Product piracy costs 6.4 billion euro

“An average 4 per cent loss of sales should not be dismissed as trivial,” explains Rainer Glatz, pointing out that two years ago the figure was 3.7 per cent. The VDMA’s 2010 representative survey shows that losses caused by product piracy amount to an estimated 6.4 billion euro for the capital goods industry alone with the percentage of undetected cases being high. The number of machinery and plant manufacturers affected has risen steadily over the last few years. Just under two thirds of all firms have already been affected by piracy.

“Many firms mistakenly accept the lost sales as a fait accompli, but that does not make the problem go away,” warns the chairman of the new working group. Failing to fight product piracy just creates more problems, because more and more pirates are becoming direct competitors on the market – and that results in more lost orders than are caused by illegal activities.

Platform for product protection technologies and services

AG Protect is striking at the roots of the problem: suppliers of technologies and services for the protection of products and intellectual property are joining forces to create a comprehensive platform that has not existed in this form before: “No one has covered the topic across the whole spectrum of technology,” says Rainer Glatz, referring to his intention in setting up the working group. “That is what AG Protect seeks to do; more and more firms that have been affected in this way are looking for viable and reliable solutions and we want to offer them professional help.” While, as a result of imitation, the capital goods industry suffers most from product piracy, the corresponding industrial sector in Germany has at the same time become the global market leader in the development of technologies aimed at countering product piracy.

Latest developments made available to VDMA members

The working group will act as a clearing house, making the latest developments and measures available to all VDMA members. AG Protect is coordinating measures to provide product and intellectual property protection as part of the VDMA’s Pro Original initiative.

The Pro Original research project, which is supported by the Federal Ministry for Education and Research and managed by the Karlsruhe Institute of Technology, has developed a protected machine tool. The machine tool as a whole incorporates protective measures at every level. Individual components are protected against piracy and unauthorised manipulation just as much as the machine tool itself. The prototype was shown for the first time at the Hanover Trade Fair.

Latest technologies at leading world trade fair K

The latest approaches and pioneering technologies will also be shown at the leading world trade fair K 2010 in Düsseldorf in October. What can plastics and rubber machinery manufacturers offer their customers to protect their production? Means of protection will be shown covering everything from development to the complete machine, including spare parts. The working group will also provide information about the safeguards that are already available or in the course of development to protect everything from spare parts to the complete machine against product piracy.

Plastics machinery manufacturers badly affected

“One in every eleven firms affected by piracy belongs to the plastics and rubber machinery industry,” adds Thorsten Kühmann, Managing Director of the VDMA Plastics and Rubber Machinery Association. “In the light of these figures, protecting yourself is absolutely essential,” he stresses. The 2008 survey showed that only one firm in 20 was affected. It also showed that in 74 per cent of cases it was in fact the complete machine that was copied.

“This was also BEKUM’s experience,” reported Andreas Mehnert, sales manager at BEKUM Maschinenfabriken GmbH, Berlin. “Our machines were copied down to every detail – even the choice of colour,” he says.

BEKUM puts the damage caused by illegal copying at almost ten per cent of sales. Since resorting to technology had so far offered little in the way of protection, the focus had now shifted to direct customer contact and full discussion of the issues. “We make clear that by buying original products our customers are not only getting better quality but are also protecting themselves,” says Andreas Mehnert.

They were particularly keen to raise these matters with customers during trade fairs. BEKUM draws attention to the VDMA’s Pro Original campaign on its fair stands. Andreas Mehnert is convinced that more can be achieved by acting together.

Unity is strength

Rainer Glatz, too, sees promoting joint action as one of AG Protect’s important tasks. “Originality becomes a product characteristic and a competition factor,” he stresses; “it provides the customer with added value.” Technologies are becoming necessary to make products distinctive and protect them against imitation. This will also affect the manufacturing process. “Machinery manufacturers will for example have to develop and offer add-ons for security technology,” adds Thorsten Kühmann.