Hard to combat counterfeit business becomes global concern
Multinationals today are striving to protect Intellectual Property Rights as it has been found that for every genuine brand in the world, there is a fake, counterfeit or substandard product manufactured somewhere by someone. This was highlighted at the recently held media briefing by the American Chamber of Commerce in Sri Lanka (AMCHAM) aimed at addressing the challenges and consequences posed by illegal trafficking of counterfeit goods.
At the briefing Consumer Affairs Authority Director Consumer Affairs and Information Chandrika Thilakaratne said, “The costs and negative effects of counterfeit products on all stakeholders are broad and numerous ranging from lost taxes, royalties and other revenues, loss of goodwill and reputation, reduced incentive to innovate and invest, lower employment and many more.”“Statistics show that over 750,000 jobs are lost annually due to counterfeits on a global scale. The country as a whole needs to take steps to enforce strong civil and criminal laws to protect IPR to continue to foster innovation, creativity, safeguards consumers and drive economic growth,” Mr. Thilakaratne explained.
Counterfeiting is a global problem fueled by socio-economic variables such as poverty, ambivalent consumer attitudes towards IPR, the involvement of criminal networks and easy access to illegal goods, stated Sanjaya Fernando, Country Security and Anti Illicit Trade Manager, Ceylon Tobacco Company. He added that the estimated loss of revenue to the country from illicit cigarettes is approximately Rs. 2 billion a year. Criminal organisations are often attracted to cigarette smuggling since it’s a high profit making business with low risk. It is a flourishing industry for which when smugglers are caught, the punishments are very lenient.
There is no mechanism to track offenders once caught to ascertain if they are continuing with the trade, Mr. Fernando noted. Researchers show that 25 to 30 per cent of medicines supplied in developing countries are either substandard or counterfeit. Many forms of legitimate medicines have been counterfeited for a multitude of reasons including the lack of overheads available for quality control and the ease of inserting these products into the distribution chain, a representative of the pharmaceutical industry explained. Software piracy is another growing problem due to the general misconception that genuine software is very costly, Aromi Silva, Compliance Manager for South East Asia and new markets, Microsoft Sri Lanka stated.
She said that pirated software adversely impacts new technology innovations and the installation of pirated software is a key reason for online fraud and cyber-crime, which is increasingly putting businesses and government at cyber security risks. The counterfeit automobile spare parts industry thrives due to poor customer awareness of the dire consequences. The safety of you and your family should never be compromised for a short term cost saving explained, Associated Motorways General Manager Prasantha Waidyaratne. Customs Consumer Protection Unit, Deputy Superintendent, Ashroff Samzudeen said, counterfeit seizure in Sri Lanka is around 8 per cent annually and added that more regulations were required to combat the counterfeit trade.