October 3, 2009: The Russian firm Izhmash (Izhevsk Mechanical Works) holds the patents for the AK-47, and it is going broke because of all the illegal copies of its weapons being produced worldwide. Izhmash is having little success in trying to force companies in Bulgaria, Romania, Poland, Israel, China and the United States to pay licensing fees for the AK-47s they produce. The typical defense is that it is a much improved rifle, with only a superficial similarity to the Izhmash AK-47. Some claim that Russia abandoned the AK-47 design in the 1970s, when they switched to the 5.45mm AK-74. Actually, the original AK-47 design was replaced in 1963, at least in Russia, by the similar (in appearance) AKM.
Izhmash is 201 years old, and was originally founded by the Czarist government as a state arsenal, for the production of military weapons. In the 1920s, the firm began to produce motorcycles as well, and later, automobiles, and eventually machine tools. It has long been a major manufacturer of Russian military rifles, machine-guns and pistols.
During the Soviet period (1923-91), there were patent laws on the books, but these were generally not observed, especially when it came to foreign technology. The Soviets would respect patents when it suited their purposes (that is, it was cheaper to get help from the patent holder to implement a technology, than it was to just steal it and figure it out), but generally the concept of intellectual property was ignored. Having allowed that kind of thinking to gain some traction, the Russians have had a hard time enforcing rights to Soviet era Russian inventions in a post-Soviet world.
Izhmash is also suffering from poor management, and competition for all of its product (machine tools, other metal working products and lots of metal items). But it's weapons patents, which should have been a prime source of income, has turned into a morass of litigation and legal expenses.