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Anti-Counterfeit Efforts Finally Go Global

Anti-Counterfeit Efforts Finally Go Global

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

WTO Slams China for Lack of Trade Transparency

Los Angeles, CA – China is coming under harsh criticism from the World Trade Organization with members of the 160-nation body asserting that Beijing has failed to live up to key transparency commitments it made when it joined the organization in 2001.

The WTO Secretariat recently released the results of a critical 200-page report on China’s trade policy which concluded that, over the past two years, the country continues to exhibit a lack of clarity, organization and centralization of its trade rules and regulations.

EU ambassador Angelos Pangratis described the lack of clarity on trade issues as “striking,” while Canada’s representative also criticized the “often vague and insufficent information available” from Beijing.

Release of the report came during the WTO’s recent, bi-annual policy review held at the group’s headquarters in Geneva, Switzerland.

Many of the 50 WTO members who took part in the review also criticized Beijing’s use of export restraints and taxes, restrictions on foreign investments and said it must improve protection for intellectual property rights (IPR).

The US Representative to the WTO, Christopher Wilson, said that China’s “apparently retaliatory conduct” in its use of duties, and said the country appeared to ignore a number of WTO findings against it.”

Wilson added, “An enormous amount of work remains if China is to close significant loopholes in its legal framework and reduce the unacceptably high IPR infringement levels.”

Responding to the WTO report, China’s Assistant Minister of Commerce, Wang Shouwen said its findings were “baseless” and that China “has one of the best track records of implementing WTO rulings.”

But, he added, though China “has made great strides to address these issues…it has pledged to do more to improve transparency.”

07/30/2014