Fake no more

Well-intentioned proposals to check counterfeiters

Corporate India’s proposal for setting up a special cell to fight the menace of fake goods deserves to be welcomed. Earlier, the war against the proliferation of counterfeit and pass-off products concentrated on the demand-side of the problem. But now, this war is acquiring a supply-side dimension to it — that of strengthening the enforcement of existing laws. The sheer scale of the problem — the domestic fast-moving consumer goods industry suffers an annual loss of Rs 2,600 crore, the government loses revenue to the tune of Rs 870 crore, and consumers annually spend about Rs 2,500 crore on fakes — necessitates a special cell within the government with the mandate to check the manufacture and sale of such spurious goods. Additionally, economic offences are of a different nature, than say, petty thefts. Cells, at the central as well as state level, manned by specialised staff who have the requisite knowledge of issues involved, such as intellectual property rights protection, are of critical importance if the menace is to be checked.

The government is also considering the deletion of certain provisions in the Trademarks Act, 1999. The Trademarks Act is in itself a straightforward piece of legislation — it makes the manufacture or sale of counterfeit or pass-off products a cognisable offence. An aggrieved company or a consumer can directly inform the police station in whose jurisdiction such products are being sold, together with explicit proof of the same, empowering the cops to conduct raids. But the law is mitigated by a provision in the Act which requires prior approval of the Trademark Registrar before the enforcement authorities can seize the infringing goods. A multiplicity of channels which give rise to a high probability of information leakages, and the time period involved before action is actually taken, all make it easy for offenders to escape apprehension. To the extent that the deletion of this provision makes enforcement less cumbersome, this move is also to be welcomed. But the million dollar question remains: will the government be able to ensure that a new, friendlier, administrative and legal machinery functions effectively? That seems doubtful, given our past record. Merely amending legal provisions, or formulating special cells, may prove to be unlikely deterrents in such a system, despite all good intentions.