Copyright Trademark

Guest Post: Counterfeit industry landscape in India: A need for introspection

counterfeit pic

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Continuing from Nishidh’s previous guest post which looked at USTR’s OCR of Notorious Markets, this 2nd guest post of his inspects the legal landscape for the counterfeit industry in India. Nishidh Patel is a final year student at RGSOIPL, IIT Kharagpur. Nishidh also has a PG diploma in Patent law (Nalsar) and a Master of Pharmacy – PQA (MSU, Baroda). He also blogs on IP matters here.

The Federation of Indian Chambers of Commerce and Industry – Committee Against Smuggling and Counterfeiting Activities Destroying Economy (FICCI-CASCADE) has released a study that points out that the overall loss to the government & industry due to counterfeit brands in 2012 stands at Rs. 26,190 crore & Rs. 72,969 crore in the seven key industry sectors, and the Indian FMCG sector respectively. According to the survey based on this grey market estimation, the loss to the government annually is Rs. 4,646 crore in personal care, Rs. 5,660 crore in packaged goods and Rs. 6,240 crore in tobacco product. Recent news articles suggest that popular Indian brands are also being counterfeited in jurisdictions like China. In addition, India’s booming e-commerce platform has not been spared by grey market imports of counterfeit products either.

Some of the driving forces responsible for the existence and operation of the grey market are high profitability, large potential market size, tax evasion, rise of brand awareness, moderate investment, rapid advancement of technology, easy access to distribution channels and ease of concealing operations coupled with poor enforcement.

I also came across some articles stating that the government, possibly in response to this, is considering enacting a comprehensive statute on counterfeit, fake, spurious and contraband products. To evaluate the efforts of India to fight the battle against counterfeit goods & piracy, I have prepared a detailed overview of Indian legal framework for counterfeiting. Please go through the tabulated list of Main- IP & other IP related statutes which have provisions for counterfeiting, piracy & smuggling. I’d also like to request readers to give their valuable inputs in the form of comments/suggestions to make this list as exhaustive as possible.

Table: Overview of Indian legal framework for counterfeiting

Main IP Laws
The Trademarks Act, 1999 Sections 27, 28, 29, 30, 67, 102, 103, 104, 105, 106, 111, 114, 115, 116, 118, 119, 120, 126, 134, 135, 139, 140 and 142.
The Copyright Act, 1957 Sections 51, 52, 53, 55, 56, 58, 63, 63A, 63B, 64, 65, 69, 70 and 71
The Patents Act, 1970 Sections 47, 48, 49, 50, 104A, 105, 106, 107, 107A, 108, 109, 110, 111, 113, 114, 120, 124 and 157.
The Designs Act, 2000 Sections 14, 15, 22 and 23.
The Geographical Indications of Goods (Registration and Protection) Act, 1999 Sections 20, 21, 22, 23, 37, 38, 39, 40, 41, 42, 45, 46, 47, 48, 49, 51, 52, 53, 54, 57, 59, 66, 67 and 73.
The Semiconductor Integrated Circuits Layout-Design Act, 2000 Sections 16, 17, 18, 19, 28, 56, 57, 60, 61, 62, 63, 64, 65, 66, 67, 71 and 82.
IP-related Laws
The Information Technology Act, 2000 Sections 28, 29, 43, 45, 46, 47, 61, 63, 65, 66, 69, 75, 76, 77, 78, 79, 80, 81 and 85.
Indian Penal Code, 1860 Sections 468 and 476.
The Customs Act, 1962 Sections 11, 100, 101, 102, 103, 104, 105, 106, 106A, 107, 108, 109, 110, 110A, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 122A, 123, 124, 125, 126, 127 and 140.
Notifications/Circulars issued by Government in respect of Intellectual Property Rights
  • Instructions for implementation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
  • Prohibits the import of specified goods intended for sale or use in India, subject to certain conditions and procedures.
  • Instructions for implementation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
  • Notification prohibiting export of the goods.
  • Amendments in the notification regarding Prohibiting import of counterfeit trademark goods.
  • Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
The Drugs and Cosmetics Act, 1940 Chapters III, IV, IVA & V.
The Food Safety and Standards Act, 2006 Sections 23, 24, 25, 26, 27, 29, 30, 36, 37, 38, 52, 64, 66, 67, 72, 77, 80 and 89.
The Standard of Weight and Measure (Packaged Commodities) Rules 1977 Rules 6, 9 and 10.

The impact of counterfeiting, piracy and smuggling seen across several segments is concisely summarized in figure below which was part of the report titled “Counterfeiting, piracy and smuggling: Growing threat to national security” by FICCI-CASCADE.

counterfeit post pic

“Counterfeiting, Piracy and Smuggling in India – Effects and Possible Solutions” , a report prepared by International Chamber of Commerce – Business Action to Stop Counterfeiting and Piracy (ICC-BASCAP) and India’s FICCI-CASCADE, was released at the Conference on “Trade in Counterfeit, Pirated and Smuggled Goods – A Threat to India’s National Security and Economy”, held on 19-20th, September 2013 in New Delhi. This Report highlights the serious consequences of the increase in counterfeiting, piracy and smuggling in India, and calls for more government attention to these issues at the national, state and local levels. The report outlines the serious implication this has on the Indian economy & IPR regime. In addition, the report gives key recommendations to combat counterfeiting, piracy and smuggling which include the implementation of more stringent IPR norms and enforcement. I do agree to a large extent with the recommendations suggested in this report to overcome the evil of counterfeiting & piracy.

On the other hand, I believe that public awareness via various means can be more crucial to winning the battle against counterfeiting & piracy. Conventional public awareness means are include publicity campaigns, celebrating world anti-counterfeiting day (every year at the end of June), training workshops, interactive seminars, sharing of information etc. In addition to these, some digging around online led me to a couple of interesting out-of-the-box methods of spreading awareness:

“Awareness through art″ by FICCI-CASCADE – On the spot painting and essay competitions on “Fight Smuggling and Counterfeiting” which was the theme of “Hum Kishore Festival”.

Museum of Counterfeit Goods, Bangkok – One of the most unusual and fascinating displays in Bangkok is at the museum of counterfeit goods located at Tilleke & Gibbins law firm to educate people and encourage them to see beyond the cheap prices to address the growing concern of counterfeit goods.

Readers who wish to contribute to overcoming counterfeiting & piracy can do so by spreading the word and reporting fake products in your neighborhood by mailing FICCI-CASCADE at: [email protected] or click here. You can also report to National Consumer Helpline (NCH) via toll free no. 1800-11-4000 or NCH android application.

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