India: Combating Counterfeiting

Last Updated: 31 May 2017
Article by Omesh Puri

Parallel to the growth in innovation across many industries, counterfeiting has also increased and now affects all spheres of work, ranging from literary to musical, and all types of goods, ranging from agricultural to industrial. To combat this surge in counterfeiting, various remedies are available to rights holders under Indian law.

IP rights such as trademarks and copyright can be enforced through civil or criminal litigation, while designs and patents can be enforced only through civil litigation. The Trademarks Act punishes offences such as falsifying or falsely applying a trademark with imprisonment of between six months and three years and a fine of between Rs50,000 ($770) and Rs200,000 ($3,076). Similar search and seizure powers are available under the Copyright Act, which states that any police officer with the rank of at least sub-inspector can seize without warrant all copies of an infringing work and the plates used to make those copies if he or she is satisfied that a copyright infringement offence has been, is being or is likely to be committed.

Although the Trademarks Act allows criminal action, an opinion from the registrar of trademarks on the infringement is compulsory. Obtaining an opinion from the registrar is a lengthy process and generally delays the action. Therefore, a rights holder can file a complaint directly before the magistrate to conduct an investigation under Section 157(3) of the Criminal Procedure Code 1973. Obtaining and applying a court order can be a cumbersome procedure, which may also act as an obstacle to speedy anti-counterfeiting actions.

If trademarks or copyright are violated, rights holders should evaluate the pros and cons of civil and criminal action. Where a defendant can be easily identified and is based in an established market, rights holders are generally advised to adopt the civil route by filing an infringment suit before the competent court. The advantage of a civil suit is that the courts can grant an interim injunction along with an Anton Piller order for search and seizure. A criminal action is also an effective remedy if the aim is to carry out raids and seize goods, and can be beneficial where the infringement issue is widespread and the rights holder wishes to have general impact. If the counterfeiter is based in a market notorious for infringing activities, the rights holder should pursue police action under the available criminal remedy. A criminal raid is more effective when it is coupled with the arrest of the counterfeiter. However, geographical region is a key factor in such actions. Targeting the correct geographical region with apt timing is vital to forge a successful anti-counterfeiting campaign. The geographical area must be accessible and the time chosen must allow the adequate availability of law enforcement agencies.

Another factor that plays a pivotal role in the selection of a remedy for counterfeiting is the precise identification of the product type. While industries dealing in one product type are frequently concentrated in a particular area, the market for their counterfeits is scattered over a larger area. It thus becomes vital to discern the key locations before an anti-counterfeiting campaign or action can be initiated against them. Alongside the identification of the product type, an assessment of the nature of counterfeiting activities is also crucial. Counterfeiters are often adept at their trade, with the infringing activity carried out so sophisticatedly that distinguishing counterfeits from genuine products becomes an arduous task. Therefore, a detailed assessment comes in handy.

To ensure the success of an anti-counterfeiting campaign, there should always be a checklist of key actions that rights holders should regularly and timely take. The law enforcement agencies must be regularly updated on any increases, changes or developments in counterfeiting activities, their networks, affected areas and products. Awareness campaigns must be initiated to educate consumers as to the ill effects of counterfeiting on the country's economy, which eventually affects consumers themselves. The ample availability of genuine products at affordable prices can also play a major role in decreasing the need for counterfeit products among consumers, which will lead to the eradication of the counterfeiting industry.

Factors such as prior investigation into the counterfeit market, sensitivity to geographical place and knowledge of law enforcement agencies are some of the key issues to be considered before initiating an anti-counterfeiting campaign. Rights holders must understand that there is no standard anti-counterfeiting campaign for two different products. Rather, the anti-counterfeiting strategy must be selected based on the kind of product and various other factors.

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.

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