ITU Looks Into Issues Of Counterfeit, Substandard ICT Products

This week, the International Telecommunication Union is holding an event highlighting the UN agency’s entry into what it describes as the growing problem of counterfeit and fake information and communication technology (ICT) products. Officials from the neighbouring World Intellectual Property Organization and World Trade Organization remarked during the meeting that counterfeit relates to an intellectual property right infringement, which is a different issue from substandard products.

The ITU event on “combating counterfeit and substandard ICT devices,” is being held from 17-18 November, and aimed “to discuss the global scope and impact of counterfeiting and substandard ICT products on various stakeholders; highlight the common concerns, challenges, initiatives, and opportunities of the various stakeholders in their fight against counterfeiting and substandard ICT products; and examine the possible role of ICT standards development organisations and in particular the ITU, as part of the global strategy and solutions to curtail counterfeiting and substandard ICT products,” according to the ITU.

ITU’s New Area of Work

In his opening speech, Brahima Sanou, director, ITU Telecommunication Development Bureau, said it is the first time ITU has hosted an event on this topic. It is the first step in the ITU’s long-term engagement in this area, he said, adding that counterfeiting is a growing problem which needs immediate action.

Sanou said that in April, during the World Telecommunication Development Conference in Dubai, a resolution was taken (Resolution 79) on the role of telecommunications/information and communication technologies in combating and dealing with counterfeit telecommunication/information and communication devices.

Resolution 79 was reinforced in November by the adoption of a new resolution “Combating counterfeit telecommunication/ICT devices,” taken by the recent ITU Plenipotentiary Conference of in Busan, South Korea.

These resolutions, Sanou said, “instruct us to enter in the mine field of counterfeiting and stand up for the interest of the ITC sector,” he said, adding that these resolutions apply to the three areas of work of the ITU for the next four years, “and likely beyond.”

According to the ITU, its three main areas of work are radiocommunications, standardisation, and development.

Counterfeit = Trademark Violation

On a 17 November panel on intergovernmental initiatives against counterfeit and substandard ICT products, Louise Van Greunen, director of the WIPO Building Respect for IP Division, said the definition of counterfeit products should be clear. In the WTO and WIPO context, she said, it relates to trademarks infringement and “it is really important to make the difference” between a counterfeit and a substandard product.

Roger Kampf, counsellor, WTO IP Division, also said it is important to have a clear understanding of what counterfeit means. Under Article 51 (Suspension of Release by Customs Authorities), footnote 14(a) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) [pdf], a counterfeit trademark goods “shall mean any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation.”

Counterfeit trademark goods are distinct from other forms of trademark infringements, he said. He described “ordinary trademark infringement” as goods for which the infringer’s mark is sufficiently close to the registered mark, and leads to likelihood of confusion.

Robert Kahn, president and CEO of Corporation for National Research Initiatives and a “father of the internet”, the event keynote speaker, said the focus on counterfeit ICT devices is just one subset of a broader topic. He said unique persistent identifiers (UPIs) are essential to prevent counterfeiting.

Managing supply chains is another key element, he said, adding that ICT devices could be mobile phones but also airplanes and automobiles. UPIs can provide the provenance of a device. It can provide a description of the device, its component, relevant details about software that makes the device operate, and where the particular device is in the supply chain, he explained.

Countries Experiences

Isaac Boateng, manager, Regulatory Administration, Ghana National Communication Authority, said mobile phones are the most popular IT device used in Ghana, including for other services than making phone calls, such as internet browsing, video calling and money transfer.

However, the increased demand for mobile phones has resulted in the rise in counterfeit handsets, he said, including batteries and accessories. Counterfeits have a number of functionalities, he added, they are affordable and can be bought on the street.

People are ignorant of the effects of counterfeit phones, he said, including health risks and environmental problems linked to the disposal of electronic waste. It is estimated that in Ghana, about 60 percent of handsets on the market have either no International Mobile Station Equipment Identity (IMEI) numbers, or replicated IMEI, he said. The main interest of users is to communicate with friends and relatives, he said.

He described measures taken by Ghana, including the “type approval process to combat counterfeit,” which requires proof from a manufacturer that a product has the essential minimum technical and regulatory requirements.

Challenges met by the country are numerous, he said, and include porous ports of entry and un-approved routes. He also mentioned the affordability of quality devices, and said it is the main reason for buying counterfeits, and added that counterfeiters “contribute to the high mobile phone penetration and universal service and access, particularly in developing countries.”

Dmytro Protsenko, deputy director, Radio Service Directorate, Ukraine State Centre for Radio Frequencies, also commented on the negative impacts of counterfeit and substandard ICT products, such as the loss of revenue due to the non-payment of custom duties. He also said that those products present a danger to public security, as well as low reliability, failed warranty and technical support, and potential hazard to health and privacy issues.

He said all regions of the world are affected, particularly the Asia-Pacific. He gave a number of examples of countries having implemented measures to fight counterfeit and substandard ICT products, such as Ukraine, Azerbaijan, Colombia, Egypt, India, Uganda, and Kenya.

