Combating Counterfeiting Trade Association Become Proactive

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The Holography Times

Vol. 7, Issue 21

Combating counterfeiting:

Trade associationsbecome proactiveBy C S Jeena

Each and every product from a pencil to aircraft has a trade association

formed with an aim to facilitate the business environment for its member

companies.

Today, in India more than 300 State level industry-trade association exist

representing more than 7,00,000* companies.

While they are playing an important role in modern and global economies,

there are various hindrances which affect their industry / sector growth.

Product counterfeiting is one of them. It is affecting all categories of

products, but the impact is very high in sectors / product categories

like fast moving consumer goods (FMCG), pharmaceuticals, electronics,

automobile, aircraft parts, beverages, etc.

To address this issue, various trade associations have come forward and

are playing a proactive role in curbing this menace. This article highlights

their activities and the role trade association can play in curbing this

menace to a large extent.

* Ministry of Corporate Affairs

Introduction:Brand counterfeiting in India is

not a new phenomenon. Brands

are under attack in various forms

such as counterfeiting,piracy,

duplication, pilfering, tamperingand adulteration of product.

These attempts are nothing but

an attack on the brand and hence

a major risk to the value of the

company.

Brand attack has many ill effects,

the key ones being;

a) Reduces the brand value,

customers conidence,

market share and proitability

of a company.b) The brand attacker, who

supplies a duplicate or

counterfeit product, does not

pay any taxes. It is a loss to

the collection of taxes for

various governments.

c) There are reports in the

press mentioning that proits

from suchil legal activities

are going to terrorists and

banned organisations.

d) Counterfeiting also sometimes

results in the unfortunate lossof human lives.

Risk to the Brand must be

taken with all seriousness

The Government of India is

doing its best in developing

suitable laws, educating police

force and judiciary to deal with

litigation arising out of brand

attack. However, legal process

takes its own time and the

attacks on the brand continue.As brands are amongst the most

valuable assets of companies,

industry association can play a

vital role in providing effective

information and advising proper

anti-counterfeiting strategies to

their members.

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Vol. 7, Issue 21Cover Story

Importance of industry

association in curbing

counterfeitingAccording to Eef de Ferrante,Director at Active & Intelligent

Packaging Industry Association,

Well, irst off all a trade

association is a medium. A way

to get in contact with companies

in a certain industry. But also

trade associations can advise

their members, and play a role on

behalf of their members towards

governments. The ideal situation

is when membership to anassociation is a guarantee to the

quality and origin of a product.

In that way, associations need to

check and verify memberships.

Big trade associations such

as FICCI, CII and ASSOCHAM

have discussed and taken up

the ight against the menace of

counterfeit at various forums

highlighting the loss to the brand

owner, government, society andto consumers. There have been

seminars and meeting with

government for law enforcement.

These are all useful initiatives,

but, it is now imperative that

the work done so far is taken

up to a new level, keeping mind

the fact, that in this ight there is

also a need to continuously look

for new innovative solutions and

approach by each Brand owner/

company.

Proactive steps

Rather than wait and watch and

then a reactionary step in ighting

the menace, the associations

ought to educate their members

that Prevention is better than

Cure, and they could consider

taking the undernoted proactive

steps to help their membersprotect themselves against the

onslaught of counterfeiting.

1. Educating members about

menace

Association website can play vital

role in educating its members

through their website. For

example, National Electrical

manufacturers Association

(NEMA) , USA has taken the

menace very seriously and

considered anti-counterfeiting

as a matter of public policy and

classiied an special section

on anti-counterfeiting at their

website. http://www.nema.org/

Policy/Anti-Counterfeiting/Pages/

default.aspx. Through this NEMA

have started various services

for its members such as anti-

counterfeiting news, assistance to

members, useful links etc.

In India, FICCI, which is one of

biggest industry associations, is

working on same line and has

recently formed a forum called

Committee Against Smuggling

and Counterfeiting Activities

Destroying Economy (CASCADE)

with an aim to generate awareness

on the impact of these menace

amongst consumers and citizens.

The forum has launched a websitewww.icci-cascade.com (see

igure1) which clariies various

issues on counterfeiting. The

website educates its member

and consumer via industry

news, awareness brochure,

and discussion forum. The

Well, first off all a trade association is a medium. A way to get in contact

with companies in a certain industry. But also trade associations can

advise their members, and play a role on behalf of their members towards

governments. The ideal situation is when membership to an association is

a guarantee to the quality and origin of a product. In that way, associations

need to check and verify memberships.

- Eef de Ferrante

Director at Active & Intelligent Packaging Industry Association


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Vol. 7, Issue 21Cover Story

website also updates latest

and articles and best practices

adopted by companies around

the world against counterfeiting.

According to Anil Rajput,

Chairman FICCI CASCADE,

Counterfeiting and Smuggling

are increasingly becoming a

hugely lucrative business causing

not only a great loss of revenue

to the industry but also posing

a serious threat to the security

of the nation. As a result huge

amount of investments goes in

dealing with anti- social elements

that is neither good for legitimate

industry, for government nor for

consumers. Efforts to counter this

menace needs highest priority and

calls for robust actions from all

stakeholders.

2. Educating consumersWhile educating the member

companies lies under the

responsibility of trade

association, mass consumers can

be educated in similar with the

help of consumers organisation /

associations.

