Intellectual Property Right Holders
Considering current proportions of counterfeiting and piracy, intellectual property right holders suffer substantial damage in business, which has also corresponding broader social consequences.
For example, the development of a new technology, of an innovative product or medicinal products requires substantial investment in knowledge, research and development, and for a final product to come to a consumer, it is necessary to invest in its testing, promotion and marketing. However, after such product has gained reputation and popularity on the market thanks to substantial investments, it is generally easy to be copied with technologies widely available today and to be competitive on the market, with significantly lower investments, to the manufacturer who created the product. It is similar with creators in art and the related activities, i.e. authors, performers, as well as the ones who make investments in these works thus making them available to users.
It is exactly for the aforementioned reasons that a modern system of intellectual property protection has been developed, providing for encouragement to innovations and creativity and fair market competition. The acquisition of intellectual property rights and the rights of their holders in terms of usage have been regulated by an elaborated law system providing for a balance between private rights holders and the general social interest.
In addition to direct business damage incurred by income decrease caused by the sale of counterfeit or pirated products, which is omnipresent today and assumes massive proportions, intellectual property right holders suffer an additional damage in terms of undermined reputation, if similar or identical products of lower quality are being sold under their trademark (brand), and they bear substantial costs of undertaking legal measures against infringers (e.g. court expenditures, costs of storing and destroying counterfeit and pirated products).
One should bear in mind thereby that intellectual property right holders are not only financially strong big companies but often also small and medium enterprises or individual creators who base their existence on intellectual property rights.
Piracy causes direct damage to creative authors who create and give driving force to the development of the society. By taking and using their works without asking and getting authorizations, they are prevented from working and creating and living on their creative work in the future as well.
Who are for example these creative authors in music? People who conceive and create musical works: text writers, music authors, arrangers, artists-performers. There are often several authors participating in creation of only one musical work, investing their knowledge, experience, talent, ideas, time. This work of art of theirs was performed and enriched by artists-performers. However, without a physical form – without sound recording media – this work is available to a limited number of people on particular occasions only. There are also a great number of individuals participating in the production of sound recording media invested by discographers: publishing editors, sound masters, technicians, visual designers...
The number of individuals participating in the production of audio-visual works, investing their knowledge, experience, time, talent, work and financial resources in the production and performance of the work, is even far greater.
Total damage incurred to all these creative authors, individuals who get self-employed and try to live on their specific work independently by taking business risks, amounts to several hundreds of millions of kuna per year.