Hit Them Where It Hurts The Most

In my almost two decades experience in intellectual property, I’ve noticed a common practice undertaken by many PNG businesses that find themselves confronted with imported counterfeit products.  The typical approach taken by these local companies is to put out notices in the local daily informing the public about certain counterfeits circulating the market and, in some cases, warning consumers to refrain from purchasing these fake products as they pose possible health risks.

The warnings are serious particularly when the counterfeits in question are pharmaceutical products.

These notices are somewhat reactionary to a potential intellectual property infringement.

Many local business owners facing counterfeit issues often do little or nothing to proactively protect their intellectual property.  Actions are taken only when a potential infringement is imminent and it is at that point, IP owners start scrounging for those trade mark certificates or other evidence to prove ownership.

Papua New Guinea businesses need to take stock of their IP and a good starting point is to firstly identify them. Upon identification, these assets should then be formally protected through registration.  Various avenues should then be explored and appropriate strategies implemented in the marketplace to minimize infringement. And finally, maintenance of rights through renewals and effective enforcement is quintessential.  Registering a trademark is only one part of the process.  Effective enforcement is another aspect of the process which is critical to the overall success of IP portfolio management, protection and sustainability.

In the case of imported counterfeit products, I say businesses should hit the counterfeit manufacturers, exporters and importers where it hurts the most.  So where does it “hurt the most”, one may ask.

All imported products entering Papua New Guinea are required to clear through customs.  The Office of the Commissioner for Customs is entrusted with the responsibility to inspect and where relevant clear goods at the port of entry.  As part of this responsibility, Customs can also suspend clearance of goods where it suspects that goods entering may infringe intellectual property rights that are recorded with its office.

Now think about this for a moment.

The manufacturer has gone through great lengths to manufacture the counterfeit product.  There are subsequent costs involved in the exportation and importation of that counterfeit.  The costs are often substantial.  If Customs were to suspend clearance due to intellectual property infringement issues, there are bound to be costs involved in the storage of those suspended goods pending resolution of the relevant issues with all concerned parties or in the most likely case, through the Courts.  The potential costs are not only substantial but also continuing particularly in cases where both parties stand their grounds.

From a business point of view for the importer, the likely costs mentioned above can be astronomical the whole business venture in importing counterfeits can end up being so uneconomical importers may regret importing the fakes in the first place.  It becomes a form of deterrent because the costs do hurt.

From my experience, many importers that are “caught” importing fake products are very apologetic. In some instances, importers blame exporters for sending them what they thought were genuine products (when in fact they are fakes). Some importers go to the extent of immediately offering a “fee” and undertakings to not import the concerned fake products again.

Successful IP owners in infringement matters are placed in a commanding situation and the most pleasing aspect for them is that by preventing these counterfeits from entering the market place, their business is safeguarded from competing counterfeits.

From a public and consumer perspective, the prevention of entry of fake products into the country means that they cannot view, purchase and consume products that may be perceived as harmful to them.  Consider the fake pharmaceutical products I mentioned above for instance, the health risk posed is minimized.

One thing that is certain is that it is not possible to entirely prevent the manufacturing and importation of counterfeit products.  IP owners cannot successfully protect their IP in all four corners of the world.  But if IP owners can successfully implement IP protection strategies in markets they’re able to control and hurt importers where it hurts the most, there is a reasonable probability that importers of fake products will think twice.  No one wants to continue getting hurt whilst losing a lot of money, it makes no business sense.  And while importers are hurting, the public is safeguarded by IP owners and IP protection agencies like Customs from being exposed to fake products that may harm them.

Mea Vai

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