India: IP CRIME: "Rising Threats To Intellectual Property Rights"


In today's era, Indian economy relies upon the Intellectual property (IP) to drive economic growth at a fast pace. Every company is now understanding the need of IP, R&D is being taken recourse to extensively, foreign brands are entering the market and high rate of FDI is being witnessed in the Sector. In spite of the undeniable benefits, Indian economy is facing a serious problem which one is seriously taking note of, a problem which is slowly hampering the root of the country's economy. Taking examples from every day life of which we are all aware viz. fake watches, stamps, cigarettes, cosmetics, pharmaceuticals, FMCG products, auto components, software, music, movies etc which is resulting in significant loss to companies & their rightful owners corresponding evasion of tax duties and violation of the rights of the consumer. This article mainly emphasized on IP crime issues and the related factors contributing to the growth of IP crime and India's view on IP crime .


World Health Organisation (WHO) states that approximately 10 per cent of all pharmaceutical drugs in the world are counterfeit, rising to 60 per cent in certain poor and developing nations.1 According to a report the daily sale of particular brand of Scotch whisky is greater than its monthly worldwide sales. It can only be possible if the real bottles have counterfeit liquor in them which makes the sale at a very alarming rate. Due to this reason the empty bottles of this particular brand have a major resale value of 250 rupees each (approximately 4 US dollars)2. Some of the following impacts of IP crime are as follows :

  • Heavy loss to the industry because of pirated and counterfeit goods.
  • Major loss of taxes to the government.
  • The real owners and creators of IP from different countries and technology are not remunerated.
  • The real loss to the consumer as he gets poor value for money or may be feel cheated when suffer from this IP crime.
  • Due to this IP crime , the overall growth of the industry lacks behind and results in severe loss to business or IP related investment coming into the country.

Nowadays, markets are full of counterfeit products with every person using counterfeit products and that has resulted in a flood of spurious products into the market for example viz . brand names, logo, trademarks depicting on apparels which are easily available on streets or in local markets in India clearly shows a wide example of IP CRIME. According to the recent studies by Industry association i.e The Confederation of Indian Industry (CII) estimates that the FMCG sector loses approximately 15% of its revenue to counterfeit goods with several top brands losing up to 30% of their business due to IP crime.3 Deputy M.D., Tata Tea informed that 65% of total tea sold, is sold as loose tea, which has some form or other of tampering done to it, Food grade color is added to husk and this mixed with loose tea. Some tea bags are even rebagged. A G.M, Legal Affairs HUL, explained how "Fair and Lovely" became "Flair and Lovely" and spawned another 123 copies of this popular product. He opined that destruction of spurious stocks has not solved the menace; only vigilant consumer could tackle this problem. PepsiCo expert while sharing his concern informed that lakhs of bottles of Pepsi are counterfeited. Either spurious drinks are rebottled in authentic Pepsi bottles or the drinks are sold under the similar sounding names. "In a case study in Rajasthan he announced there were 65 factories selling over 40 spurious brands.4

The nature of the crime, its size, diversity and scope has hindered the task of coordinating a dynamic response. The mere lack of consumer awareness and high advancement of technology are the major factors which encourage counterfeiting problems which is further fuelled by tax enforcement laws which make things easy for counterfeiter. The continuity of socio-economic growth and industrial competitiveness depends upon high level of IP protection and enforcement raising profound concerns of the rapidly growing piracy of IP rights and production of counterfeit goods.


Ideally, IP crime is synonymous with Piracy and Counterfeiting acts. As counterfeiting is willful trademark infringement, whereas piracy involves, willful copyright infringement. In respect of terms they are very much similar and overlapping crimes. On the other hand IP crime is not a new phenomenon but due to advance globalization around us and future technology the counterfeiting and piracy has become big business in India and around countries.5 During recent years the future and scale of the issue has grown at a very high rate. In india the counterfeit traders with whom most people come into contact are small-scale operators or street vendors. However, such vendors are only the small & front face of much wider and more sophisticated networks which indulge in vast IP crimes. Extensive evidence is now available which demonstrates that organized criminals and terrorists are heavily involved in planning and committing intellectual property related crimes. A very vast network is now working with an international links in our country who not only kills the IP but also enlarge the crime network in the country. On the other hand if one talks about online piracy which is facilitated by increases in transmission speeds, faster connections enable users to send and download larger files (such as software programs) more quickly for example online download of songs & movies from torrents website and pk songs before their release in to the market. Without strong online copyright laws and enforcement of those laws, online piracy via spam, auction sites and P2P systems will continue to grow alongside increases in Internet usage6.

Counterfeiting is becoming a menace as the laws to tackle it are weak and fragile and if any culprit gets caught in such case then, he gets released on some small penalty that facilitates further the commission of more such offences as the punishment levelled therein is not really a deterrent. Their are definitely no "major" or "minor" counterfeits. Counterfeiting is a serious offence on a plane level with trafficking in weapons or drugs.7 In India counterfeiting and piracy have emerged as clear and serious threats to business, consumers and union of India. It is obviously a breach of consumer affairs, health, trade, and employment law.8

In India judiciary is not equipped to deal with the cases on a speedy basis. In certain industries there are thousands of cases registered in various courts of India but due to a massive backlog they are just gathering dust. Moreover some cases are not even been heard by the courts. On the other hand serious shortage of experienced lawyers in the country affects the IP crime and those having knowledge ask for such high demand which can only be afforded by big companies. Lack of knowledge and awareness is also the main concern for the growth of IP crime in India.

