What is counterfeiting and why is it a matter of concern?

Counterfeit as per Black’s Law Dictionary, is the production of sale of an item which is not original but displays the original genuine trademark with the sole purpose of deceiving buyers.

Counterfeiting is a global concern today. From face powder to food products, from fake websites to fake social media profiles, from pain balms to vaccines, counterfeiting is widely prevalent. The fraudulent intention behind counterfeiting is what is dangerous and has to be curtailed at the earliest making it the need of the hour. The impact of the issue is so severe that people have reached a stage of hesitation to trust medicines. Covid-19 vaccine and its possible counterfeiting is the most recent and ongoing counterfeiting issue.

Counterfeiting in India

The Trade Marks Act, 1999 does not define ‘counterfeiting’. The definition can however be drawn from different dictionaries and the wide knowledge with regards to its practice. It can in simple words be put as an imitation of what we may call authentic.

The statutory and legal framework governing counterfeiting

The Trade Marks Act, 1999.

This is the principal legislation that governs trademarks in India. It provides civil and criminal remedies to infringement of a registered trademark. Unregistered trademark owner’s rights are recognised and protected concerning taking action against a registered trademark if the latter is the prior user.

The Copyright Act, 1957.

As the name suggests, copyright is a property right given to the original and authentic work and the person who publishes such work is given copyright to perform, adapt, develop, perform and display their original work. The act provides both statutory civil and criminal remedies against copyright infringement if any. The initiation action for such infringement does not require any registration.

The Designs Act, 2000.

A design is an umbrella term used to describe different features of a product. Shape, ornament, configuration, pattern or composition of lines or 2-D, 3-D colours, manufactured by the means of the industrial process are the different features that constitute the word Design.

Under this act, the remedies are only civil.

The Geographical Indication of Goods (Registration and Protection) Act, 1999.

An indication attached to goods related to geographical origin or manufactured good is dealt under the above act. The goods that come under the act are either agricultural, manufactured or natural goods come under this act.

Counterfeiting in cyberspace

Cyberspace is the most convenient space for counterfeiting the reason being its easy accessibility and approachability and anyone irrespective of identity being fake or real can have access to this space making it the most challenging task to curb counterfeiting in this platform.

The Information Technology (Intermediary Guidelines) Rules, 2011.

These guidelines are laid down to impose a duty on intermediaries concerning conducting due diligence over any content users post by providing adequate information regarding the restrictions under these guidelines. Clear guidelines are mentioned as an attempt to inform users about what to and what not to display, host, publish, modify, update, share or transmit information that might infringe any patent, copyright, trademark or any proprietary right.

Enforcement through customs:

The rights may be registered with Indian Customs under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 read by the Customs Act, to prevent the importation of infringing content into India. After that registration, the Commissioner of Customs may seize the consignment of the infringing material at the customs port and commence proceedings against the importer if it is satisfied that the material being imported will infringe the Registrant’s IP rights. The final order may require the utter confiscation of the offending goods, along with the importer’s penalties, which could amount to twice the value of the goods purchased.

ANTI-COUNTERFEITING IN INDIAN LAWS

The legal remedies to combat counterfeiting

Through the customs authority of India, the affected parties may enforce their intellectual property rights against an infringer by either criminal or civil action or enforcement.

Civil remedies

Code of Civil Procedure, 1908 governs civil remedies for infringement of Intellectual Property Rights. The Commercial Courts Act, 2015 was brought into force with the sole objective of putting forth efficient and effective redressal of commercial matters. Commercial courts at the district level and High Courts with original jurisdiction were set up as platforms of redressal. Any matter related to Intellectual Property is dealt with under the Commercial Courts Act. The concept of summary judgements was introduced wherein the courts could pass a final without any requirement of oral evidence in case the court is convinced with the other party’s slim chance of succeeding in the matter. Anti-counterfeiting cases are well fit in cases where summary judgements are invoked as they help in reducing a suit’s timeframe and provide proper remedies to the aggrieved parties.

Reliefs granted under civil action:

• Temporary/ex parte ad interim injunction:

A temporary or interim jurisdiction may be granted to the defendant without notice if the courts believe that a delay in granting injunction might lead to an irreparable loss of reputation and profit to the rightful owner.

• Anton Piller Order:

The court can appoint a local commissioner to seize or make an inventory of infringing goods.

• John Doe Order:

The court under this order empowers the local commissioner to enter an unnamed defendant’s premises to seize infringed material when there is an element of suspicion of the presence of such material in and around those premises.

• Books of accounts and profits:

Books of accounts and profits of the defendant can be seized by the court in an attempt to assess the extent of infringing activities to calculate damages.

• Permanent injunction:

A permanent injunction may be ordered by the court in an attempt to stop him/her from manufacturing or dealing with the infringed material.

• Damages and actual costs:

The court can direct the defendant towards payment of damages to the rightful proprietor of the Intellectual Property Rights after assessing the extent of infringed activities keeping in mind the interest of justice and costs of litigation.

Criminal remedies

Criminal remedies apply only to matters that come under the Trade Marks Act, 1999, Information Technology Act, 1999, the Protection of Plant Varieties and Farmers’ Rights Act, 2001 the Copyright Act, 1957 and the Geographical Indication of Goods (Registration and Protection) Act, 1999

Criminal action can be initiated against the infringing party by lodging an FIR or a lodging a complaint to the magistrate.  The police are empowered with the rights to search, seize goods and arrest the offender if the offence is cognizable. The offender is punished with imprisonment or for the specified term or fine or both as per the statute concerned.

CONCLUSION

Counterfeiting has spread its wings so far and wide that it is difficult to curtail it. While more and more acts are being introduced, new forms of counterfeiting are being witnessed over time. The graph has been up and sharp. One of the major reasons behind this growth is the access to technology which teaches people art to commit fraud. The genre of psychological and crime thrillers has hit in with such intensity that new forms of fraud and ways to get away with them are portrayed heroically. Though not, some of the fraudsters commit counterfeiting for easy money and under the influence of such sick movies and peer pressure. Counterfeiting cannot practically be put an end to but awareness regarding the ease of tracing the offenders if tried hard and the penalties involved might give an element of fear at least to some if not all.  As the saying goes, prevention is better than cure maximum efforts should be made to completely curb counterfeiting rather than coming up with acts that talk of what might happen after the offence is committed. The fraud would have been committed and people at the receiving end might have incurred heavy loss psychologically and mentally.

Bibliography

Counterfeit. (n.d.). Retrieved from THE LAW.COM DICTIONARY.

Counterfeiting, Piracy and Smuggling in India- Effects and Potential Solutions. (n.d.). The International Chamber of Commerce.

Open market for fake goods. (2010, December 12). India Business Law Journal.

Taking issue with counterfeits in India. (2014, August/September). World Trademark Review.