Counterfeit Market

Economic News

22 Jul 2010
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Despite having stepped up its efforts to combat intellectual property theft, Bulgaria still needs to do more in its battle with copyright pirates, according to a report released by the International Federation of Phonographic Industry (IFPI).

Ten years ago, Bulgaria was listed by the IFPI as the largest producer of illegal CDs in Europe, and second worldwide to China. A decade later, the problem remains, despite efforts of successive Bulgarian governments to crack down on the illicit trade.

While the trade in pirated products is a global problem, with one estimate putting the sales of illegally produced music recordings alone at 65% of the total worldwide, in Bulgaria it is estimated at 80%.

The problem is not just confined to the entertainment sector, however. According to the Business Software Alliance (BSA), a similar situation exists regarding software for commercial purposes. A BSA study showed that an estimated 73% of all business software used in Bulgaria was pirated. There has also been an increase in the use of the internet for the distribution of illegal software, posing a major threat to legitimate software businesses in Bulgaria, the BSA report said.

The IFPI's report recommended that the Bulgarian government enact legislation that would make the possession of pirated material for commercial purposes a criminal offence. Further, the report recommended that the government boost penalties for infringements on intellectual property rights, ban street sales of cultural and copyrighted products and rigidly enforce these bans.

While noting that Bulgaria had moved to tighten up regulations governing copyright infringement, the IFPI said there was the need to implement these laws more strictly on the ground. Also, it stated that there was a need to ensure that seized pirated goods were destroyed and not returned to the market, and that steps be taken to improve border enforcement to halt the importing and exporting of pirated products.

Until recently, a mere 5% of criminal cases involving copyright infringements and piracy have ended in convictions, with a suspended sentence being the usual outcome of those found guilty and fines of less than $500 being levied.

On August 2, in a letter to the Bulgarian Education Ministry, Stefan Kravchuk, regional director Eastern Europe of IFPI, explained that although Bulgaria's piracy level is among the highest in Europe, there had been significant progress to combat intellectual property rights theft in the last year.

"Bulgaria's law enforcement authorities have become more active in targeting piracy, and protecting copyright," he wrote.

Another recommendation by the IFPI was to raise awareness among the Bulgarian public of intellectual property theft, a recommendation the government has taken on board. The authorities have also launched a crack down on pirates and have linked up with intellectual property lawyers, Arsis Consult.

The partnership has had swift results, with a number of major hauls of pirated software and entertainment materials being made in the past month. The latest of these saw police seize almost 3000 CDs loaded with illegal software, games and movies from a store in the Black Sea city of Varna in early August.

Intellectual property rights theft is also a potential stumbling block for Bulgaria's EU aspirations. Late last year, the European commissioner for taxation and customs, Laszlo Kovacs, put Sofia on notice that it still had much to do before it could join the EU as scheduled at the beginning of 2007.

"Bulgaria has achieved a lot but there is still a lot to do to complete the preparation," he said "Counterfeiting is still a concern in Bulgaria because of the production of fake CDs and transit of counterfeit products from Turkey towards the EU through Bulgaria."

Meanwhile, a study conducted by the Sofia-based polling firm Vitosha Research said that up to 5% of Bulgarians earned an income from the copying, circulation and retailing of piracy products.

The poll also showed that just over a quarter of those surveyed said they believed the government's efforts to curb piracy would have a negative impact on the consumption of products.

With the present price of a legally produced music CD in the Bulgarian marketplace being about $9, compared to the cost of a readily available pirated equivalent at $3 or even less, many Bulgarians see little incentive to obey the law. Until such time as the penalties and implementation of laws make intellectual property rights theft unattractive to producers, the Bulgarian public's appetite for cheap music and software will continue to be fed.

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