customs controls at the EU's external borders, and to encourage IPR protection and enforcement at an international level. The Associa-tion is in regular contact with the members states' permanent representatives in the EU and the Director Generals of the European Commission dealing with customs policy, the single market and external affairs. Further, contacts with members of the European Parliament are being expanded.

IV. MEMBERSHIP OF THE GERMAN ANTI-PIRACY ASSOCIATION

Membership fees The activities of the Association are financed by admission fees and subscriptions of the members. The admission fee is € 500 and the annual membership fee is € 3000. Membership becomes effective immediately after the admission fee and the first sub-scription have been paid. Membership of the Association is not restricted to any par-ticular industrial sector. Benefits Within the framework of the Association, all measures such as investigations at home and abroad, searches and seizure of goods, and proceedings under civil and criminal law, have so far been carried out jointly and simultaneously for the affected busi-nesses in the relevant sectors, resulting in low cost and effective actions. The benefits of joining the Association can be summarised as such: considerable savings due to joint operations to combat piracy, especially as regards seizure of pirated goods at the German borders and abroad, the use of a centralised data pool and data transmission systems joint representation of interests at a political level, both in Germany and the EU.

V. MORE INFORMATION

The German Anti-Piracy-Association Dr. Volker Spitz Rückertstraße 1 D-80336 Munich/Germany Phone: +49 89 599 185 30 Fax: +49 89 599 185 33 eMail: info@vbp.org