Intellectual Property RightsCounterfeiting of Products vis-à-vis Infringement of Intellectual Property Rights

INTRODUCTION

Counterfeiting is the assembling, manufacturing, importing, and sale of any commodity which falsely carries the trademark of any well-known brand. Counterfeit products are manufactured in an identical manner and made to appear to be indistinguishable from the bona fide items. Such duplication misdirects the customers as the customers purchase the counterfeit products under the impression that the products are genuine.

In other words, counterfeit products are impersonations of genuine items that are made without endorsement from the proprietor of the brand. Counterfeit items are ordinarily of significantly lower quality than the credible products and might be perilous, as they are made with poor quality materials.

Sadly, several well-known and effective organizations, spreading over basically every industry, succumb to duplicating and counterfeiting. Such products are intended to resemble true items; however, they are not precise copies and may have certain contrasting and/or defective features here and there.

IMPACT OF COUNTERFEITING: ANALYZING THE RECENT TRENDS

The Authentication Solution Providers’ Association (ASPA), a self-managed, non-profit organization which promotes anti-counterfeiting and traces arrangement solutions, recently released the report “The State of Counterfeiting in India-2021” (the Report). The objective of the Report is to bring issues to the forefront among industry partners, about the battle against fake merchandise.

The Report analyses and examines patterns in counterfeiting in India, with an attention on occurrences detailed in 2020. As per the Report, counterfeiting cases have grown exponentially, as per the research.

While counterfeit of products has been a worldwide issue which has affected the international economy, the new patterns are unsettling for the economy in India and its citizen. It is observed that the lawbreakers have tainted the economy by supplying phony and unsatisfactory items, which affect the well-being of the public and the society at large, by exploiting the demand for certain medications, security items, sanitary items, and several other fundamental products which became necessary for the customers due to the COVID-19 emergency.

As indicated by the Report, liquor, cigarettes, merchandise, money, and drugs are the main businesses that have been a prey to the counterfeiting and duplication. During the nationwide lockdown, there was a massive expansion in such criminal activities including illegal alcohol, restorative supplies, pharmaceutical and sanitizing products.

LEGAL FRAMEWORK GOVERNING COUNTERFEITING

Indian regulation doesn’t have a particular arrangement of regulations committed to managing the counterfeiting of products. Nonetheless, there are certain legislations that act as the remedy for brand proprietors.

Primarily, any brand can seek remedy against counterfeiting under the Trademark Act, 1999 (the Trademark Act). Even though the Trademark Act does not define or include the term ‘counterfeit’, the same can be brought under the ambit of trademark infringement.

As enumerated in Section 29 of the Trademark Act, if any mark on a product or service is confusingly similar or substantially indistinguishable from a mark registered under the Trademark Act, such mark shall be considered to be infringing on the registered mark under the Trademark Act.

Additionally, the proprietor of a brand or a trademark holder has the option of seeking remedy under the provision of “passing off” and the same is stipulated under Section 135 of the Trademark Act.

Passing off means the manufacturing and distribution of products under the equivalent or comparative brand name to benefit from the brand’s generosity.

Article 51 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement characterizes counterfeit products as things that bear a brand name/mark that is similar and/or the replica of a registered mark of a well-known brand. n fundamental perspectives from, an enrolled brand name without approval.

Section 22 of the Designs Act, 2000 (Designs Act) provides that anyone committing piracy of any design shall be liable to pay the rights holder an amount up to Rs. 50,000 per registered designs. Therefore, besides remedies available under the Trademark Act and the TRIPS, a proprietor can also seek remedy under the Designs Act if the said deign subject to counterfeiting is registered.

Remedies against Counterfeiting:

• Temporary Injunction: Temporary injunction or an interim injunction is an interim remedy which restrains a particular party from temporarily doing a specified act.
• Anton Piller Order: Anton Piller order are issued by the Court wherein the Court can select a local official/authority to seize or create inventory of encroaching merchandise.
• John Doe Order: A John Doe Order is a pre-infringement injunction used to protect the creator’s Intellectual Property Rights (IPR). Such orders are usually issued in copyright infringement cases.

Besides the abovementioned remedies, proprietors can seek for other civil remedies such as damages and rendition of accounts.

BEST PRACTICES

The best practices around the globe to protect one’s brand from counterfeiting are as follows:

1. Global Protection of Intellectual Property: In order to restrict others from using the brand’s intellectual property (IP), it is advised to secure the IP of the product not only within the national jurisdiction of the product but also around the globe, across several international jurisdictions.
2. Monitoring the market and points of promotion: It is important to keep an eye on the market, the market trends, the profits or losses incurred and observe the customer feedback. With the advent of the Internet and digitization of the market, it is equally important to monitor the online promotional efforts and the online listing of the product.
3. Ensuring proactive action: Counterfeiters attain more success when they are left unchallenged. Therefore, it is necessary to take quick actions and seek legal remedies against such counterfeiters to restrict the growth of the duplicate goods in the market. Such action should not only be taken in a swift manner but should cover all the global jurisdictions.
4. Spread awareness among the customer: Counterfeiting affects the well-being of the customers as the customers end up purchasing sub-standard and poor-quality goods. Subsequently, the brand name also gets tarnished as the customers consider the poor-quality goods to be that of a well-known brand.

Hence, in order to ensure customer trust and well-being of the society at the large, the companies should raise awareness among the customer about the fake products so that they don’t end up purchasing the same.

AMLEGALS REMARKS

Counterfeiting of products affects both the companies and the customers in an adverse manner. In today’s highly technical and fast-forward market, counterfeiting of products is fairly common and easy.

In order to tackle the problem of counterfeiting, the companies should ensure that they implement the best practices mentioned hereinabove and be vigilant enough to observe any duplication of the products in the market. The companies operating across several markets and sectors should run regular checks and inspections, both physically in the market and online, in order to detect any fraudulent activity pertaining to their products.

Additionally, even the customers should be well-aware about the products that they are purchasing, check the company or brand details on the packaging, check the description, examine the marking or certification available on the packaging of the product, etc.

-Team AMLEGALS assisted by Ms. Amrita Ghosh (Intern)

For any queries or feedback, please feel free to get in touch with chaitali.sadayet@amlegals.com or mridusha.guha@amlegals.com.