Trade in counterfeit goods causes significant financial losses to the right holders. The Anti-Counterfeiting Trade Agreement (ACTA) is the newly proposed agreement for establishing new international framework for enforcement of intellectual property rights. The agreement aims to crack down on counterfeiting, copyright violations and other intellectual property theft, and would cover everything from fake pharmaceuticals to online piracy of music and movies. But critics fear it could cripple technology companies by holding them responsible for copyright infringement by their users.
Increase in piracy in has been a problem since long. Liberalization and urbanization in India have contributed to a sharp rise in counterfeiting. Counterfeit goods are not only flooding domestic markets in familiar areas, such as software, garments, electronics and leather bags, but also in new areas, including pharmaceuticals, food, cosmetics and personal care products. Counterfeiting has an interesting territorial pattern according to product line. Counterfeit pharmaceuticals tend to come from northern Indian states, while Tamil Nadu in the south overflows with unauthorized factory overruns of branded garments intended for foreign markets. Compounding this problem is a deluge of Chinese counterfeit goods, from bulbs and batteries to toys and tools. While some of these counterfeiting activities cause only financial losses, others in the food and pharmaceutical sectors pose a serious risk to public health.
The latest menace is counterfeiting of mobile phones, which can be a serious national security risk. The end loser in all these activities is ultimately theconsumer. Trade in counterfeit goods causes significant financial losses to the right holders. It poses great threat to sustainable economic development both in developed and in developing countries. Knowledge driven economics can get affected in case of non-enforcement of intellectual property rights.
The Anti – Counterfeiting Trade Agreement (ACTA) is the newly proposed agreement for establishing new international framework for enforcement of intellectual property rights. Countries can join on a voluntary basis and will create an independent governing body outside the existing international frame work set out by World Trade Organization (WTO) and World Intellectual Property Organization (WIPO).
The agreement aims to crack down on counterfeiting, copyright violations and other intellectual property theft, and would cover everything from fake pharmaceuticals to online piracy of music and movies. But critics fear it could cripple technology companies by holding them responsible for copyright infringement by their users.
In 2006, Japan and the United States launched the idea of a new plurilateral treaty to help in the fight against counterfeiting and piracy, the so-called Anti-Counterfeiting Trade Agreement (ACTA). The aim of the initiative was to bring together those countries, both developed and developing, that are interested in fighting counterfeiting and piracy, and to negotiate an agreement that enhances international co-operation and contains effective international standards for enforcing intellectual property rights.
Currently, the 8th round of negotiations on the proposed was held in Wellington, New Zealand from 12-16 April 2010, hosted by New Zealand.Participants in the negotiations included Australia, Canada, the European Union, represented by the European Commission, the EU Presidency (Spain) and EU Member States, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the UnitedStates of America.
79 million articles were seized at EU borders in 2007, in over 43.000 customs actions.
ACTA would contribute to fighting counterfeiting in three ways
Building international cooperation leading to harmonized standards and bettercommunication between authorities. This will build on coordinated anticounterfeiting work the EU is already doing with large partners like the US and Japan. These standards would then be spread to other countries if they wished to sign up to ACTA. The EU has proposed transitional mechanisms and technical assistance to help advanced developing countries join the pact in the future
Establishing common enforcement practices to promote strong intellectual property protection in coordination with right holders and trading partners. The EU is consistently pushing countries like China to enforce anti-counterfeiting legislation and to toughen the legal penalties for intellectual property theft. Closer coordination on international benchmarks can reinforce this pressure;
Creating a strong modern legal framework which reflects the changing nature of intellectual property theft in the global economy, including the rise of easy-to-copy digital storage mediums and the increasing danger of health threats from counterfeit food and pharmaceutical drugs
COUNTERFEITING IN INDIA
It and software industry considered to be fastest growing industry in India, is severely hit by piracy and counterfeiting. As the Indian software and IT industry is expanding, growth of software piracy is increasing exponentially so that it has almostbecome an industry in itself. IT Hub of Delhi, Nehru Place is the major business center in Delhi. This is one place that host shops selling computers and computer parts. Each and every part of computer is available in almost every range. You will be amazed to see street hawkers selling computer hardware as well as softwares in the lawns of Nehru Place. Even before Microsoft, the world’s biggest software maker, launched Windows 7 in India, pirated version of the company’s new operating system was already selling at this place just for Rs.50.
The software sold here even comes with a warranty…well, of sorts.”Bring it back if there are installation problems. We’ll refund your money or exchange the CD.” Name a software and they have it. Ditto for game CDs, MP3s to some extent, and pirated VCDs to a lesser extent.”If a particular title is not available, we will get it for you,” says another dealer.
Selling prices are not fixed, and vary from customer to customer. There’s a flat rate of Rs 100 per CD, irrespective of software content, for those used to buying software from around here, and thus knowing what benchmark to bargain for. Operating systems are the best grosser, with Windows ’98 topping the list. As is understood, software used by the home segment or SMEs is available more readily. A Lotus SmartSuite might be available, but will take more time to purchase, because it will cost more. Each individual dealer (the author spoke to 15 such) sells eight to ten CDs a day on an average – translating into a neat profit of Rs 7,000-8,000 at the end of the month. Multiply that with the number of dealers on the prowl, and profits are in the range of Rs 400,000 and that is a conservative estimate.
Software piracy’ is defined as an act of unauthorized copying, loading or distribution of copyrighted software in violation of the end-user license agreement. The intent of a counterfeiter is to deceive consumers into believing that they are purchasing an original software program. The counterfeit software programs are first copied to a CD or DVD and are then packed, sealed, distributed and sold to consumers in packaging which is identical to the
original packaging of the genuine software program. Counterfeit versions are also accompanied by copies of enduser license agreement, user instruction manuals, registration cards and security
Impact of software counterfeiting
Software counterfeiting has a farreaching effect on the Indian economy. Not only does it affect the IP owners’revenue, it also induces the purchasing public to get into the habit of evading tax. Software companies invest a lot of money in developing their software products, but receive no return on investment from the sale of counterfeit software products. Both the software industry and the community at large are affected.
Another problem that Indian pharmaceutical companies face with growing concern is the impending export barriers that are appearing in Western markets. In light of the increasing incidence of counterfeit medicines, many governments are introducing strict measures to ensure the safety of drugs that
come into their markets from abroad.
Generics vs counterfeits
India being the largest producer of generics in the world, many problems are being faced by India Pharmaceuticals example being the recent drugs seizures in Europe.
ACTA AND GENERICS PHARMA
ACTA treaty could negatively impact on its trade in generic medicines, the text requires that countries provide procedures for the customs seizure of goods’suspected’ of infringing trademarks, copyrights and other IPRs against goods ‘in-transit. According to the ACTA text,’In-transit’ includes’customs transit’ and’transshipment’. Seizures would be allowed even where there is a mere ‘prima facie’ case of IPR infringement. In view of the recent seizures of generic drug consignments, provisions relating to’in-transit’ in all likelihood would create barriers to access to essential generic medicines, as well as access to critical climate change technologies. ACTA reduce the power of the courts and the accountability of court-enforcement and ends up transferring too much power to the owners of intellectual property by allowing for the seizure of goods without court oversight.
Is ACTA the answer?
The jury is still out on whether ACTA will succeed and whether a clear, ambitious and yet practical standard will be developed from it across a range of civil and criminal enforcement topics outlined draft. But no matter what your view on ACTA, it is impossible to ignore the crippling effects illegal file sharing and other types of counterfeiting are having on the music and movie industries in particular. Something clearly has to be done.