Date: Wed, 24 May 2006
Subject: Coalition for Intellectual Property Rights (CIPR) press release
From: Dominique Winther <dominique.winther@pbn.ru>
Please find attached CIPR's press release "6 in 10 Owners Say IP Protection in Russia Improved, Proposed Part Four of Civil Code Widely Feared".
We invite you to look at the full results of the survey at:
http://www.pbnco.com/public/files/CIPR_Survey_Report_English.pdf
(ENGLISH-LANGUAGE VERSION) or
http://www.pbnco.com/public/files/CIPR_Survey_Report_Russian.pdf
(RUSSIAN-LANGUAGE VERSION).
For more information or if you have any questions, please do not hesitate to contact us at + 7 495 775 00 77.
Kind regards,
Ms. Dominique Winther
CIPR Coordinator
Coalition for Intellectual Property Rights (CIPR)
3 Uspensky per., Building 4
Moscow, Russia 127006
Tel. 7-495-775-0077
Fax 7-495-775-0075
Dominique.winther@cipr.org
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FOR IMMEDIATE RELEASE
24 May 2006
6 in 10 Owners Say IP Protection in Russia Improved
Proposed Part Four of Civil Code Widely Feared
Counterfeits, Hijacking, Corruption & Lax Enforcement Top IP Owners' Concerns
MOSCOW, RUSSIA, 24 MAY 2006 ¬ The Coalition for Intellectual Property Rights' (CIPR) latest survey of international and Russian IP owners released today finds "a mixed bag of successes and failures in the Russian Government's efforts to improve protection and enforcement of trademarks, copyrights and patents," said Peter Necarsulmer, CIPR's Founder and President.
Sixty percent of some of the largest brand owners in Russia said the country's underlying intellectual property (IP) laws have improved in the past five years, while nearly 30 percent said things have stayed the same. Thirteen percent said IP conditions have worsened.
Counterfeiting has decreased according to 37% of those polled, while nearly 50% said counterfeits have increased over the past five years, and about one-in five observed no change.
Forty-two percent of owners said they "did not know" or "refused" to answer whether their own products are counterfeited. Of those who did respond, only 8% said their products are not counterfeited while 25% said 10% or more of their products are faked. A majority reported that less than 5% of their products are counterfeited. Survey respondents said 47% of counterfeits are manufactured primarily in Russia, while 41% cite China with the balance of illegal production attributed to Ukraine, Belarus and other countries.
The baseline CIPR survey of 102 rightsholders was conducted during the first quarter of 2006 prior to the recent announcement of the RF Presidential Administration's proposed new comprehensive IP law commonly known as Part Four of the Civil Code. During May 2006, CIPR polled an additional 81 companies and trade associations to secure their views of the Part Four proposal.
Seventy percent of respondents aware of the proposal were "negative" about the proposed changes while one-in-four were "positive." Two-thirds believe the proposal will reduce the effectiveness of IP enforcement in Russia and 50% said it will have a negative effect on their companies. A strong majority of 68% agreed with the statement, "it is of the utmost importance to strictly enforce existing legislation," rather than make changes to IP laws currently in force.
"Both Russian and international rightsholders are clearly saying that the Russian government should enforce existing laws rather than make extensive changes that could undermine the existing IP system and set back enforcement," said Necarsulmer. "Overall, they are satisfied with the legal basis of Russia's IP regime so now is not the time for major mid-course changes. Instead, the government and IP community should zero in on fighting counterfeiting, piracy and widespread IP rights abuse," he added.
The survey shows the most important IP issues for rightsholders in Russia are enforcing IP rights (66%), fighting counterfeiting and piracy (57%), and stopping bad faith trademark registrations (53%), also known as "trademark trolling and hijacking."
The cost of lax IP rights enforcement is significant according to respondents. Forty percent report that inadequate IP enforcement in Russia costs their companies $1,000,000 or more each year. About one-in-ten companies say their costs exceed $25,000,000 annually.
"These figures do not account for the enormous financial costs to the Russian government in lost tax and customs payments, nor the health risks to consumers when they purchase fake medicines, food products or auto parts," said Olga Barannikova, CIPR's Russia Representative and Senior Lobbyist. "Counterfeiting is a multi-billion dollar problem in Russia that has yet to be addressed effectively," she said.
More than 75% of IP owners call on the Russian government to enact requiring destruction of both counterfeit products and the equipment used to make them. Cleaning up corruption in law enforcement is the number one recommendation of rightsholders (85%). Other priorities of survey participants are increased joint enforcement actions by law enforcement authorities and IP owners, educating consumers and media about IPR issues, and training judges.
Survey respondents would also like to see new provisions for trademark registration opposition procedures and trademark registration checks prior to approval of new medicines by the Ministry of Health. Owners also support official recognition by Russia's IP authorities of the "first in time, first in right" principle for registered trademarks as well as other commonly accepted international standards of IP protection.
Few respondents said that IP protection is a priority of the Russian government. Even fewer said that government agencies responsible for IP protection and enforcement are effective. The Federal Anti-Monopoly Service, Supreme Patent Chamber and Federal Service for Intellectual Property, Patents and Trademarks (Rospatent) were rated as moderately effective, while Russian courts, Customs and the Ministry of Internal Affairs received the lowest ratings.
"Rightsholders expressed contrasting views on their own companies' effectiveness in upholding their IP rights. Most acknowledged that companies need to do a better job at cooperating with Government in the enforcement area," said Necarsulmer. Only 31 percent of the respondents rated "companies like yours" as effective in enforcing their IP rights.
Survey co-sponsors included the Foreign Investment Advisory Council (FIAC), U.S.-Russia Business Council (USRBC), Association of International Pharmaceutical Manufacturers (AIPM), Russo-British Chamber of Commerce (RBCC), Inter-Republic Confederation of Consumer Societies (KonfOP) and Union of Consumer Markets' Participants (SUPR).
The survey was conducted by The PBN Company, the leading international strategic communications firm with offices in Moscow, Kyiv, Almaty, Riga, London and Washington DC.
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The Coalition for Intellectual Property Rights (CIPR) is private-public partnership dedicated solely to advancing intellectual property rights protection and reform in Russia, the Baltic States and CIS countries. Through research, education, legislative initiatives, coalition building and legal, judicial and regulatory reforms, CIPR assists governments and businesses in the region to establish transparent and non-discriminatory IPR regimes and to adhere to international standards. CIPR members include a number of the world's most famous trademark owners in the food, beverage, pharmaceutical, computer and tobacco industries, and enjoy broad support by government trademark regulators and enforcement officials throughout the region.