Today industries who are direct competitors with counterfeiters suffer a direct loss in sales. There are also places in country which are more dominated by counterfeiters mafia, creating barriers of entry for the producers of the genuine product. Many counterfeit products today are of higher quality and compete directly with the genuine items for example, DVD's, Software, mobile accessories. In addition, consumers who are believed that they bought a genuine article when it was in fact a fake, finally blame the manufacturer of the genuine product when it fails, creating a loss of brand name and good will of that company. Sometimes cheaper and obvious products that are bought in good faith represent a serious threat to the company that wants its brands associated with quality and exclusivity for example counterfeit audio CD's have very bad quality of music which make impact in the customer's mind that the original song was like this only. Keeping aside the direct loss of huge sales and goodwill, one should not forget the expenditure involved in protecting and enforcing intellectual property rights. The right owner have to pay a lot money to make the product and if the the counterfeit occurs right owner involved in costly investigations and litigation and may also have to spend further sums on product protection. The amount not only related to specific department or litigation and investigation but spans across several departments such as marketing, human resources, product development and legal departments.9 A single counterfeit product can infringe any or all, of the main intellectual property rights, viz. trademarks, patents, designs and copyrights.


India is the biggest market for the counterfeit mafia. These mafia holds a very strong base in the country. India globally is perceived as country that doesn't provide adequate IPR protection or enforcement of laws to protect IPR. However if we visualize the international report the admitted experience of IP crime in India is lower than in Asia-Pacific region and globally.10 As according to the US, India does not have a separate legislation to address counterfeiting cases, it offers statutory remedies, both civil and criminal11 which are embodied in the new Trademarks Act of 1999, The Copyright Act, 1957, The Patents Act 1970, The Designs Act 2000, The Geographical Indications of Goods (Registration and Protection) Act 1999. In recent fiscal years, the government has made vibrant changes to their IP laws and more amendments are awaiting in the anvil, including change in IP and Customs laws to implement border control measures as required by the TRIPs Agreement. In the protection realm of the IP Sector, India has signed Customs Mutual Assistance Agreement with most of its major trade partners including European Union & US which helps in establishing formal guidelines which allow officials to share intelligence and investigative data relating to IP violations. Considering the judicial side, in the last five years the Indian courts have taken a more stronger approach to counterfeiting cases. Fair judgments are being given by the courts which helps in making amendments in IP laws. Lobbying by various brand owners, associations and well defined law firms have resulted in increased awareness and a greater understanding of IP issues among law enforcement authorities.12


It is now believed that as the IP crime graph is increasing day by day in India, this rapid unchecked growth needs to be regulated. More number of new reforms are to be made and awareness programmes are to be organized. Being a organized crime this would go to a new heights where counterfeit mafia are working at a very strong base. More steps are to be taken in finding ways to successfully combat it is an international challenge, and demands the participation not only of companies, but also members of the world's law enforcement agencies, and governments around the world. Each of these groups has a critical role to play if this challenge is to be met. India has already been prompt in taking remedial measures like Customs Mutual Assistance Agreement, Trademark Amendment Act , Copyright Amendment and it is hoped that the culmination of all the said factors together heralds in a new era of IP Control and Regulation.


1. Retrieved from j.1758-5899.2010.00023.x/pdf on 17th May, 2014

2. Ibid

3. In order to strengthen further the enforcement of IPR in a focused manner, an Alliance in the name of CII Alliance for Anti- Counterfeiting/Piracy was formed with the leadership and initiatives of Indian industry and right holders who are affected by the counterfeiting/piracy menace in 2004.

4. CII study report on Anti-Counterfeit Packaging Technologies A strategic need for the Indian industry

5. COUNTER OFFENSIVE: An IP Crime Strategy, a DTI service of the United Kingdom Patent Office DDU/93/IPID/7-04.

6. PIRACY STUDY: First Annual BSA and IDC Global Software Piracy Study, July 04. Business Software Alliance,

7. D. Nazat, "The counterfeiting of toys", International Criminal Police Review, No. 464, 1997.

8. COUNTERFEITING & ORGANISED CRIME, Union des Fabricants Pour La Protection International De La Propriete Industrielle Et Artistique 2003

9. The Economic Impact of Counterfeiting, Organisation for Economic Co-operation and Development, 1998.

10. Global Economic Crime Survey: India, Pricewaterhouse Coopers 2003.

11. How to tackle counterfeiting in India, Ranjan Narula & Taj Kunwar Paul Rouse & Co International, Managing Intellectual Property, Euromoney Institutional Investor plc, February 2004.

12. Supra at 12

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions