INDIAN COUNTERFEITS
Counterfeiting and piracy are among the most serious threats faced by industries globally. In India, the problem is especially big, but efforts to tackle it are becoming more and more effective. Anuradha Salhotra explains.
Counterfeiting has evolved in recent years from a localised industry concentrated on copying high-end designer goods to a sophisticated global network of businesses involved in the mass manufacture and sale of a vast array of spurious goods. It is largely estimated that international trade in counterfeit products exceeds 7 percent of global trade.
Some key facts:
• According to estimates from the World Customs Organisation and the Organisation for Economic Co-operation and Development, approximately 7 to 10 percent of global trade is derived from counterfeit products. Revenues from these sales are growing at an alarming rate—by more than 400 percent since the early 1990s.
• The US Food and Drug Administration (FDA) estimates that 10 percent of all prescription medicines circulating in the world are counterfeit.
• The World Health Organisation (WHO) conducted a survey of counterfeit medicines in 20 countries between January 1999 and October 2000 and found that 60 percent of counterfeit medicine cases occurred in poor countries and 40 percent in industrialised countries.
• The World Health Organisation (WHO) estimates that counterfeiting costs the global economy more than $100 billion per year.
• The Motor & Equipment Manufacturers Association (MEMA) conservatively estimates
that counterfeit goods cost motor vehicle suppliers up to $12 billion globally in lost sales every year.
Counterfeiting in India
India continues to be on the United States Trade Representative’s 2009 ‘Priority Watch List’ despite making progress on improving its intellectual property rights infrastructure and enforcement. Te Federation of Indian Chambers of Commerce and Industry (FICCI) brand protection committee estimates a loss of INR200 billion ($4.5 billion) per annum, while the media reports assess the damage to the Indian industry at around INR300 billion ($6.7 billion) per annum. According to a study in 2007 conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the annual loss of revenue to the Indian government is INR150 billion ($3.4 billion) and the loss to industry is INR 300 billion.
Counterfeit and piracy are witnessed in India across sectors. No industry is spared by this illegal activity, be it information technology, pharmaceutical, automotive, music, movies, computer soſtware or consumer goods. India has a large drug manufacturing industry and Indian pharmaceutical companies have suggested that in India’s major cities, one in five strips of medicines sold is a fake. Tey claim a loss in revenue of between 4 and 5 percent annually. Te industry also estimates that fake drugs have grown from 10 percent to 20 percent of the total market. According to the Automotive Component Manufacturers Association of India (ACMA), counterfeit car parts account for over
37 percent of the total market. Te music industry also faces about 40 percent of its production being copied and distributed illegally. Te fast moving consumer goods (FMCG) sector loses about INR17 billion ($382 million) of revenue annually. According to a study conducted by the Business Soſtware Alliance (BSA), the Indian soſtware industry recorded a loss of $2 billion in 2007 due to piracy.
Reasons for piracy in India
• Counterfeit goods are cheaper than genuine goods • Easy availability of counterfeit goods
• A layman with limited knowledge and awareness can easily fall prey to fake goods, especially since they are low cost
• Te fake goods have packaging identical to the original goods
• Enforcement of laws against counterfeiting and piracy in India still needs to be made stricter, although recent steps taken by the stakeholders, industry, government and the courts have shown marked improvement.
Law and enforcement in India
India has made progress in improving its IPR infrastructure, including the modernisation of its intellectual property offices. India has also introduced the e-filing system for trademarks and patent applications. Te Indian IP offices have also begun digitising IP files. While India does not have separate legislation to address counterfeiting, there are statutory remedies, both civil and criminal, embodied in various
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World Intellectual Property Review May/June 2011
37
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