Fool good factor

When the Congress party talks of a fool-good factor as opposed to the BJP's feel-good, it's actually got a point. With counterfeits accounting for close to 40 per cent of all auto components, 20-30 per cent for pharmaceutical products, and anywhere between five and 15 per cent of all FMCG items sold in the country, there's a lot of fool-good going around.

You take medicines when you're ill, and feel good about being on the road to recovery, but if every fourth medicine you buy is a fake, the chances of getting better are kind of bleak.

And, at a CII conference on counterfeits last week, the chairman of one of the sessions spoke of how a close friend had a narrow escape when, while driving in the hills, the differential of his car broke -- it was only then that it was discovered the component was a fake.

The menace of fakes, of course, is not new. Most of us have been buying pirated software and music for decades, and love to pick up fake Hermes scarves and ties in places like China.

While that in itself was illegal, and probably life-threatening for the companies whose products were routinely ripped off, with such massive counterfeiting taking place in items of mass consumption, you've got a real life-threatening problem for ordinary people.

The impact of running an unlicensed copy of Windows, surely, is far less serious than the effects of ingesting chalk powder, or some other untested combination of chemicals in place of your regular analgesic or cough syrup, on a regular basis.

Hearing government officials, as well as lawyers who wanted to sound positive at the CII conference, you'd think we were well on our way to tackling the menace.

(It must be mentioned here that companies like SKF are successfully using holograms on their packaging to distinguish their products from fakes. But while holograms are cost-effective in themselves -- SKF spends a rupee or less on each pack of bearings -- communicating the hologram message to customers usually requires expensive ad campaigns.)

The consumer affairs secretary spoke of how there was more than a three-fold hike in cases registered against companies who were misusing the ISI mark -- that is, their products displayed this quality certificate while their companies had not been awarded it -- while others spoke of how the new copyright and trademarks Act made it much easier to tackle the menace.

Under the copyrights Act, for instance, a complaint can be made to the police, and even without a magistrate's order, the cops can seize the contraband goods. Similarly, we were told, under the trademarks Act, all that is needed is to get a magistrate's permission, and the police can then seize the contraband items.

While all this is clearly good news, and a welcome step forward, Byron Xavier, the external counsel for printer firm Epson put it in perspective while telling the audience just what was being done to combat fakes in countries like Singapore and Malaysia.

In fact, Epson has been so successful in combating piracy, not only does it spend about 2-3 per cent of its revenues on just this, it targets only those cases where it gets a return of four dollars for every one spent on the anti-piracy effort.

Under the Malaysian Trade Description Act, fakes can be seized by the customs officials even without a warrant, and without the order of the public prosecutor -- typically, Byron told the audience, it takes just a few hours to seize the products from the time of the original complaint.

In fact, customs officials can exercise the same powers as the police and can arrest offenders. Under the Singapore Criminal Procedure Code, complainants can go to the attorney general and ask for a 'fiat', and can then act in place of the public prosecutor in a court case against counterfeiters -- this takes the load off the public prosecutor's office and ensures the case is pursued with a far greater zeal, though the public prosecutor has to be consulted in case the counterfeiter wants to enter into a plea bargain or for recommending the sentence.

The court in Singapore is also authorised to order the counterfeiter (or the person caught selling counterfeit goods) to reveal the name of third parties, that is the names of where he/she gets the goods from. And unlike India, the counterfeit goods are to be destroyed in case the company making the complaint wants this to be done.

This is the kind of action that India needs to take if it is serious about tackling the counterfeit market. Merely promising the death sentence, as has been done in the case of those caught making counterfeit medicines, sounds good, but is unlikely to lead to any serious action since, as was pointed out during the CII conference, there are just 600 inspectors for 20,000 registered drug producers in the country -- in any case, 60 per cent of the spurious drugs trade takes place out of Bhagirath Place, right in the heart of the capital, and no one's taken any action against it so far.

Of the 26 drug-testing labs in the country, only seven are functioning. Worse, as was pointed out by one leading pharma firm's representative, while the firm had given the government evidence of the wealth amassed by one drug inspector in Delhi over a year ago, no action has been taken! So, while the feel good may disappear in another year or so, rest assured, the fool good's here to stay.

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