Pakistan: Anti-Terror Crackdown Brings IPR Relief To Mobile Phone Brands

A recent drive against the use of mobile phones without valid International Mobile Equipment Identity (IMEI) numbers in terrorism-struck Pakistan has given respite to established brands and authorised dealers. The proliferation of copied and smuggled cell phones in the country, with little intellectual property rights enforcement, had resulted in a decrease in their sales volumes, industry representatives said.

In addition, the government is moving to restore an intellectual property law that industry thinks could help its efforts.

The government plans to ban import and sale of copied and smuggled mobile phones, and the telecom sector is hopeful this will result in increased demand for the genuine ones.

The state machinery began mulling the mobile phone action when national law enforcement agencies announced their inability to track criminals and terrorists using mobile phones without IMEI numbers for their communications. This unique 15-digit code helps law enforcers identify suspicious callers even if they change their SIMs after making the calls.

Representatives of branded mobile phones have welcomed the move and termed it beneficial for legitimate businesses and the country’s economy.

Nokia Communications Manager for Pakistan and Afghanistan Adeel Hashmi told Intellectual Property Watch that Pakistan has a monthly demand of around 1.6 million handsets, of which Nokia’s share is between 150,000 to 200,000 handsets per month.

Seventy percent of market share belongs to cheap Chinese sets, of which many are with fake or no IMEI numbers. A whole shipment of mobile handsets may carry the same IMEI number, copied from a genuine one.

IMEI numbers are like fingerprints in the case of humans: no two handsets can have the same IMEI numbers. The Chinese manufacturers of cheap handsets cut costs by skipping IMEI-related programming in their products.

There’s a need to stop the influx of such handsets at the customs level, said Hashmi, who said it is known that people bring copied sets into the country in their suitcases from all over.

These cheap handsets have a ready demand as people think they bring down the cost of ownership.

“But they don’t realise these handsets don’t carry warranties and come without after-sale service offers,” said Hashmi, adding that Nokia has nine service centres and 400 collection points in the country. While branded sets are easily repaired, the copied and smuggled handsets have to be discarded even if there is a minor fault, he said.

Hashmi attributes the breakthrough on this front to the effort launched by the legal cell phone dealers and brand representatives, who stressed the point in meetings with government officials.

“Their action can curb terrorism and increase tax revenues through customs duties, both at the same time.”

The security agencies of the country mostly track suspicious callers through mobile phones as SIMs used by such personnel are unregistered or issued in some other person’s name without his or her knowledge. The Pakistan Telecommunication Authority (PTA) has asked all mobile phone subscribers and mobile phone companies to verify SIMs and block all those without credible antecedents.

Mobile phone importers, meanwhile, blame the PTA, the ministry for information technology and telecommunications and the interior ministry for not charting out rules in advance. Now, after millions of handsets have been imported to the country, they have realised the threat.

The importers believe the government followed a lax policy just to show exponential growth in the telecom sector to the world and attract more investment. The importers think the PTA. which was only interested in increasing numbers of subscribers, allowed mobile phone imports without type approval.

PTA Chairman Dr Muhammad Yasin acknowledges that currently there is no type approval of mobile handsets, and is hopeful a strategy will be in place soon. In a recent briefing with the media, he announced there were plans to ban IMEI-less handsets at the customs stage and impose a ban on their sale in the country, if someone succeeds in smuggling them into the country.

He disclosed that negotiations between local companies and Chinese manufacturers were underway to produce mobile phones in Pakistan. This way it will be easier to monitor the manufacturing process and bring down the prices which in turn will discourage imports from China, he said.

Absence of IP Law

The absence of functional intellectual property law is also a major reason for the proliferation of unauthorised or pirated products in the country. Back in 2005, a presidential ordinance was promulgated to set up the Intellectual Property Organisation Pakistan (IPO-Pakistan).

As per the constitution of Pakistan, presidential ordinances lapse after four months and have to be continually re-promulgated after that until they are made law through discussion and approval in both houses of Parliament. The IPO-Pakistan ordinance has not been promulgated since 31 March 2010.

Intazar Mehdi, a corporate lawyer based in Lahore, told Intellectual Property Watch that Article 89 of the constitution of Pakistan gives the president of the country to promulgate ordinances in specific conditions except when the National Assembly is in session.

“Passing an ordinance is a temporary arrangement whereas a law formed in result of an act of the Parliament is a workable and permanent solution,” he said. In that case, detailed discussions are held and the consent of both the upper and the lower houses is needed before the president gives the final approval.

He says it is an all-inclusive exercise that leaves little or no room for conflict, as all the stakeholders get a chance to give their input.

Mahdi said that currently authorities like Pakistan Customs, the Federal Investigation Agency (FIA) and the police act against IP rights violators under their own laws. They also gain strength from laws introduced by the British – the 1940 Trademarks Act, Patent Act 1911 and 1962 Copyright Act, he added.

Hamid Javaid, deputy director at IPO Pakistan, told Intellectual Property Watch that a draft bill on IP law is in its final stage. The draft will be presented in the Parliament for discussion. He said all stakeholders have been taken on board and asked to give their input to make the legislation effective and error-free.

Javaid said the prime minister has appointed a member of the national assembly, Hameed ullah Jan Afridi, as chairman of IPO Pakistan.

This appointment is very effective as he can present the case before the Parliament in a better way. This is because he’s a member of the parliament; a bureaucrat is not in a position to influence the legislature. He can also help form consensus on the bill among members from different political parties and independent members.

Being a signatory to international conventions to IP rights and placed high on the United States’ so-called Special 301 watch list of countries it deems to inadequately protect US IP rights, Pakistan is working on high priority to pass an IP law and get it enforced in its true spirit, Javaid said.