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SILENCE can only WORSEN

BY Gunjan Piplani  |  comments ( 0 )  | 

 

FMCG brands are skeptical to speak up against brand counterfeiting which eats into a major share of their business.

According to Organisation for Economic Co-operation and Development (OEDC), it is estimated that the approx value of the trade of counterfeits and pirated goods, both through domestic production and trade was close to $200 bn and about $250 bn in 2007.  While Business Action to Stop Counterfeiting And Piracy (BASCAP) under its report in 2011 estimated that the total value of such products in G20 economies is about $600 bn in 2008 and has been projected to reach $1770 bn by 2015. According to the report, these products are being produced and consumed in all nations of which Asia is the largest region. China has been the largest manufacturer of fake luxury goods, FMCG products, music CDs and software.

The number mentioned above are what the international committees cite for the global markets. There are no concrete numbers as to what is the valuation of this market in India. Pertaining to FMCG, the numbers remain closed in the financial books, as brands remain skeptical to share their pain points.

According to Sandeep Gupta, MD, Protiviti Consulting Pvt Ltd, “What drives the Indian consumers to buy fakes is firstly is the price sensitive market that India is. Moreover, the areas where there are an uneducated or unaware consumers, these products tend to mushroom.”

Meenu Chandra, Joint Director, Corporate Law & Corporate Governance Committee on Anti-Smuggling and Counterfeiting Activities Destroying the Economy, says, “Price differentiation is more prominent among youth who are spending their pocket money and want to save wherever they can.”

Not enough voice raised against

What makes the FMCG arena to keep mum about it still remains a question. On other hand, auto, pharmacy, and to an extent, IT have been upbeat about abolishing this phenomena in order to maintain a smooth running for their brand as well as ensuring brand.

For this article, almost all the top notch FMCG brands were contacted but all denied talking about it, except Dabur India.

“The brands are skeptical of talking about brand counterfeit.  On one hand they understand that there is a need of fighting this problem, while on the other hand they are scared of brand dilution. This is where with our committee, CASCADE (Committee on Anti-Smuggling and Counterfeiting Activities Destroying the Economy), we are trying to create a platform for companies to understand that a healthy discussion among the industry as well as media would be the right way to tackle the issue,” says Chandra.

Combat strategy

So far, CASCADE has taken some actions to fight this menace. Chandra informs, “We are proactively coming up with various consumer awareness programmes which will ensure consumers involvement and understanding into the issue. We had run a joint publicity campaign with Ministry of Consumers Affairs under the Jaago Grahak Jago which created awareness among consumers that buying fake products will cause health loss, taxes of the government would go waste and also will call for loss in jobs.  This campaign was run across the country and released in more than 160 newspapers.”

“Consumers do not consciously buy fake or counterfeit products. Tracking counterfeit manufacturers is a challenging task and we employ sleuths to identify locations where counterfeit products are being manufactured. We also, at regular intervals, change our product packs and designs to keep counterfeiters at bay, and undertake mega above-the-line and below-the-line campaigns to educate consumers about the new products, packs and designs,” says PD Narang, Group Director, Dabur India Ltd. Dabur is also a member of the FICCI’s CASCADE.

The legal actions to fight

Trade Marks Act 1999

A trade mark is an identification mark which may be a word, a device, a label, a name, heading or numeral, etc or a combination thereof used to enable the purchaser to distinguish one trader’s goods from similar goods of other traders. A trade mark connects particular goods in the minds of people to a particular manufacturer. For example, when the word LUX is pronounced a picture of soap comes to your mind or when the word COKE is pronounced an image of a bottle of distinct shape, filled with a black soft drink emerges.

Rights are acquired in a trademark/brand by use or by registration under the Act.

A registered proprietor of a Trade Mark or a brand can take an action of infringement under section 29 of the Trade Mark against the use of a trade mark by a person who not being registered proprietor of the Trade Mark or a registered user thereof which is identical with, or deceptively similar to his registered Trade mark.

An unregistered proprietor of Trade Mark can also take an action of Passing off under common law as the word passing off is not defined in the Act. Though it is referred to in section 27(2), 134(1) (c) and 135.Section 27(2) states that the rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. Section 134(1) (c) refers to injunction of courts to try suits for passing off arising out of the use of any trade mark. Section 135 specifies the remedies available in respect of passing off arising from the use of a trademark.  In case of a passing off action, the defendant’s goods need not be the same as that of the plaintiff; they may be allied or even different.

Geographical Indications of Goods Act 1999

Geographical Indication is used to identify goods having special Characteristics origination from a definite territory. Under the Act, the manufactured goods should be produced or processed or prepared in that territory as specified under the law and it should have a special quality or reputation or other characteristics. Some of the common examples of Geographical Indications are Basmati Rice, Darjeeling Tea, Kanchipuram Silk Saree, Alphanso Mango, Nagpur Orange, KolhapuriChappal ,BikaneriBhujia, Agra Petha.

A registered GI is infringed by a person who not being an authorised user, uses such GI by any means in the designation or presentation that indicates or suggests that such goods originates in a geographical area other than the true place of origin of such goods in a misleading manner .

The Act provides for both civil and criminal remedies for infringement. The civil includes imposition of fines, forfeiture to government of all goods and things means of which the offence had been committed, damages, account of profit, together with or without any order for delivery of the infringing label and indications for destruction or erasure. The criminal remedies include imposition of fine or imprisonment or both.

As told by Bhavna Gandhi, IPR Head, Ashutosh Verma
& Associates 


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