Worried by counterfeiters’ activities, some groups have risen to stop them, reports ADEDEJI ADEMIGBUJI.
Brand counterfeiting has been described as “the crime of the 21st Century” as it affects almost every company. The subject of intellectual property, under which it falls, is attracting attention in the legal world. But much is not heard about it in marketing literature. Counterfeiting can be a problem for a brand, but it affects the profits of the brand owner more.
For instance, the real HP LaserJet printer costs about N100,000 while the fake costs N40,000. But many customers do not believe the real one is 10 times better than the fake. Anyone who cannot afford the former will be happy to settle for a cheaper substitute; yet the cost implication for both brand owners, the customers who patronise cheap brand and the economy which tolerates counterfeiters is huge and could be devastating.
With the cartel of counterfeiters growing daily in sophistication and funding, luxury brand owners are becoming more vulnerable after spending millions to effectively attract the affluent to their brands. The threat posed by counterfeiters to their priced brands has been described as huge. As a result, the growth rate of counterfeiting has doubled in the last two decades; posing challenges for governments, genuine-item manufacturers and consumers as well.
At a cross-industry anti-counterfeiting conference in Abuja, hosted by Hewlett Package (HP), it was gathered that the global trade in counterfeit goods is growing in Africa, and, particularly, Nigeria is increasingly being targeted as a market for counterfeit merchandise as a result of its growing middle class and position as new economic frontier for global brands.
This, perhaps, led multinational and national companies and stakeholders to discuss consumer, brand protection and lobbying as ways of raising awareness, challenge the legal framework on counterfeiting to stem the tide of sales and purchase of counterfeited brands.
The Director-General of Standards Organisation of Nigeria (SON), Joseph Odumodu, at the summit, lamented that brands counterfeiting has been a long standing global problem which poses a great concern to the government and legitimate businesses. Given its huge negative impact on the economic growth of the nation, he said SON had made seizures estimated in excess of N500 million in Nigeria.
Putting the global loss at $400 billion by the International Chamber of Commerce (ICC), Odumodu said music software and video market in Nigeria is languishing in over N100 billion loss.
“In the past, counterfeit products were distributed largely through informal markets, but in recent times, these products are increasingly infiltrating legitimate supply chains and now appearing on the shelves of established retail shops and trade fairs. The internet which is a virtual market place, has provided counterfeiters and pirates a new powerful means to sell their products via auction sites, stand-alone e-commerce sites and email solicitation. The online environment is attractive to counterfeiters and pirates for a number of reasons, including the relative ease of deceiving consumers and the market reach,” he observed.
Worried about how counterfeiting is affecting its brand value in its market category, HP Brand Protection Programme Manager, Jeff Kwasny, complained that HP cartridges are refilled or remanufactured in unauthorised or fake reproductions of HP packaging, which are meant to mislead the consumer believe that they are buying genuine HP products.
He said as growing markets, many African countries are a major target for counterfeiting networks. “HP’s ACF Programme is supporting African authorities in order to tackle counterfeiting before it gains a larger foothold in Africa. HP is active in protecting African economies from illicit trade of HP branded products. Customers are mostly unwitting victims of counterfeiting. Only six per cent of corporate customers who purchased counterfeit print cartridges did so intentionally,” he said.
The District Manager, Printing and Personal System Western, Southern and Eastern Africa, Jean-Paul Pinto, said with the rate at which brand protection is becoming difficult as a result of growth in technology, there is need to protect consumers, customers, investment from the impact of counterfeiting. “It destroys economy and business investment and trade partners. The fight against counterfeiting is beyond HP but it’s everybody’s fight,” he said.
Also, the President, Intellectual Property Law Association of Nigeria, Prof Bankole Sodipo, said any brand that refuses to innovate on new ways to protect its identity will go into extinction. He, however, advised that a reform should be canvassed by joint-industry stakeholders in other to change certain aspects of the Nigerian anti-counterfeiting laws, which adjudicate weak punitive measure for offenders, hence, encouraging them to commit the crime.
“For brands, if you don’t do what is right you will go into extinction? Counterfeiting is one of the greatest things that can kill an industry. We need a reform to fight counterfeiting. We need lobbying to effect changes in the law in other to fight the current legal framework so that the fight against counterfeiting will be easy for brands,” he said.
Sodipo, however, warned brand owners against the activities of their authorised distributors who are easy prey for counterfeiting rings. “I am aware of a brand that has gone into extinction as a result of the activities of its distributors, who allowed counterfeiters to use their channels for distribution of its principal’s counterfeit,” he said.
At the moment, a lot of brands are waking up to the challenge posed by counterfeiting. The Senior Brand Protection Manager, Unilever Africa, Mr. Desmond Adeola, disclosed that Unilever has internal solutions to check counterfeiting of its brands.“At Unilever, we employed internal solutions. We look at our supply chains. We do lots of tiding of company policies to stamp out opportunities for counterfeiters. We know that they clone our packages and that is why we look at the issue of editable artworks, engagement of law enforcement agents and give them needed information to protect our brands,” he said.
The Partner & Head Intellectual Property Department, Aluko & Oyebode, Uche Nwokocha, urged that collaboration among industry players will change the game against counterfeiters. He, however, urged collaboration among industry players to seek for legal assistance.
“Whatever kind of partnership that is embarked upon, Brand Owners require the services of legal practitioners to ensure that such actions are carried out within the limits of the law. Relevant regulatory agencies carry out raids upon successful investigation into the complaint lodged by the owner of brand. Legal assistance is often required to ensure that such actions are carried out within the limits of the law,” he said.
To stop the menace, Kwasny said HP has adopted five strategies in fighting counterfeiting. They include investigation and enforcement; prevention and education; channel management (that management of suppliers activities) and product and packaging.
Meanwhile, the Comptroller- General of Customs, Abdullahi Dikko Inde, said it was most important that every nation fights counterfeiting and piracy to protect their economy. He advised that there is need for all relevant border agencies to collaborate to ensure success in this endeavour.
“Protection of Intellectual Property (IP) Rights is an obligation upon each country that accedes to the World Trade Organisation Trade Related Intellectual Property Rights (WTO TRIPS) agreement. The TRIPS, which Nigeria has ratified, provides certain minimum standards for protection which should be accorded by governments to IP Right owners including border enforcement,” he said.
