- Well-known brands have mushroomed in recent years {well known brand means a mark which have acquired reputation not only in the country where it originates but also gained goodwill world wide and referred to as Trans-border reputation}.
- Easy for unscrupulous persons to make quick gains by piggy backing on someone’s reputation.
Impact Of The Counterfeiting /Passing Off
Worldwide it is a big menace and a direct loss of business to the tune of 500 billion U.S.Dollars. In India the direct loss to FMCG industry is also not less than Rs. 200 million. In India a survey was conducted to estimate the size of counterfeit of FMCG products and the survey revealed the stark reality that FMCG companies having maximum loss upto 40% and an average loss around 20% of their market share of their well known products. Masquerading products result into the consequences set out as under: -
- Provides marginal dent to the revenue collection to the Government;
- Consumer is the main victim since not able to gets right product;
- legitimate industries suffer - illegitimate organised activities flourish;
- dilution of brand value – since third rate products come in the guise of well known brands;
- Snowballing effect on other areas.
In order to counter the aforesaid activities, it has become a need of the hour that Industry should join hands and strives hard to achieve the amongst other the following objectives: -
- free trade must be free with a combination of what is ethical and legal.
- to combat the commercial theft since large number of factors goes into a brand building.
- Unscrupulous persons pocketing something which belongs to someone else and also piggybacking on someone else’s reputation.
- to bring awareness amongst society since these counterfeit products deceive the gullible consumers, as the consumer does not have a deep eye to differentiate between the original vis-a-vis counterfeit.
Difficulty In Combating Aforesaid Menance: -
- Police and other administrative authorities have their own priorities and they consider such type of offences as petty crimes.
- lack of political will
- low consumer awareness
- law enforcement is weak
- unscrupulous operators may have political protection
- unscrupulous fly- by- night operators operate in small rooms and in a position to clean up everything on receiving prior intimation.
Need For A Paradigm Shift
Indian Government and other statutory bodies should take active interest for the protection of legitimate business and provide whole- hearted support to the Industry at large by considering following suggestions for making an amendment in the Trademark law: -
- make counterfeit or look alike a cognizable offence.
- impose minimum damages of Rs. 2.00 million or value of goods seized whichever is higher.
- the damages so awarded should be deposited in the Consumer Welfare Fund and should be utilized for anti-counterfeit activities and consumer awareness programs.
- suspension of license of spurious product manufacturer;
- expulsion from Trade Associations
- extensive publicity of offender’s name in various media.
- involvement of Excise Department and other statutory bodies at the time of raids.
- harmonisation of specific sections of Drugs & Cosmetics Act, 1940 to include the definition of counterfeit and fake.
Intiatives By Fmcg Companies In India
A joint effort is made by FICCI and the leading FMCG Companies to bring all companies together to initiate a war against such menace. It is a Brand Protection Committee (BPC) and the foremost objectives amongst other are mainly as under: -
- trade channels must be free with a combination of what is ethical and legal.
- to combat the commercial theft since large number of factors goes into a brand building.
- unscrupulous persons pocketing something which belongs to someone else and also piggybacking on someone else’s reputation.
- to bring awareness amongst society since these counterfeit products deceive the gullible consumers as the consumer does not have a deep eye to differentiate between the original vis-à-vis counterfeit.
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