IP Enforcement Extravaganza Assails Consequences Of Counterfeits

PARIS – Counterfeiting and piracy are on the pillory at the annual event organised by three intergovernmental agencies fighting intellectual property rights infringement.

Much of the emphasis of this year’s event is being placed on the danger to the consumers and the economic consequences of infringement as well as on the necessity of enforcement measures. But some developing country delegates present at the event raised concern that the event might not be taking their concerns sufficiently into account.

The Sixth Global Congress on Combating Counterfeiting and Piracy is taking place in Paris from 2-3 February. It is organised by the World Intellectual Property Organization, the World Customs Organization, and Interpol. Close to 900 participants from over 100 countries are attending the meeting, according to organisers, most of them from intergovernmental organisations, governments, business, and enforcement agencies.

Francis Gurry, director general of WIPO, said counterfeiting results from disruptive change, in particular the transition to the knowledge economy and a much greater emphasis on intangible assets, than tangible assets.

However, he said, there is not widespread consciousness of the importance of intangible assets. The shift to a knowledge economy, and in particular internet, with the introduction of a new supply chain brought “great” structural changes and new business models. The opportunity for piracy was created by this disruptive change, Gurry said.

“Before we do anything else, we have to transmit the message” of the value of human creation and innovation, he said, repeating his mantra that it is necessary to build “respect” of IP.

The issue of counterfeiting and piracy is not a “North versus South” issue, Gurry said, but a global problem. It “occurs in all countries of the world” and the damages caused are felt in all countries of the world, he said, “certainly not only in developed countries.”

But several developing country delegates attending the congress expressed reservations about the “one-sidedness” of the event, the lack of perspective from developing countries, the absence of civil society, and some put into question the role of WIPO as a member-driven organisation needing to represent the voice of all members.

For Ronald Noble, secretary general of Interpol, IP infringement causes significant loss of profit and is manned by transnational corporations involved in transnational crime. He described counterfeiting as a “deadly activity,” and said a whole range of products are counterfeited, such as medical products, beverages, car parts, construction material, food and cosmetics.

Noble said tangible results had been yielded by collaborative efforts, including rising enforcement in developing countries, and internet monitoring. But, “we can’t afford to rest on our successes,” he said.

Noble announced the opening on 2 February of the International IP Crime Investigator’s College. The college is an interactive online training programme destined to law enforcement, regulatory authorities, and private sector IP crime investigators, Noble said.

Kunio Mikuriya, secretary general of the World Customs Organization, said counterfeiting and piracy are not harmless activities and bring casualties. He called for global action playing to all actors’ competences.

Mikuriya said the strategic position of the customs body at all borders makes it a prime actor in the fight against counterfeiting and piracy. He announced a new training tool to help customs officials to identify counterfeit products. The Interface Public Members, which was set up with manufacturers is an online database that allows rights holders to input information about their products that would allow customs officials to tell between a genuine products from a fake, he said. According to Mikuriya, some 70 customs agencies have expressed their interest in this new tool.

According to Jeffrey Hardy, coordinator of the Business Action to Stop Counterfeiting and Piracy (BASCAP), an International Chamber of Commerce (ICC) entity, “IP protection is still not a priority for some governments in the world.” Not enough is being done by governments, he said, although BASCAP recognises that the fight against IP infringement is not solely the responsibility of governments, as business “has a significant role to play.”

According to Gurry, it appears that IP rights are not the highest priority for some governments but that global issues such as climate change and food security can only be addressed through innovation, and IP is an important innovation mechanism, the protection of IP will enter into the thinking of governments around the world, he said.

Staggering Numbers

The ICC published a report today and presented the results at the congress. It claimed a staggering US$ 1.7 trillion by 2015 in global economic and social impacts of counterfeiting and piracy and 2.5 million legitimate jobs would be potentially lost each year.

During a session on determining the impact of counterfeiting, David Cooper, director of the anti-counterfeit programme for Hewlett Packard, said the information technology and printing supplies industry faced a multi-billion dollar counterfeiting opportunity.

“If we make it, they fake it,” he said, adding that counterfeit products presented environmental hazards, security issues and public health problems for the workers in this illegal industry.

Hardy also said a potential 700,000 reported deaths followed the administration of counterfeit malaria and tuberculosis drugs.

Kofi Essuman, member of the Ghana-based Coalition Against Counterfeiting and Illicit Trade, said that while about 10 percent of drugs globally are counterfeits, this number is closer to 30 or 40 percent in Africa.

Another study presented by Patrice Geoffron, an economics professor at French Dauphine University, showed the piracy losses in a “file sharing” trend scenario reaching 10 billion euros in retail losses and 186,600 cumulative job losses. If current policies do not change, he said, in 2015, according to the same scenario, the retail losses will reach 32 billion euros and 611,300 lost jobs.

Carsten Fink, chief economist at WIPO, said that counterfeit medicines are such a large problem in Africa because of scarce resources leading governments to make choices based on priority. The economic effects of IP infringement differ across IP rights and industries, and there is a need for evidence to define policy priorities, he said.

According to Fink, there is a need for more detailed studies on the economic effects of counterfeiting. An important distinction should be made between given levels of illicit activities and the effects of changes in those levels of illicit activities, he said.

Two types of data are important, Fink said: Data on prices, quantities of genuine and fake goods, and other relevant economic variables, and the estimates of behavioural parameters.

Getting quality data is a challenge, he said, as counterfeiting mostly evades official statistics recording, although some data is reported by right holders, customs, and domestic law enforcement activity. “But we probably can do better,” he said. The depth and comparability of official statistics have to be improved, and the transparency of rights holders’ data needs to increase, he said.

“We know we need better data and better methodology,” Hardy concurred.

John Morton, director of US immigration and customs enforcement said IP is a high priority in the US at the moment. “People are going to jail on a regular basis in the US on IP violation charges,” he said. He said the administration seized 10 domain names yesterday on unauthorised streaming of sports events charges.

Aline Plançon, manager of the Interpol Medical Product Counterfeiting and Pharmaceutical Crime Unit, said counterfeit medicines are “silent killers,” as victims were unaware of the fact they are using counterfeit drugs and underlined the importance of building public awareness. She also warned against “political controversy” that is undermining technical work.

Michael Deats, group manager for enforcement and intelligence at the Medicines and Healthcare Products Regulatory Agency in the UK, said the internet gives counterfeiting medicine a global market and encourages patient self-prescription. In developed countries, counterfeits target lifestyle medicines and non-communicable diseases like cancer or heart diseases, he said. Counterfeit drugs are a public health issue in terms of harm caused to patients but also because it they undermine the public confidence in the supply chain, he added.

Most speakers at the congress called for increased collaboration between governments and industry, and the necessity to raise the public awareness.