The challenge of countering fake goods
▶ The Gulf is dealing with the problem of intellectual property by tightening legal frameworks
They say imitation is the sincerest form of flattery. But while the quantity of counterfeit goods today is greater than ever before, manufacturers of the real stuff – from handbags to electronics – aren’t blushing. That is because the quality of knock-offs is being improved, making even more problems for companies’ intellectual property lawyers.
For example, fake branded trainers, the fastest growing segment of the counterfeit goods market, are becoming so similar to the legitimate, often limited-edition footwear that online marketplaces such as eBay and Amazon have employed huge teams of “authenticators”, charged with touching and even smelling shoes to ensure they are authentic before they are delivered to the customer.
Some market analysts argue that while counterfeiting is obviously morally wrong, big brands needn’t worry. Whatever the impact counterfeiting has on corporate profits, the far bigger concern, at least for law enforcement officials, is that the trade in fake goods is plugged into a much larger industry of illicit activities.
This week, Maj Gen Dr Abdul Quddus Al Obaidly, the head of the Emirates Intellectual Property Association, a part of Dubai Police, told attendees of the Middle East North Africa IP Crime Conference in Dubai that “crimes related to intellectual property are becoming more dangerous than drug-related crimes”. Indeed, much of the trade in fake goods remains in the hands of organised crime gangs. Even in the UAE, among the toughest enforcers in the Middle East when it comes to IP law, stamping out the problem is a daunting task. Last year alone, Dubai Customs encountered 15 million counterfeit items with a total value of about $20 million.
Technological change has made things more challenging for the police. E-commerce, in particular, has changed the way fake goods are moved. While shipping containers full of knock-off handbags still arrive frequently at major ports, more often these days items are shipped directly from the seller, often using untraceable accounts on digital marketplaces.
The Gulf is far ahead of the rest of the Mena region when it comes to tackling most IP crime. The UAE, which has the most sophisticated IP protection regime in the GCC, has introduced a string of measures in recent years to bring the country’s laws in line with international best practices. Earlier this month, the Ministry of Economy introduced a programme to strengthen the country’s “IP ecosystem” further. Other GCC states are refining their own legal frameworks.
But large parts of the Middle East remain an intellectual property Wild West, where chronic war or instability have left few countries equipped to take the issue seriously, even as the demand for knockoffs is rising.
The region is well-connected to the internet and has a growing population of young people with increasingly globalised tastes. In other words, they are often keen to get their hands on swanky trainers or flashy wristwatches. While counterfeits may provide them with what appears to be a cheap solution, however, for society as a whole they are very costly indeed.