India: Biggest Threat To Intellectual Property: Counterfeiting With Special Focus On Fashion Industry

Last Updated: 24 June 2019
Article by Purnashri Das

IP rights are proprietary rights granted to protect original products of creation. They are intended to encourage and reward creativity and fair competition in the marketplace. IP rights can be relied upon to prevent others from using one's trademark, patented invention, copyright work, or design without consent. IP is territorial in nature and exists for set periods of time.

The marvel of Counterfeiting of products can be characterized as where the packaging of a trademark has been imitated without the approval of the real trademark rights holder, and the imitation of packaging is of such a nature which can't distinguish the essential feature of the merchandise itself from the genuine one. Fake products likewise incorporate packaging materials, stickers, handouts and directions despite the fact that these are introduced independently from the merchandise themselves. Counterfeiting also referred to as the act of copying brands. Even if this is a phenomenon that we can find in every sector, some of the most counterfeited industries are fashion and cosmetics. Not only in the packaging, but sometimes the trademark is copied on the clothes too. Example would be Gucci and Forever 21 case.

Some examples of intellectual property right violations are the fabrication or selling of illegally manufactured counterfeit versions of products protected by a trademark (sunglasses, clothing, sports goods, etc.), pharmaceutical products, designer furniture, seeds, software, DVD players, music players and films and other protected works. In principle, any product sold today is a potential victim of counterfeiting. Counterfeits are not limited to luxury products. Even toothpaste and shampoo as well as washing powders and dishwashing products are counterfeited on a commercial scale. The shadowy business of counterfeits has taken over the globe to become a $1.2-plus trillion industry. Despite extensive and often, expensive enforcement efforts by many brands, the international trade in counterfeit goods, ranging from food and dietary supplements to handbags and luxury cars, is positively booming. The market for counterfeit goods is vast and also diverse when considering the types of products that are being replicated and sold. The Trademark Act,1999 nowhere specifically mentions the term "counterfeit", however the Act provides for civil remedies in the form of injunction, damages, delivery-up, anton pillar and john doe orders under Relief in suit for infringement under Section 135 of Trademark Act. The Act also provides for criminal remedies. It provides provision in the event of falsifying or falsely applying for a trademark under Section 102 and 103 of the Act.

If we see the trend, mostly big fashion houses like Gucci, Prada, Adidas etc are targeted by counterfeiters. The reason for this can be the fact that the fashion industry is dictated by ever changing trends; something that's may be in trend today can be old fashioned tomorrow. As a result, fashion brands have to constantly reinvent themselves. If we combine this with the image-based, shopping-savvy society that we live on, obsessed with trends but also with saving, where customers hunt for the perfect balance between trend and price we get the ideal breeding ground for counterfeiting. Yes it is true that Counterfeiting has increased because of the consumers who buy such products as they want to stay in trend by buying from big fashion houses and also want that it does not make a hole into their pockets. That is why the majority of the industry is of the opinion that counterfeiting is theft and those who buy counterfeit product are responsible for fueling criminal activity. For Ashlee Froese, partner at Gilbert's LLP, "Counterfeiting is stealing the greatest asset a designer has and that is creativity. That is their main asset, their main product."

The world of fashion is one that is as competitive as any industry can get. Once a design is stolen, the fashion house could lose an entire season because then people would be buying the counterfeited products for reasons like it would be cheap or just because the consumers can get confused. The fashion industry is one that protects imagination & creativity because fashion relies heavily on the creativity of its designers. If a precious idea born out of creativity is stolen, then the original fashion house could lose millions of dollars. Some countries do better than others to protect the intellectual property rights, and some countries make no effort to curb any stealing and copying, which deeply impacts the designers. Counterfeits come from a violation of intellectual property rights like trademark or copyright, with people all over the world buying counterfeit products or "fakes''. To some, the counterfeiting of luxury fashion does not seem like a big deal. It is the harmless copying of products that just allows people who cannot own a name brand the opportunity to have that status symbol. In general, intellectual property rights for the fashion industry are one of the most important parts of how the industry functions, especially for the luxury fashion industry. Intellectual property rights as defined by the US government "encompass four separate and distinct types of intangible property – namely, patents, trademarks, copyrights, and trade secrets, which collectively are referred to as 'intellectual property'" (United States Embassy, 2005). With the fashion industry, the main parts that are violated would be trademarks and copyrights. With the production of counterfeits, it is the theft of trademarks because counterfeits are copying the logo and attempting to pass off something that is not from the original brand or fashion house.

So, we see that fashion industry is mostly affected by Counterfeiting of their products. This leads to loss of revenue for them as consumers get the counterfeited products at cheap price and sometimes they also get confused that what is the original product.

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