‘Soft’ approach to fight against piracy criticised

Date: 20/06/1996

By Fiona McHugh

Trade Commissioner Sir Leon Brittan should take a leaf out Charlene Barshefsky's book, according to representatives of Europe's film and music industry.

Just two months into the job, the acting US trade representative has already scored a major anti-piracy victory, squeezing a string of concessions out of China. After 18 months, they say, Brittan has no such feather in his cap.

European record and film companies have welcomed the Washington-Beijing accord, but say it is further depressing proof of the EU's inability to fight its own commercial battles.

“Most of the top record firms in the world are European, and yet we need the US to defend us from piracy,” says Phillipe Kern of Dutch film and record company, Polygram.

Certainly, when it comes to tackling copyright infringers, Brittan cuts a rather limp figure next to Barshefsky. In the case of China, she threatened a multi-billion ecu trade war with Beijing while he sent stern letters.

In the case of Tokyo, it was she who lodged a complaint with the World Trade Organisation about illegal practices on the Japanese market first. Brittan then followed Barshefsky's lead.

More hiding behind US coat-tails, or a judicious decision to use diplomacy before threats? Commission officials insist Brittan does not have to play hardball to get what he wants - and some businessmen agree.

“We have chosen a cooperation route and believe it will yield positive results,” explains a Commission official.

But many in the record, film and clothing industries are beginning to ask how long they must wait before Brittan's approach pays off. An estimated 100-billion-ecu worth of fake products are sold each year. That figure is likely to climb even higher when border controls with Central and Eastern European countries are dropped.

Black market goods eat into established companies' revenues and, even worse, undermine the credibility of their brands.

“These products fall apart after two weeks or they lose their colour and that gives the original a bad name. It cheapens our reputation,” explains Hans-Hermann Deters, a legal adviser to the sportswear company, Reebok.

Companies such as Reebok have begun to take matters into their own hands. In Turkey, for example, the German Anti-Piracy Association (VBP) - a grouping of sportswear companies - deployed a team of detectives to investigate illegal commercial activity last year. Presented with the group's findings, the Turkish authorities launched a series of dawn raids on bazaars. Some 200,000 fakes were found and several traders arrested.

Seven months later, most of the cases are still pending, but that comes as no surprise to the VBP. Courts in offending countries often take years to process cases and when verdicts are delivered, vendors of illegal goods often get off lightly.

The group has also begun to train customs officials to separate fakes from real things and to report illegal finds to the relevant authority. All of this should help reduce counterfeit trade - but not by enough.

“We have to create the right legal environment and that means changing the rules and ensuring that they are enforced,” says VBP lawyer Volker Spitz.

Industry suggests the Union could start by outlawing imports of counterfeit goods for non-commercial consumption.

The Union could also grant rights holders greater access to information on counterfeiters in the proposal on the legal protection of industrial designs currently doing the rounds of the EU institutions.

But more importantly, says the industry, the Commission should use its bargaining power to ensure that anti-piracy laws are properly enforced and criminals are given sufficiently stiff penalties.