Some of those countries have established databases for International Mobile Station Equipment Identity (IMEI) numbers to track fake IMEI, or cell phones missing IMEI. Some of those countries worked with customs authorities to stop the importation of counterfeit and substandard ICT devices.

Ahmad Al Shamsi, manager, Type Approval, United Arab Emirates Telecommunications Regulatory Authority (TRA), said consumers are concerned about their privacy as some counterfeit phones include applications for collecting information about their users.

Like several other speakers, he underlined the need for effective policies and procedures, and the necessary collaboration with the private sector and other governments. He also underlined the need for awareness-raising, a common theme of speakers.

João Zanon, regulatory specialist, Regulatory and Planning Superintendence, Brazil Agência Nacional de Telecomunicações, said the country has a system to control counterfeit, cloned and unauthorised mobile devices. The system, called “Sistema Integrado de Gestão de Aparelhos” (SIGA), ensures that operators can only allow authorised devices on the network, he said.

David Rogers, Mobile Technology, Cyber Security & Standards, United Kingdom Department for Business, Innovation & Skills, said facilitating affordable products is part of the solution, as well as a strong focus on the counterfeit products sources. It is essential that the privacy of end users be respected, he said.

WIPO, WTO, EU, OECD, WCO

Van Greunen of WIPO said there is a public demand for counterfeit or fake products, although purchasers come in different types. She classified purchasers in five categories: happy purchasers, innocent purchasers, Robin Hoods, genuinely frustrated and struggling consumers.

She described WIPO activities in the Advisory Committee on Enforcement (ACE), and noted WIPO’s awareness and outreach campaigns, including the WIPO Guide to Intellectual Property Outreach.

Van Greunen also said that WIPO is involved in the Global Congress on Counterfeiting and Piracy, which gathers WIPO, the World Customs Organization, Interpol and the private sector, she said.

Jean Bergevin, head of the Fight Against Counterfeiting and Piracy Unit, Intellectual Property Directorate, European Commission, talked about the 1 July EU Action Plan “Towards a renewed consensus on the enforcement of IPR.”

He said a holistic approach is needed as well as preventive steps. “You can have the best legal system, it will not get very far if the demand is there,” he said.

The action plan, said Bergevin, includes the integrity of supply chains, in particular making sure that supply chains follow conformity assessments. It also includes a “following the money” action, by which the EU is talking to payment service providers, and “advertising ecosystems” to look at what can be done.

“There is no silver bullet solution,” he said, but consumer rights and privacy are key, and unless there is an international approach to the problem “it will never work,” he said.

WTO’s Kampf mentioned two disputes at the WTO against the EU, brought by India (WT/DS408/1) and Brazil (WT/DS/409/1), after some generic drugs in transit were seized by customs authorities in Europe in 2009 (IPW, Public Health, 5 June 2009) Both case are still pending, he said. After consultations about four years ago, the cases have basically been dormant.

The issue of counterfeit drugs and fake or substandard medicines has long been debated at the World Health Organization. At WHO, developing countries sought to clarify that “counterfeit” relates to an IP right violation, which is different from a fake or spurious medicine, and therefore not technically a public health issue. The current WHO definition of the issues is substandard/spurious/falsely-labelled/falsified/counterfeit medical products (SSFFC).

The TRIPS agreement can contribute in the fight against counterfeit ICT equipment, Kampf said, but not to combat substandard ICT equipment, he said.

Piotr Stryszowski, economist, Directorate for Science Technology and Industry, Organisation for Economic Co-operation and Development (OECD), described research at the OECD on counterfeit and pirated products.

The goal of OECD studies is to assess the magnitude of the problem, he said, and in particular to study the effects of counterfeiting and piracy, and determine the relevant policy conclusions.

Data is hard to find, said Stryszowski, since activities are illicit, and existing data is sparse, incomplete and inconsistent. However, the OECD found that up to US$ 250 billion of international trade could have been in counterfeit or pirated products in 2007, and the phenomenon is growing.

Samantha Gompel, communication manager, IPR and Health & Safety Programme, World Customs Organization (WCO), presented the WCO’s awareness-raising and capacity-building activities.

She said WCO conducts operations. An example was Operation BIYELA, which took place in 23 African countries over a period of 10 days and led to the seizure of over US$ 1 billion worth of counterfeit goods, half of which were counterfeit medicines, and 40 percent electronic appliances.

The result of this particular operation encouraged some of the countries to take particular measures, such as Senegal revising its IP legal framework, or Nigeria creating a dedicated IP rights department, she said.

No Consumer Organisations Participating?

The second day of the meeting is dedicated to the corporate perspective on the issue, according to the programme, including Microsoft, Cisco Systems, and the International Federation of Pharmaceutical Manufacturers & Associations.

A developing country source said the consumer perspective is missing from the event.

A source from the Third World Network told Intellectual Property Watch, that a stringent fight against counterfeit ICT products creates technological dependency and could scuttle efforts of developing countries to develop manufacturing capabilities. He also said there is no empirical evidence that counterfeit products compromise safety and security.

Speaker presentations can be found in the programme of the event.

 

Image Credits: Catherine Saez