The Hindu : When fake passes off as genuine

Online edition of India's National Newspaper
Sunday, Mar 14, 2004

National

National

When fake passes off as genuine

By Our Staff Reporter

KOLKATA, MARCH 13. Over 60 registered Indian companies have names beginning with `Nike'. Similarly, there are 65 companies named after `Rolex' and 217 after `Intel'. Indian brands need not feel left out. There are 136 companies whose names begin with `Tata' and over 400 with `Reliance'. A list of such companies has been prepared by the Manufacturers Association of Information Technology (MAIT), but excludes proprietorship or partnership firms whose number far outstrips the number of registered companies.

Interestingly, while India and other developing nations are perceived to be the hotspot of piracy and counterfeiting activities and attract a lot of global policing, such activities are being carried out even in the United States. A recent study by the Imaging Supplies Coalition, an organisation of printer and supplies manufacturers, revealed that one out of every 20 branded ink cartridges sold in the U.S. was counterfeit. Globally, eight leading IT member companies of the Coalition had lost $ 2 billion to fake toner and ink cartridges. According to International Chamber of Commerce seven per cent of world trade is in counterfeit goods.

The reach of fake products is all-pervasive. A MAIT paper revealed that "two per cent of all airline parts are fake." It was just natural then that "counterfeit parts were discovered in helicopters sold to NATO."

Counterfeiting and piracy are no more private issues but an organised economic crime carried out by powerful groups with terrorist links, Vinnie Mehta, Executive Director of MAIT, said referring to reports on alleged links with the Al Qaeda, the Hamas and the Hezbollah in world counterfeit trade.

"Music piracy is a multi-billion dollar industry and is supported by big anti-social groups globally," said Bela Bannerjee, Joint Secretary, Ministry of Human Resource Development (HRD). They were addressing a workshop on counterfeiting here on Saturday.

The estimated trade losses due to piracy in India was close to Rs. 2,160 crores in 2002. Of the total business, the software segment alone lost Rs. 1,615 crores. The rest include Rs. 346 crores loss to motion pictures, Rs. 168 crores to books and publications and Rs. 30 crores to music.

Estimates of losses to fake products are not easily available. Mr. Mehta said that the loss to IT hardware would be Rs. 400 crores. The loss would rise further with India expected to witness 50 per cent growth in PC sales, from 30 lakh pieces in 2003-04 to 45 lakhs in 2004-05.

MAIT was now looking forward to forming an "IT Anti-counterfeit consortium." Reputed brands such as Intel, HP, Canon and Epson would be involved in the initiative. "The consortium will assess the damage to Indian industry from counterfeit IT products and persuade the Government to set up a tribunal to deal specially with cases related to intellectual property rights violations."

But for economics the impact of counterfeit trade is disastrous. "In 2001, about 1.92 lakh people died in China due to fake drugs," MAIT says referring a report in The Washington Post in August 2002. Similarly 80 per cent of drugs sold in Nigeria are reportedly fake.

It is an industry which sells tap water as meningitis vaccine, mints millions by selling fake Viagras over the Internet and plays with life by selling counterfeit AIDS drugs or birth control pills. "The WHO estimates counterfeit drugs to account for at least 10 per cent of world pharmaceutical drug sales. In developing countries like India it (counterfeit pharmaceuticals) can go up to the extent of 60 per cent."

"The fake industry thrives if originals are priced beyond the reach of the people," admits Ms. Bannerjee requesting industry not to outprice their products.

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