Anti-Counterfeiters Focus On Organised Crime, Softer Public Message

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Istanbul – The unsuspecting consumer must above all be protected against counterfeit products, speakers said today at meeting of private sector, intergovernmental and governmental representatives. But increasingly organised crime is dealing the products, and anti-counterfeiting forces need to be as innovative as possible to defeat it. Fortunately, the private sector is ready to step up to help cash-strapped governments, and it is taking the “respect for IP” message to … children.

The 7th Global Congress on Combatting Counterfeiting and Piracy is taking place from 23-25 April in Istanbul, Turkey, one of the world’s biggest international crossroads. The congress is co-sponsored by the World Customs Organization, World Intellectual Property Organization and Interpol.

Turkey has been telling the world for years that there is terrorism supported by trafficking, smuggling, money and counterfeit products that it cannot stop from leaking through its long, mountainous borders, Turkish Prime Minister Recep Tayyip Erdogan told the opening of the meeting. “No one is losing lives due to bullets or bombs in Turkey, but toxic drugs” are killing its young people, he said, adding an appeal for help from other nations.

Kunio Mikuriya, secretary general of the World Customs Organization (WCO), said organised crime networks are “deeply involved,” making huge profits from illicit trade. But now the problem is the internet, with money crossing borders. They keep innovating, so “we have to innovate too,” he said. He cited an example of customs moving into IPM technology in the mobile sector, allowing a scan of items to determine their legitimacy.

World Intellectual Property Organization Director General Francis Gurry said intellectual property provides a basis for market order, and is a means of converting knowledge into assets. It is a framework in which intellectual assets can be traded, he said.

Gurry said that over $500 billion will be spent on advertising this year, which goes toward creating demand for brands. He later said everyone has access to advertising, but not to the purchasing power, which is problematic. Some companies are using differential pricing for different markets to try to address this, he said. All countries appear committed to enforcing IP rights, he said, but each has different circumstances.

Answering a question on access to medicines, Gurry said IP rights are generally meant to be an enabler, an incentive for innovation. But standards are used to connect the two aspects of IP rights – protection and access – and policymakers have to find the right balance repeatedly.

On the definition of counterfeit, a subject of debate in Geneva, Gurry responded that it is a deliberate attempt to deceive consumers with an imitation of a mark or trade dress, a deliberate hijacking of the goodwill and trust of consumers toward a product.

Ron Noble, secretary general of Interpol, said the police organisation’s biggest resolve is to ensure that counterfeited illicit and pirated goods are kept away from unsuspecting consumers. Interpol is undertaking some new initiatives and has changed some staff, such as a new director of its trafficking and illicit goods group starting in June.

Interpol also has a new multi-disciplinary initiative on pharmaceuticals and medical products crime, but apparently separate from IP rights, with support from nearly 30 companies. Aline Plançon of Interpol, who was part of the Interpol-World Health Organization anti-counterfeiting project known as IMPACT, has been named sub-director of the new pharmaceutical crime programme. She said those involved in these crimes have also been linked to money laundering, pornography and online gambling. As to the increasing partnerships, she said, “There is enough work for everyone.”

Plançon later described progress being made, but said there is “great frustration” with the lack of prosecutions and problems with judiciaries. Plus, she said, “Criminals are moving fast, and are richer and richer, which doesn’t make life easier.”

Meanwhile, an Interpol initiative called PANGEA 5 led to more than 18,000 website takedowns, removal of 45,000 ads, and netted 4 million units of products, Noble said. And a programme called I-Checkit will allow consumers to scan and verify products before buying them. A database is being planned for luxury goods, he said.

Interpol is embracing public-private partnerships (PPPs), said Noble, because governments have limited ability to help with funding and the private sector is “ready to help.” He insisted that the PPP programme is open and transparent, and companies are given no right to interfere with the way Interpol works or compromise its neutrality, in line with its internal processes.

The leaders of those three sponsoring organisations were joined on the panel by representatives of two industry groups, the International Chamber of Commerce Business Action to Stop Counterfeiting and Piracy (ICC/BASCAP), and the International Trademark Association (INTA). The five also held a press conference after speaking.

INTA President Toe Su Aung highlighted initiatives, such as the revision of the European Union customs regulations, and helping Myanmar to institute strong anticounterfeiting measures. She said there is a misperception that IP is “only for big companies in rich countries.” She said neither government nor industry have found perfect solutions for various reasons such as financial resources.

One of the targets of several initiatives mentioned at the congress are children. For instance, INTA is targeting 14-18 year old schoolchildren in the United States, the president said. Another speaker said their group is targeting very young children, in a softened way, by asking them how do they feel when someone copies from them, and how would they feel if their “Daddy does it.”

Generally, speakers throughout the first day referred frequently about the need to protect or educate consumers. But there were no representatives of consumers on the stage nor any indication of what consumer representatives themselves might contribute to the strategy. This might have been seen as surprising by some in the aftermath of recent strong public reactions against government anti-counterfeiting and anti-piracy efforts such as the Anti-Counterfeiting Trade Agreement (ACTA).

Shelley Duggan, co-chair of the ICC/BASCAP and associate general counsel for brand protection at Procter & Gamble, said strengthening the IP regime should be seen not as a cost but as an investment. She said now is the time to increase efforts and answer critics. There is an increasing presence of international crime networks, she said, because “IP crime is a lucrative and growing business.”

Organised crime uses these profits for other illegal purposes like corruption, she said. Iskari Fute, legal counsel for the Tanzania Food and Drugs Authority, said it is important to confiscate the money in cases. If not, through corruption, it will be the same money that will get the criminal free (through payoffs). Fute called for African legislation to address electronic transactions, not just paper-based ones.

Representatives of China and Hong Kong, the biggest origin of counterfeit products, had only positive things to say about efforts there to stop counterfeiting, showing films and giving positive statistics.

Another area of increased focus is on the shipping intermediaries, like UPS, FedEx, DHL and the postal service. It has become increasingly found that criminal are using their services to ship counterfeit products, sometimes in subtle ways like sending the fake marks in one shipment and the fake components or ingredients in another. The shipping companies, which are presumably paid for the shipments, have taken the view that it is not their legal responsibility but would like to be cooperative within the law.

William New may be reached at wnew@ip-watch.ch.

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