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Counterfeiting in India: Laws and Remedies

Author: Santosh Salora, pursuing LLB from Campus Law Centre, Faculty of Law, University of Delhi.


Innovations and inventions are considered as essential assets of developing countries and are proven drivers of economic growth and development. According to the modern times, people considered that brands are new fashion; either to own a brand or to buy a brand. Nobody wants to leave behind in a race of brands whether s/he can afford a brand or not. In countries like India, many people cannot afford to buy luxury products unlike rich people which constitute a small portion of population of India. In such a scenario, if a substitute product which is almost similar to luxury brand but at a much cheaper rate, the consumers will more willing to buy that product and enjoy the pride of the possession of that brand. The Indian street shops are flooded with these counterfeit goods, and Indian consumers are really fascinated from these goods. These counterfeit goods free ride on the reputation of the original brand. Counterfeiting not only effect the brand image of product violating IP laws but it also effect the economy in the same way a leech sucks blood. According to the United State Representative Report in 2015 which issues lists of notorious markets all over the world and India’s Sadar Market in New Delhifound notorious market. Even in 2016, India was in the priority watch list of USRR Special report because of the extensive trade of counterfeit goods.


Counterfeiting in India and its modes of operation


Counterfeit products are made by engaging workers who actually work in the original manufacturing units. After producing the counterfeit products, counterfeiter looks for distribution channels. They fail to reach luxury shops as they have their trusted distribution channels and dealers and they do not deal with outsiders in order to avoid the counterfeit products. The only solution they have either to sell them on street shops or on Internet. As on online platform they look similar to the original product and it is very difficult for the consumer to distinguish between both. The consumer base is divided into two groups which are classified on the basis of perspective. One the consumers are misrepresented that they are buying a high quality product at a high price almost similar to the original price but in reality it is a counterfeit product. Second, the consumers are aware that they are buying counterfeit and fake goods and knowingly buy that product, thus creates a larger consumer base for these goods.


Laws to protect from counterfeit and remedies provided


A single flower cannot make a bouquet but bunch of flowers can do so, similarly a single remedy i.e. punitive cannot do anything but other remedies are also required. To protect one from counterfeit, civil as well as criminal both kinds of remedies are required. The law of land provides a wide variety of remedies under statutes against counterfeiting but does not have a specific law on counterfeiting. The Indian Government has taken many steps to provide a remedy for counterfeiting, piracy and smuggling. The major initiative is a legal framework which is well developed. The law of land provides a wide variety of remedies under the statutes against counterfeiting but does not have a specific law on counterfeiting. The laws which provide reliefs to the aggrieved are:


The Trademark Act 1999: The act is the principal legislation which protects trademark whether registered or not in India. The act nowhere defines or mentions the term “counterfeit” but categories the term as “falsifying a trade mark” or “falsely applying the trade mark”. The classification of trademark for goods and services are well qualified and classified under the act. The owner of registered trademark can take an action against infringer of his/her trademark under Section 29 of the act. For the unregistered trademark there is a common law remedy of passing off, even against a registered trademark, provided that an unregistered trademark owner was a prior user of trademark. Once the trademark is registered under the act, the protection is available for 10 years from the date of application and can be renewed for further periods. The act provides civil remedies in the form of injunctions, damages, delivery-up, Anton pillar order (search and seizure of evidences without any warning),and rendition of accounts of profit under Section 135 of the act. The act provides for criminal remedies in the form of penalty with the imprisonment up to 3 years and fine ranging from fifty thousand to two lakhs under the Section 102 and 103 of the act.


Copyright Act, 1957: The act deals with legal protection and enforcement of copyrights in India and it seems to have a strict point of view towards infringer, as the act does not have any requirement of registration in the harmony of the Berne Convention but registration serves as evidence. The protection available is different for different form of work like for literacy, dramatic, musical, artistic works; the term of protection is life of author plus 60 years from the beginning of calendar year following the author’s death. For films, sound recordings, photographs; the term of protection is 60 years from the beginning of the calendar year following the work’s publication. The civil remedies are provided in the form of injunction, damages and accounts of profit under the Section 55 of the act. The statute gives the right to police officers to seize the infringing copies during investigation under the Section 64 of the act. The criminal remedies are provided in the form of penalty with the imprisonment up to three years and fine ranging from fifty thousand to two lakhs under the Section 63 of the act.


Patent Act, 1970: The act provides a monopoly right to the patent owner on his/her invention. The act does not provide any criminal remedies but an action can be taken in the form of interim injunction, damages, and permanent injunction which are form of civil remedies. The term of protection under the act is 20 years.


Design Act, 2000: According to Section 22 of the act, if anyone commits a piracy, shall be liable to pay fifty thousand to the right holder of the registered design. The right holder can also seek for civil remedies but need to prove that the alleged act caused him damage.


Geographical Indications of Goods (Registration and Protection) act, 1999: The act protects the goods that have specific geographical origin and possess a given quality, or other features that is attributable to that origin. The GI owner has a right to take any relief against infringement. The act provides criminal remedies in the form of imprisonment up to three years and fine ranging from fifty thousand to two lakhs.


Indian Penal Code, 1860: The act provides provisions which can be invoked for criminal actions in addition to the specific statutes. Under the Chapter XII of the act, the act provides punishment for cheating, counterfeiting, possession of instrument which is used in counterfeiting etc.


Other measures: The Custom Act, 1962 regulates the import and export of goods through Section 44-51 of the act. The Intellectual Property Rights (Imported Goods) Enforcement Rules 2000 empowers the government to put a prohibition on import and export of certain goods under the Section 11. The Custom Act read with IP Enforcement Rules prohibits the import of infringed goods.


Conclusion and Suggestions


Counterfeiting is not only popular in India, but can also be seen in many countries across the globe. Now, it has become a part of an international trade so many countries have recognized it as an IP crime. Countries like USA and UK have amended their laws and enacted a new provision to protect from counterfeiting. The gaps and flaws in the counterfeiting laws and enforcement in our country need to be analyzed and solved. There is an urgent need to aware the people who buy these products as some of them are not aware of consequences of these products on economy. If these kinds of activities do not result in any economic loss to owner of original product, these activities should be allowed but in a controlled manner. If does any economic loss to the owner, a strict action is required. That means the remedies under the specific statutes should be recourse on the basis of act’s consequences. The remedies which are available for the counterfeiting through internet are to check the domain name and proper scrutiny is required. The slow procedure of court and delay on the part of investigation officers, makes an aggrieved a handicap person, so speedy action should be taken by using preventative technology which include license database, radio frequency identification etc. Government should take initiatives like National IPR Policy 2016 which reviewed the counterfeiting activities and provide policies to ensure the legal provisions are effectively enforced and implemented.


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