3. Assistance to members

in adopting authentication

technologies

Today, there are over 100 product

security technologies (holograms,

digital watermarks, DNA taggants,

security inks, serialisation etc.)

used by manufacturer to combat

counterfeiting. Such solutions

can be applied on the primary

or secondary packaging. For

an individual manufacturing

company, it is challenging to

understand the scope and eficacy

of each of these technologies. The

technology has to be understood,

the right features have to be

identiied, the cost of adopting

the solution has to be looked as

also the logistics affecting the

deployment of the solution all

across the markets that the brand

is present in. Trade associationcan provide guidelines to their

members in order to reduce

this burden. For example,

Association such as Organisation

of Pharmaceutical Producers of

India (OPPI) have prepared and

uploaded anti-counterfeiting

Fig1: Screenshot picture of FICCI website

Efforts to counter this

menace needs highest

priority and calls for

robust actions from all

stakeholders


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Vol. 7, Issue 21

7. ISO Standards

The International Standards

Organisation has recently

introduced a new standard, ISO

12931 titled Performance criteria

for authentication solutions

used to combat counterfeiting of

material goods. This standard

sets out the overall strategya

brand owner should adopt to ight

the menace of counterfeiting.

These days ISO 9001 and ISO

14000 implementation are

widely adopted. Associations

of Industries that are prone to

counterfeiting should take a

lead in helping their members

understand this standard andalso implement this for the

overall beneit of the industry.

As a further initiative, the industry

associations should also build

an environment that respects

intellectual property. Members

should be encouraged to Patent

their innovations so that they are

able to reap the beneits of their

research and development.

In conclusions, it would be

apt to say that an industry

association is formed to serve

the cause of its members at

large and one of the greatest

threats today to any successful

products is the counterfeits and

lookalike products. An industry

association should look within

and decide whether it is doing

all that it can to protect its

members. In case any industry

association feels that it needssome additional information

and advice, the Hologram

Manufacturers Association of

India will be more than happy to

help in their endeavours to ight

counterfeiting. Please feel free to

write to us [email protected].

S.no Name of Trade Association Country Initiative

01. National Electronics Manufacturers Association USA Anti-counterfeiting guidelines issued on their website for(NEMA) members.

02. Federation of Indian Chambers of Commerce India Portal launched on sensitising consumers against counterfeiting.and Industries (FICCI)

03. Organisation of Pharmaceutical Producers of India Anti-Counterfeiting guidelines issued on their website forIndia (OPPI) members.

04. Indian Cellular Association India Adopted anauthentication technology on their handsets andeducated the consumers about the same through their websiteand mass media campaigns.

05. Silk Mark Organisation of India India Adopted an authentication technology on the products andeducated the consumers about the same through their websiteand mass media campaigns.

06. Electronic Retailing Association USA Updating member on counterfeiting news.

07. European Semiconductor Industry Association Belgium Awareness against counterfeit products.

08. International Electro technical Commission Switzerland Anti-Counterfeiting guidelines issued at website for members.

09. International Electronic Manufacturing Initiative Global Investigating possible projects related to counterfeit(iNEMI) components.

10. Semi-Conductors Industry Association USA The SIA Anti-Counterfeiting Task Force (ACTF) is working on avariety of fronts to stop counterfeits from entering the marketplace.

11. Counterfeit Intelligence Bureau UK Developed the innovative counterfeiting seizure maps, the liveseizure report, the news archive and the case studydatabase.

Table: Anti-counterfeiting initiative taken by some trade association

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Vol. 7, Issue 21

Established in 1926, National Electrical Manufacturers Association

(NEMA), headquarter in Arlington, Virginia is world leading association

of electrical equipment manufacturers. Representing more than 450

members the worldwide annual sales of NEMA-scope products exceed

USD 120 billion. Its mission is As the voice for the electrical and

medical imaging industries, NEMA is a pacesetting champion for safety,

innovation, interoperability, environment, and market enhancement

through advocacy, business information, and standards for products,systems, and technologies.

IN 2002, Several NEMA member

companies began to recognize

the growing presence of

counterfeitelectrical products

in markets around the world.

These counterfeit products bear

the unauthorizedtrademark of a

genuine electrical manufacturerand the unauthorized mark of a

certiication or testorganization.

Some of them incorporate

unauthorized, patented technology

of NEMA members.

NEMAs anti-counterfeiting

program helps its member

companies understand and

exercisetheir intellectual property

rights. Because counterfeiting

is a global problem that affectscertiicationmarks as well as

manufacturer brand names and

trademarks, NEMA includes in

its programsuch certiication

organizations as Underwriters

Laboratories and the Canadian

StandardsAssociation. NEMA

secured the participation

of Canadian and Mexican

tradeorganizations representing

electrical manufacturers and

carries on a dialogue withEuropean

counterparts as well.

The NEMA Anti-Counterfeiting

Coalition program has three main

components:

Education and training:

This involves developing best

practices to assist members

in protectingtheir intellectual

property and enforcing their

legal rights, including working

with customs and otherlaw

enforcement authorities. Italso requires networking with

manufacturers and other trade

groupsmutually interested in the

counterfeiting problem.

Documenting and publicizing

the problem:

NEMA prepares reports and press

releases for distribution toinform

the public about counterfeit

electrical products.

Public policy advocacy:

Counterfeiting is an

internationally recognized

crime. It has been documented

that counterfeitelectrical

products present substantial

health and safety concerns.

NEMA is an advocate for greater

publicresources devoted to

combatting this crime, keeping

counterfeit goods out of the

marketplace, improvingcoordinationamong state and

national governments, and

strengthening law enforcement

programs.

For more visit www.nema.org

ighting counterfeiting

Figure : Ad campaign by NEMA

Effective Efforts

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Combating Counterfeiting Trade Association Become Proactive