Manufacturing/ Selling of Counterfeit Products

Manufacturing/ Selling of Counterfeit Products

INTRODUCTION:

Counterfeit products are products, often of subservient quality, manufactured or sold under another brand name or copy of the original brand with minute changes without the brand owner’s consent.[1] Some very obvious type of counterfeit products are replica of currencies, branded clothes, shoes watches, handbags, electronic products, software’s etc.

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REASONS FOR COUNTERFEIT PRODUCTS:

• To take advantage of the brand value and name of the original product.
• To increase the market share and place because of real product’s popularity.
• To increase market share by lowering down the price of replica of same product.

TYPES OF COUNTERFEIT PRODUCTS:

1. Deceptive Counterfeit: When the consumers are unaware about the products they are buying are counterfeit.

      Deceptive Counterfeit Products:

              Who are the buyers?

1. Illiterate/ Uneducated people
2. Consumers unaware of brand

1. Non-Deceptive Counterfeit: When consumer are aware of the counterfeit products they are purchasing but still are willing to buy those products

Non -Deceptive Counterfeit Products:

             Who are the buyers?

1. People aware of brand but cannot afford to buy.
2. People looking for status to show-off.

LEGAL POINT OF VIEW:

• It is illegal to use trademark of some other company without permission as per the Trademark Act 1999, violation of which may cause heavy fines and imprisonment in some cases.[1]
• Brand Protection act violates the copying of the product/ design.
• Anti-counterfeiting Consumer Protection Act imposes criminal liability for trafficking of such products. [2]
• It is an illegal activity, where the individual’s crime may not be obvious around them.
• Copyright Act,1957 empowers the police to seize the counterfeit products.[3]

ABOUT COUNTERFEIT PRODUCT MARKET IN INDIA:

• In India, about 80% of the market is flooded with the counterfeit products.
• This is causing about 87% indirect tax loss to the government.
• In FMCG sector, it is very surprising to know that every 5th product is faked or smuggled.
• According to the report from “The Economic Times” in March 2018, Counterfeit market’s worth is over Rs. 40,000 Cr.[4]
• The dependency of Indians on e-commerce sites in gradually increasing where there is flooding of 95% of duplicate products with heavy discounts which attracts people.
• The situation is even more alarming when it come pharmaceutical products. Some products are not only fake but also sub-standard.

COUNTERFEIT PRODUCTS FRON MANUFACTURER’S POINT OF VIEW:

• Loss of Market Share
• Loss of revenue
• Depreciating brand value
• Increase in perfect competition
• Decreasing credibility

COUNTERFEIT PRODUCTS FROM FAKER’S POINT OF VIEW:

• Selling fake brands at lower cost which increase their market share.
• Increase in revenue without showing the income.
• Black money increases.
• Tax evasion.
• Easy Money.

COUNTERFEIT PRODUCTS FROM CONSUMER’S POINT OF VIEW:

In Favour:

• Brand tagged products in significant cheaper rates.
• Nearly same quality as of real brands in some cases.
• Easy availability.

Against:

• Poor quality.
• Harmful contains/ materials used.
• Less durability.
• Zero Warranty.

MY OPINION:

In my opinion, Counterfeiting of products is not ethical and should be banned strictly for following reasons:

• It is illegal in terms of laws.
• It promotes child labour.
• It may support organized crime.
• It diminishes tax revenues.
• It increases inflow of black money.
• Weakens environmental, health and safety regulations.
• May introduce dangerous products in market.
• It can be a reason for major health issues.

According to survey conducted on e-commerce by “Quartz India” in April 2018, from about 3000 respondents from across Mumbai, Delhi, Hyderabad, Chennai, Kolkata and Ahmedabad;

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