The legal team of Hindustan Unilever last month made a presentation on issues related to intellectual property rights to a rather unusual audience 14-year-old students from St Xaviers School in Bhandup, a central suburb of Mumbai. The country’s largest consumer products company is keen to involve its future consumers in its fight against counterfeit products. It has urged the government to teach intellectual property in schools, and has decided to engage directly with schoolchildren, educating them about the importance of brands and how to identify genuine and fake products.
“We have proposed to the government that intellectual property should be part of the syllabus in schools because we feel we have to catch them young,” said Dev Bajpai, executive director for legal and corporate affairs at Hindustan Unilever, or HUL. The proposal was part of its suggestions made to the new National IP Policy that will oversee implementation of IPR laws and regulations in India. At its interaction with schoolchildren, besides explaining various IP-related issues, the team from HUL also gave students an opportunity to identify some genuine and fake products. “The young students were keen to go to the market with a spirit of enquiry,” said Bajpai.
“After the new season begins in June, we are going to do many more activations in schools,” he said. Counterfeit or fake products are generally products with similar logos and packaging, but sold at knockdown prices.Industry estimates suggest that 3-5 per cent of all products sold in the Rs 2.4-lakh-crore FMCG (fast-moving consumer goods) market in India are counterfeit. That’s over Rs 12,000 crore of loss in Rs 8,000-sales for branded products each year.
Counterfeits remains a widespread problem in India despite the country is having strong enough laws to regulate the infringement of IP. Experts blame it on the inefficiency of the enforcement mechanism.”Due to this, brands suffer loss of revenue from royalties, profits and higher costs for policing and fighting pirates,” said Rakesh Nangia, founder and managing partner at tax and transaction advisory firm Nangia & Co. “These costs burdens companies and results in reduction of organisational growth. In addition to this, there is also a high chance that these companies suffer from declining customer loyalty due to brand dilution,” he said. For the past several years, HUL has been working to remove fake items from retail shelves, independently and through several industry bodies. The company has also taken actions overseas in Singapore to stop counterfeits coming from China into India.
“The regulations concerning parallel imports need further tightening so that unintended consequences of permitting parallel imports in the form of inflow of grey imports and counterfeits can be avoided,” said Bajpai.