THEME I: THE CHALLENGE OF PIRACY AND COUNTERFEITING
The terms piracy and counterfeiting describe forms of business activity which have grown in scale, reach and sophistication in line with the rapid development of world trade.
Most countries have legislation providing for private property rights such as copyrights and trade marks which may, in principle, be enforced by their owners. Many countries have also provided for criminal and administrative penalties for the protection of consumers and the proprietors of intellectual property rights. In developed countries, including many of the more developed economies of Asia, intellectual property rights and remedies have been in place for many years. And yet, both individually and collectively, those countries have so far failed to meet the challenge that pirates and counterfeiters continue to represent to legitimate trade as well as social order and development.
Pirate music, videos and computer software and counterfeit products of all kinds can be readily found in New York, London, Tokyo, indeed in any one of the capital cities of the most developed and powerful economies of the world. When presented with the problem, the common response is to blame the lack of effective measures to control piracy and counterfeiting in developing countries, particularly those of the Asian region.
At a recent conference in the USA, a representative of the US Justice Department stated that more than 80% of pirated and counterfeit products sold in the US originated from overseas. The clear inference was that such products were a disease of foreign origin that the US Government could not be expected to contain or prevent. In reality, of course, it is businessmen operating in the US who have arranged for the importation of such pirate and counterfeit products which they know they will be able to sell, with relatively little hindrance, to voracious consumers in the single richest market in the world. The reason there is not more domestic manufacture of pirate and counterfeit goods in the United States is not the lack of skills or investment, but rather the price of labour and other manufacturing costs.
The advent of TRIPs has brought about a resurgence of interest in the business of piracy and counterfeiting. There is now a perfect opportunity to readdress the challenge of piracy and counterfeiting. National governments, and in particular those which have joined or are soon to join the WTO, owe it to themselves to make the most of the opportunity presented by the level of collective awareness and attention that is being focused on this issue. It is time to take a fresh approach to dealing with piracy and counterfeiting.
INTELLECTUAL PROPERTY ASSET MANAGEMENT
The world's leading corporations, and those determined to succeed in highly competitive global markets, are experiencing a renaissance or resurgence of interest in the strategic management of their Intellectual Capital and their Intellectual Property Assets. The term Intellectual Capital refers to the corporation's employees and the product of their creativity, innovation and work effort, which in turn generate the intellectual property assets they use in the course of the corporation's business activities. In the majority of corporations and businesses, however, the management of Intellectual Capital and the exploitation and enforcement of IPRs are ignored or at best pushed out to the margins of the business. The same is regrettably true of many countries.
The parallel between the 'old' corporate approach, and that of national governments is compelling. No developed country, even the USA, has shown any sign of having undertaken a comprehensive review of its national intellectual property asset management strategy. Where governments have seen fit to respond to the constant pleas for help from industry, what invariably results are little more than cosmetic legislative changes with little or no resources to back them up. Strong words perhaps, and of course industry is always grateful for improvement however small. Nevertheless, an erratic and apparently unplanned and uncoordinated approach which fails to keep pace with the rapid changes taking place in global commerce cannot serve to improve any individual nation's prosperity nor its competitive position in global markets.
My experience of dealing with enforcement of intellectual property rights and the examination of local enforcement infrastructures in more than 30 countries, ranging from developed to emerging markets, is that all have a number of characteristics in common. These are: lack of information; lack of education; poor management of resources among responsible enforcement agencies; and the absence of a working partnership with the private sector.
The answer is not necessarily more resources, though unquestionably there is no country I know of that would not benefit from greater resources to combat piracy and counterfeiting or indeed to deal with any aspect of the protection and enforcement of IPRs. What a business has to learn in order to survive and compete is to make the very best use of the resources that it has; surely, the same must apply to national government. Intellectual property assets are as critical to the success of a nation as they are to the success of the business. Even the least developed countries of the world must surely plan for the day when their economies are not dependent upon natural resources, agricultural or cheap labour to generate the wealth necessary to provide a secure and prosperous future for their nation.
HOLISTIC APPROACH TO THE CHALLENGE OF PIRACY AND COUNTERFEITING
When I am assisting clients to combat piracy and counterfeiting I advise them to take a holistic approach, so the processes of enforcement are treated as a necessary component of the corporation's overall intellectual property asset management process. In practice, the enforcement process is not, and should not, be separated from all those other activities which require resources, both internal and external to the company, to ensure the proper recognition, recordal, registration, exploitation and enforcement of the corporation's intellectual property.
Essential to achieving this holistic objective is that everyone involved in the process is aware of the importance of intellectual properties and of the care and attention that must be given to them. In order to generate this awareness within a company, its leadership (the Board of Directors) must establish and communicate a clear policy. That policy must then be translated into a strategic plan to which appropriate human and financial resources must then be applied to ensure successful implementation of that plan. Finally, processes to ensure the policy is observed, that the strategic plan is implemented, and that best use is made of applied resources must be integrated into every part of the corporation's day to day operations. The key steps therefore are policy, strategy, resource and integration.
This leads me to my principal proposition which is that national governments should treat the challenge of piracy and counterfeiting as an issue central to their nation's future prosperity. A holistic approach to IPR Asset management and the enforcement of IPRs is the best means of addressing this challenge. Such an approach is essential if prosperity is to be derived, if only in part, from the development of a nation's intellectual capital and exploitation of intellectual property.
ZERO TOLERANCE
The term 'zero tolerance' is one that I believe was coined in the USA and has since been used, and abused, in the UK in the context of crime. I recommend it as a term that describes the level of commitment and aspiration for any nation that is determined to meet the challenge of piracy and counterfeiting. In the context of IPR enforcement, the term suggests to me an unequivocal and rigorous enforcement policy that leaves no doubt in the minds of enforcement authorities and public alike that dealing with piracy and counterfeiting is a national priority.
Zero tolerance demands decisive and deterrent action against the retailing of infringing products. This means cracking down on street vendors, open markets, and all those other forms of distribution and retail which are commonly considered to be too transient or simply too difficult to deal with. The fact that such markets continue to flourish and apparently to be tolerated by government sends an entirely negative message to the general public, to industry (both domestic and foreign) and to trading partners. No amount of legislation for the protection of intellectual property can possibly mask or counteract the negative impact of such blatant disregard for intellectual property rights and the legitimate business interests of the owners of such rights.
Common sense dictates that if one wishes to raise awareness of intellectual property so as to encourage investment of intellectual as well as financial capital in creativity and innovation, one must be seen to be dealing effectively and efficiently with the most obvious and direct forms of infringement.
There is a golden opportunity for governments that wish to promote the importance of intellectual property rights among their own peoples and industries to adopt and demonstrate zero tolerance towards piracy and counterfeiting.
The content of this article is to provide only a general information on the subject. Legal advice should be sought for any specific circumstances.
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