Bharat Dube and Frank Rittman discuss the menace of counterfeiting in India and provide tips for brand owners and general counsel on how to fight it
In June, Jack Ma, chairman of the Alibaba Group, infamously stated at a gathering of investors at Alibaba’s corporate headquarters in Hangzhou that “fake products today are of better quality and better price than the real names. They are exactly the [same] factories, exactly the same raw materials but they do not use the names.” Ma stepped into a firestorm with his comments, which prompted luxury brands and other trademark owners to voice their concerns about the prevalence of fakes on Alibaba platforms, notably Taobao. Brand owners’ outrage at Ma’s remarks was reflected on social media sites.
Contrast Ma’s comments with those of Lei Jun, the founder of Chinese smartphone maker Xiaomi, at a news conference in April 2015. He stated that counterfeiting was seriously damaging the company’s revenues. “What is the biggest problem? If there were no counterfeits, our sales would be double or triple,” said Lei.
Counterfeit and pirated goods are ubiquitous. The prevalence of such products seriously impacts business sales volumes, investments, royalties and brand values and increasingly threatens every sector of society. For governments, counterfeiting and piracy erodes tax revenues, expenditure and the effectiveness of public institutions.
For example, the Narendra Modi government’s “Make in India” campaign is publicly undermined by counterfeit products freely available online and typically imported from China, South Korea, Thailand or Vietnam. India’s ongoing transition from a brick-and-mortar-based economy to a digital one and the continued proliferation of broadband technology brings a seemingly unstoppable flow of fake consumer goods, often – but not always – sourced from overseas. In particular, fake clothing brands as well as pirated books and software are often produced locally in India and sold both domestically and overseas.
BHARAT DUBE is the CEO of Strategic IP Information (SIPI) in Singapore and serves as an adviser to Indian IP firm Anand and Anand. Prior to establishing SIPI (which has its main operations in Noida), Dube was the global head of anti-counterfeiting for the Swiss luxury goods conglomerate Richemont. FRANK RITTMAN is head of the copyright division of SIPI. He was formerly the senior vice president, deputy managing director and regional policy officer (Asia Pacific) for the Motion Picture Association of America, where he was in charge of rights enforcement, government relations, cross-industry lobbying, and communications.