IMPLEMENTING ANTI-COUNTERFEITING LAWS

TARIQ AHMED SAEEDI (tariqsaeedi@hotmail.com)
May 11 - 17, 2009

Counterfeiting or manufacturing of look-like goods has become a global phenomenon putting up serious challenge for government in generating tax revenue and human development and in front of organizations capitalizing on and earning from brand equity. With weak or lack of mechanism to round up counterfeiting developing nations are substantially vulnerable to unrestricted positioning of products that provide low-priced substitutes to original brands, promoting illegal trade and putting human health in danger.

Low price is perhaps the only benefit that makes fake products tide over the major market shares usually in countries with low per capita income. Counterfeiting is common in numbers of products but pharmaceuticals, consumer goods, food and beverages, chemicals, cosmetics, automobile parts, books, hardware and software are generally imitating categories of goods that elicit response of illicit traders because of their volumetric consumption. It is said that Latin America and African countries are huge markets of fake pharmaceutical products. Pakistan is not an exception. In fact, an estimate outlines that more than half of the products in the country are fake or counterfeited. Looking around warily roadside stalls, shops and pharmacies will obviate need to question credibility of the figure, as one would surely notice ubiquitous penetration of substandard goods in the market in every category.

PUBLIC UNAWARENESS AND LOW BUYING POWER

In Pakistan, popular brands lose 20 percent sales revenue to counterfeiting, says a report of Anti Counterfeit and Infringement Forum Pakistan. Two main reasons: public unawareness and low buying power are giving way to fake consumer goods and spurious drugs in Pakistani market. The brand unconsciousness spawns ignorance of a large population about unregistered or unknown products during buying process, but on the other hand their incapacity to buy expensive products make them tolerant to substandard goods. However, these two reasons are inseparably associated with the consumer rights legislations.

There are laws dealing with violation of consumer rights and infringement of intellectual property rights in the country, but apparent structure of designated law enforcement agency is too narrow to ensure allegiance across the board. Despite that intellectual property and anti-counterfeiting laws are fragmented they are securing rights of consumers and manufacturers. It may be recalled that understaffing has confined ability of Pakistan Standard and Quality Authority to ensure regulation of products in conformity with the standards. Senior law professionals and IP experts exhorts the need for more consumer laws in Pakistan. It is relevant to mention consumer protection law has been signed three times but it is yet to be approved by the Sindh Assembly. Hopefully, after ratification consumer courts would be established in the province to put on trial unscrupulous elements.

Deal with the complexity and gravity of consumer rights protection requires exclusive courts so that not only piracy issue would be addressed but also violation of consumer rights by mainstream companies. In Punjab, consumer court has exemplified statutory power by hauling up a multi national company for its flouting of consumer rights last year.

PIRACY

According to Federal Investigation Agency (FIA), copyright piracy caused over $95.7 million trade loss to Pakistan in 2005. The record of accomplishment of FIA shows score of its swats against CD/DVDs counterfeiters. Though it conducted crackdowns on unlawful manufacturers of consumer goods, the instances were not as many as in other cases. It seems law enforcement agency takes action on complaints and it is bereft of institution-driven mechanism that is vital at least in the case of fake consumer and pharmaceutical goods that have direct implications on human health. Pharmaceuticals are among those sensitive products that if remained below quality standard pose hazards to heath. According to an estimate, there are 45,000 registered pharmaceutical goods in Pakistan. Drug inspectors are also responsible to monitor quality of medicines in the market. In addition to posing risks to health, counterfeiting undermines immensely process of industrial development. For example, when there is a lack of guarantee of protection to IP researchers go slowly in innovative assignments or they completely withdraw new initiatives. Pharmaceutical industry Pakistan has witnessed this over past few years. Rate of local formulae preparation is negligible rather companies import large portion of raw materials from foreign countries. It is obvious perseverance in researches obstructed by slight data exclusivity-protection of research data-could have minimized import components to a reasonable level.

ACIF says that since there is no guarantee of confidentiality of research file when it is submitted for approval to ministry of health, reluctance of researches is becoming common. Drug development process takes long period and costs million of dollars in industrial process therefore sponsors tend to earn return on investment with having patent or trademark. Adulterated consumer goods and counterfeited beverages are also dangerous to human health. More counterfeited products dwarf tax revenue. Referring to tobacco industry, which has been a single largest contributor of excise duty of Rs34 billion, the report said illicit trade of tobacco products caused Rs7 billion revenue loss to national exchequers in a year. Illegitimate or undocumented trade is detrimental to both industry and government. Expansion of laws and meticulous enforcement are imperative to curb the menace of counterfeiting. Considering one of the two reasons mentioned earlier, counterfeiting should be curbed with analysing price impact of it on public.