J. Hewes, Author at Global Trade Magazine

Washington, DC – It’s no longer just the US and the European Union that are concerned with the festering issue of counterfeit products, say Michael Czinkota and Ilkka Ronkainen of Georgetown University.

“Globally, companies reportedly lose a total of $657 billion every year because of product counterfeiting and other infringement on intellectual property,” they say. “Today’s key problems are with high-visibility and strong brand name consumer goods.”

Intellectual property enforcement “ensures that new ideas can blossom into economic opportunity,” they’ve written in a recently published paper addressing the topic of counterfeit goods.

“Intellectual Property Rights (IPRs) have become a core issue in the global economic debate. No longer confined to cheap knockoffs of luxury goods, IP theft is placing industry and the public at risk of highly adverse economic, safety, and health consequences,” they added.

Earlier, the only concern was whether a company’s product was being counterfeited; now, the raw materials and components purchased for production may be counterfeited. In general, countries with lower per capita incomes, higher levels of corruption in government, and lower levels of involvement in international trade tend to have more intellectual property violations.

Ronkainen teaches marketing and international business at Georgetown University, while Czinkota researches international business and policy issues at the school.

According to the writers, China, long seen as the focal production point of global counterfeiting operations, has taken significant steps to counter what has plagued the country’s e-commerce market particularly hard.

Alibaba “spends more than $16 million yearly fighting counterfeit goods,” they say. Another example is “Hong Kong’s commitment to the protection” of intellectual property.

“With the goal of enhancing consumer confidence in Hong Kong, and to strengthen the city’s reputation as a ‘Shopping Paradise’ for genuine products, the Intellectual Property Department has launched the ‘No Fakes Pledge’ scheme,” Czinkota and Ronkainen said.

The issuing bodies of the scheme are the Hong Kong & Kowloon Electrical Appliances Merchants’ Association Limited and the Hong Kong Coalition for Intellectual Property Rights of the Federation of Hong Kong Industries.

“The international marketer must act to enforce intellectual property rights. No industry or country is immune from infringement, nor can they address the threat alone. There is also need for better education regarding the risks IPR violations pose and how to defend against them,” they said.

For example, the pharmaceutical industry lobbied to make sure that provisions for patent protection in the NAFTA agreement were meticulously spelled out.

Pharmaceutical Research and Manufacturers (PhRMA) addressed the issue of international IP protection by responding to the Special 301 Report issued by the US Trade Representative in May 2012.

The PhRMA statement cited the need for IP protections in spurring innovation, research and development, as well as the need for fair international market conditions to ensure that patients have access to medications.

One research firm estimated the global market for counterfeit pharmaceuticals to generate revenues between $75 billion and $200 billion a year.

The Pharmaceutical Security Institute (PSI), a trade association created to address illegal pharmaceutical incidents, collects data on the number of counterfeiting, illegal diversion, and theft incidents. These incidents increased seventy-eight percent from 2005 to 2009.

Pfizer reports that between 2004 and 2010 it seized more than 62 million doses of counterfeit medicines worldwide. More than 200 million counterfeit Eli Lilly medicines have been seized in 800 raids around the world.

“A number of other governments are drafting similar policies, which have served as a catalyst for enhancing protection in both the public and private sectors in those nations,” said Czinkota and Ronkainen.

Efforts to protect intellectual property, and modernize the patent and trademark system are crucial, they added.

“The power of creativity and innovation applied to the solving of practical problems is not the exclusive province of any country or people. A victory over fakes and counterfeits will protect the quality and reliability of products and services, and lets customers be more informed and secure in their usage decisions.”

10/21/2014

Portland, OR – US retail firms are confident in their ability to quickly detect data breaches, despite industry research to the contrary, according to a recent survey conducted by Dimensional Research and Oregon-based security management firm Tripwire.

When asked how quickly their organizations would detect a breach, 42 percent said it would take 48 hours, 18 percent said it would take 72 hours, and 11 percent said it would take a week, the survey said.

While 35 percent of respondents were “very confident” and 47 percent were “somewhat confident” that their security controls could detect rogue applications, most breaches go undiscovered for weeks, months or even longer, the research found.

The 2014 Trustwave Global Security Report reveals that the retail sector is the top target for cyber criminals, comprising 35 percent of the attacks studied with an average 229 days taken to detect a security breach.

The report also states that the number of firms that detected their own breaches dropped from 37 percent in 2012 to 33 percent in 2013. Some 85 percent of point-of-sale intrusions took weeks to discover, and 43 percent of web application attacks took months to detect.

The survey evaluated the attitudes of 154 retail organizations on a variety of cyber security topics.

“I always say that trust is not a control, and hope is not a strategy,” said Dwayne Melancon, chief technology officer for Tripwire. “Unfortunately, this data suggests that a lot of retailers are far too hopeful about their own cyber security capabilities.

Despite “ample historical evidence that most breaches go undiscovered for months,” he said, “There is clearly a significant disconnect between perception and reality, even though the repercussions for failing to meet the required level of rigor around cyber security has led to the recent removal of retail executives and board members.”

The survey also found that 70 percent of respondents said that the recent, nationally-reported Target security breach has affected the level of attention executives give to security in their organizations and that 26 percent of respondents don’t evaluate the security of business partners, such as HVAC contractors who were implicated in the Target breach.

07/03/2014

Anti-Counterfeit Efforts Finally Go Global

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