Czech firm halts innovation as result of piracy

15-05-2006

It has been said countless times that research and innovation are vitally important if Europe is to remain competitive internationally. But in the Czech Republic, some firms are actually being forced to slow down or halt their innovation processes. The reason: before sales can bring back the costs of research and development, the market is flooded by illegal replicas of the original products.

Sixteen years ago former motorcycle racing driver Pavel Blata constructed his first vehicle in his garage. Since then the Blata company has earned an international reputation with its series of racing minibikes and the Blata minibike has even made it among the 100 icons of Czech design - all thanks to thousands of hours the company engineers have devoted to research and development. Despite all that, Blata posted a loss of 8.5 million dollars last year. It says the reason is that every month an unbelievable 100,000 illegal replicas of their products are being brought to Europe from China. Lukas Vasicek of Blata says in the case of their latest product it took just a few weeks to produce pirated copies.

"It was a four-wheel motorcycle. We launched it on the European market in the United Kingdom. It was about a year ago. We received information that only four days after this launch, one genuine Blata motorcycle was in China and copying began. The copying process was finished after one month. It takes usually one month to get these replicas from China to Europe. So after two months there were already illegal replicas on the European market."

Lukas Vasicek says that Blata has discovered some 150 companies in China that are selling counterfeit Blata minibikes. Even though the products are internationally patented, the fight against breach of intellectual property is tough.

"We are cooperating with customs in all European countries and we have also close cooperation with trading standards departments in each country and from this cooperation we are trying to get as much as possible. The other side is financing of these actions. Because even if the customs seize counterfeits on borders you have to proceed further. Usually by reaching agreement with the opposing party or by starting legal action. And these legal actions are very expensive for small or mid-sized companies."

It's not only intellectual property rights that are being violated by piracy but also the rights of the consumer. Karel Pavlik of the Czech Consumer Protection Association:

"The questions of quality and safety are closely linked together. It can be a serious problem with all types of products, not only motor vehicles. It is much broader. It can be a problem because there can be some quality assurances marks on the products which can guarantee something but when the product is a counterfeit then it's quite sure that it's not true."

According to deputy trade and industry minister Martin Tlapa, the issue of piracy will be discussed during Czech-Chinese business talks in Beijing in July. He has also called on Czech firms tackling plagiarism to inform the ministry. Meanwhile Czech companies plagued by piracy are considering joining forces, for example in order to pool money to cover future court costs.

15-05-2006