Counterfeit Fashion and IP enforcement.

INTRODUCTION

One of the foremost problems faced by the fashion industry is counterfeit goods. The development of IP laws in India is commendable. However, its enforcement continues to disappoint fashion houses.

At present counterfeit goods has large consumer base due to technological advancement it became easier to copy the product. This problem has escalated after the rise of e-commerce platforms and social media. India needs to make some meaningful progress in protecting innovation and creativity.

Legal provisions:

As per IAAC counterfeiting is the offence of manufacturing or distributing lower quality imitating goods under someone else’s name without their legal consent.

The duplicate industry is huge and has strong impact of about one lakh crore on the Indian economy. It is not limited to any particular type of goods or industry but stressed to various other sectors.

Counterfeiting is one of the most significant problems faced by Indian economy, two types of counterfeiting prevalent in the fashion industry.

Firstly, Deceptive where the consumers are under the impression that the product is genuine product and secondly is Non-deceptive where consumer is aware that they are buying a duplicate product.

The trademark act 1999 doesn’t define counterfeit term but its section 102, 103 and 135 provide for certain civil and criminal remedies in case of brand counterfeiting and trademark infringement. The act provides for a punishment of six months, and can be exceeded up to 3 years and a fine of up to 2 lakh rupees. It also provides for civil remedies like injunction and damages.

Counterfeit goods impact on loyal customer base:

The customer base for fake fashion products is broad and very loyal because counterfeit products are of low quality and low priced, which ensures saving to people. It is affordable.

Moreover the fashion industry is very fast paced industry, it keep changing and frequently comes up with new trends. Buying and wearing product from luxury brand is considered to indicate one’s statues and prestige.

So keeping up with the trends and maintaining social statues is made easy and convenient by low quality and cheap fashion goods. This  is the strongest reason for people to support. However it should be  noted that 80% of the consumers are deceived not buying fake products.

The global brand counterfeiting report 2018 has estimated about USD $ 30.3 billion to it.

 According to INTA, the purchase of counterfeit products in India is higher than global average. Fake fashion has huge impact on economy, brand and consumers because it causes direct loss on sales and profits to brands.

Counterfeit goods give direct competition to genuine products thereby diverting the flow of revenue and sales. As per recent reports most of the peoples buying fake products are tricked to buy such products.

Duplicate products all leads to loss of foreign direct investment and taxes. It discourages brand from investing in countries with weak IP enforcement system. This would also cause loss of Jobs. For Government it also cost huge to curb counterfeiting. Brands has to go to costly litigations which also takes so much time, it can also impact genuine buyers who are deceived into buying fakes.

Counterfeit goods, the way forward(conclusion)

India  is on the priority watch list of USTR 2020, Any progress that India makes in  IP law  threatened by the  failure on enforcement by the court and the authorities. In IP investigation techniques are very weak and there is no co-ordination between centre and states.  A strong IP enforcement system is crucial for a developing country like India to attract more investors. A strict enforcement system would create and innovations and would also facilitate economic development. People need to be aware of heavy impact of duplicate/counterfeit fashion in the economy and well as sector specific.

“To make meaningful profess in the IP regime in India, inspiration should be taken from France and Singapore. France has a very effective legal system. Counterfeiting is one of the serious crimes in France, whereas it is still considered a petty/soft crime In Indian IP law. In France penalties extended to 5 years whereas in India penalty is up to 2-3 years only.”

Some key development in IP system includes quick dispute resolution system, Keeping IP infringement under control by effective policies.

“Brans also make certain efforts to tackle counterfeiting, big fashion houses have a legal team working towards protecting the brand. Some brands are actively involved in creating huge consumer awareness via campaigns. Brand owner in France are collectively trying to stand against counterfeits. A new start up called Neurotags used AL-based technology to get rid of counterfeit goods. But this only helps the consumers who want genuine products. By this scheme the people who knowingly buy counterfeit goods remain unaffected.”

The danger by counterfeiting isn’t unknown there is an undoubted need to make effective policies and responsive system that would encourage innovation and creativity. A failure to do so would have a drastic effect on the Fashion industry as well as the Indian economy. 
 

written by:

Priyanshu Jain.