The geography of counterfeiting in India

by Shwetabh Raj, IP Manager EBTC

Background

While counterfeiting is a global problem that has touched and affected almost every economy, the recent trends in India are concerning not only for the brand owners but also for the Indian economy. The COVID-19 pandemic has demonstrated that counterfeiters are very agile in adapting to the market situation and that they can infiltrate in the legitimate supply chains. In recent years, the counterfeiters have started to use new technologies in the manufacturing process so that they can imitate the original product as closely as possible. These technologies allow the counterfeiters not only to manufacture the fake product but also to copy the logo, design, barcodes, and other packaging features to circumvent traditional protection measures and mislead the customer in believing that they are buying the original product.

Counterfeiting in the eyes of (not only) international authorities

The “State of Counterfeiting in India – 2021” report published by ASPA Global, an Indian non-profit organisation specialised in authentication systems and anticounterfeiting solutions, highlighted that the top 5 sectors most affected by counterfeiting were currency, FMCG, alcohol, pharmaceutical, and tobacco. The report also found that the states of Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, West Bengal, Punjab, Jharkhand, Delhi, Gujarat, and Uttarakhand had the most counterfeiting incidents. [1]

The European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) jointly published a report on “Dangerous Fakes” listing India as one of the top countries in various categories when it comes to the origin of fake goods.[2]   Similarly, the office of the United State Trade Representative published a report called ‘Special 301’  which outlined issues with counterfeiting in general and revealed list of markets located in cities of Mumbai, Delhi, and Kolkata notoriously known for selling counterfeiting products. 

Geography and operation of counterfeiters  

Over the years, counterfeiters have started to operate in a systematic way like any other business and identify every opportunity worth of monetisation. Once the counterfeiters establish themselves in a particular market, they build a network of people engaged in similar or related activities to continue and grow their operations. As this network expands, the market gets increasingly filled with counterfeiting goods, which poses challenges for the brand owners and enforcement authorities.

Nowadays, counterfeiters operate in nearly all Indian markets. There are however few markets which are “famous” for counterfeiting goods. For example, markets in Mumbai lead in sale of counterfeit luxury products like watches and bags due to their connectivity with the port. Heera Panna Market in Mumbai is recognised as a focal point for the sale of high-quality counterfeit watches, footwear and cosmetics.

Delhi being the capital of the country has thriving organised markets for counterfeit products. Some notoriously known markets where counterfeit goods are easily available and sold openly are Gaffar market (known for counterfeit mobile phones & accessories), Sadar Bazaar (known for counterfeit FMCG products), Kashmiri gate (known for counterfeit auto-parts) and Nehru place (known for counterfeit computer accessories).

In southern part of India, Hyderabad’s Chenoy trade centre and Hong Kong Bazaar are famous for counterfeit computer hardware and software. Kasimedu Street and Burma bazaar of Chennai are known for dealing in counterfeit electronic equipment’s like mobile phones, LCD TVs, imported cameras and pirated movies.

How to tackle counterfeiting

The EU companies have to devise a strategy to monitor the above-mentioned market areas and carry out regular market surveys to check the availability of counterfeit products of their brand. Theses market surveys can be carried out with the support of their own brand protection team or through risk consulting firms who check occurrence of the counterfeited goods on the ground.

One practical approach that the EU SMEs can adopt prior the investigation on the ground, is identification of the markets which have high probability of having counterfeit goods. Once the potential infringing marker players are identified, the investigative team can be deployed to carry out discreet enquiries in the concerned areas and ascertain the suspected players dealing with the counterfeit products.  Consequently, a surveillance team can be placed in and around the area to check the potential movement of counterfeit goods and to understand the modus operandi of the counterfeiters.

Furthermore, a sample of the alleged counterfeit product can be procured and sent to the EU SMEs for the examination to prepare a quality check report highlighting the difference between the original & counterfeit products. The findings in the report may be used as evidence against the counterfeiter before the court of law or law enforcement authorities like police, customs, or excise

Conclusion

Product counterfeiting has grown in breadth and is a threat to worldwide economy. Moreover, availability of counterfeit product in the market can cause reputational damage, including loss of revenue and even might result in litigation therefore it is advisable for the EU SMEs to gather necessary intelligence through the market surveys and establish an exhaustive brand protection strategy.

 Although there is not a unitary legislation against counterfeiting in India, there are statutory provisions in Indian law under various statures to ensure protection and enforcement to IP rights holders against counterfeiting. The EU companies should adopt an effective IP protection and enforcement strategy to prevent and deal with the issue of counterfeiting.

[1] https://www.aspaglobal.com/pre_upload/nation/1623216858-4730baa0efdb83a…

[2] https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library…