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A group report on

Counterfeiting

21 April 1998

Kleiverts Business College

San Marino
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Counterfeiting

ASSIGNMENT II
Tutor’s Name: Mr. Gûrgh Wrzaz
Title: Counterfeiting
Module no: 0367
Words count: 1550
Date:21 April 1998

Submitted by:
Student ID Px512x20x
Student ID Px51x15x0
Student ID Px512x32x
Student ID Pxx12xx88
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Executive summary

Counterfeit simply means to copy something of others or fraudulent practice of

mimicking of someone else product. Counterfeiting is generally infringement of copyright,

trademark and patent right of original work. Today’s market most of the product are being

counterfeited such as movies, automobile parts, music videos, software, clothes, watches and

many more. Paper money could be the best example of counterfeited product of today’s

market. Thus, counterfeiting directly affects human life in every sector in order to reduce it or

stop this sorts of activities forgery practices is to provide knowledge or inform about negative

impact of counterfeiting.
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Table of contents

1. History ……………………………………………….………………..5

2. Definition………………………………………………………………5

2.1. Copyright…………………………………………………..…5

2.2. Trademark…………………………………………………….6

2.3. Patent…………………………………………………….……7

3. The impact of counterfeiting……………………………..………..7

4. Overviews of industries affected by counterfeiting……….…..8

4.1. Software companies…………………………………….….8

4.2. Music recording …………………………………….………9

4.3. Luxury goods and fashion clothes………………………9

4.4. Pharmaceutical………………………………………..…….10

5. Anti-counterfeiting policies…………………………………..……10

6. Conclusion …………………………………………………………..11

7. Recommendation …………………………………………………….11

8. References …………………………………………………………….12
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1. History:

Initially, in the beginning of seventeenth century at the time before American settlement,

counterfeiting emerges, when the American tribe use cylindrical shells as currency. At that time

the trader from Europeans land, fake the white shells as blue-black shells which admitted as

high value. Authority, introduce machine made coin but even that was not enough for avoiding

forgery, and then banknotes, which was more troublesome for the colony. More struggle had

seen in this transition phase, whereas, some country tried to avoid paper as money, but they

have no choice but accepting it. Even though, the authority poses threats to punish who will not

accept the paper money but the skepticism raise in the trustworthy of the bond payable. It may

not be possible to completely overcome the counterfeiters but effort has done to create work

sophisticated for forgers and for some extent authority are been able to success (Lynch, 2007).

2. Definition:

Globally there are varies form of crime that many people might not know that they are

committed frequently. The common one is counterfeiting which might not seen as a crime in

some part of nation, that may be lack of education and haphazard government policy, mostly in

the least developed and developing countries. According to “International Trademark

Association”, Counterfeiting can be defined as the fraudulent practice of mimicking or imitating

and commercializing of someone else products or innovation or created work, which is identical

or indistinguishable with the original one that already registered as trademark, copyright or
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patented. Often, valuable, high quality product and product which are easy to copy are

vulnerable to counterfeiting (INTA, 2015). Counterfeit products are commonly produce by the

other than the original companies but some company produce copy of their own original

product. Counterfeiting is generally, infringement of copyright, trademark and patent right of

original work. Before further discussion short brief about copyright, trademark and patent.

2.1. Copyright:

Copyright is an ownership of originality work, the author or creator automatically get the

right to, print, copy and distribute and oblige other to do so without permission. Copyright works

include of musical works, books, audio video, software, graphic, pictorial works and many more.

Copyright marks as sign “C” inside circle, initial published date and the author name. the

infringement of copy right entitle to a fine up to $ 100,000 or up to one year imprison or both

and other expenses for legal cost (Paradise, 1999).

2.2. Trademark:

Trademark is a mechanism that manufacturer use to distinguish its goods from others

products. It contents, brand name, identifying marks, service marks, certificate marks and

collective marks that identify the product of the company. Trademark in the product refer as the

claim ownership of company or helps to seek infringement justice in court.Offence of trademark

infringement will entitle to penalty up to $ 5,000,000 and lock up no exceeding ten years for

individual and $ 15,000,000 compensation for corporation and partnership (Paradise, 1999).
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2.3. Patent:

A patent right is awarded to the inventor of an original invention of intellectual work,

divide in three part, (1) utility patent, is discovery of chemical, mechanical or electrical

procedure, (2) design patent, is when invention of a new ornamental design, (3) and plant

patent, is invention of new variety of plant and newly found seeds. (Paradise, 1999).

3. The impact of counterfeiting:

In present time illegal trade has been common in the global industry. Either goods for general

daily product and luxurious product that directly affect human health like medicines,

counterfeiting have prevailed in every activity that relate to finance. Not only the industries but

also the government also facing problems by fraudulent activities, for instance, the annual

deficit of American business revenue reach approximately $200 billion. In some cases,

counterfeit products could be life threaten, when customer buy cheap electronic products like

mobile phone. Many news about explosion of battery and cost of life make consumers

conscious about inferior products. Moreover, it has also adverse impact in the employment of

nation. Statistic by Levin, (2009) and Ensend and Schichert-Guler, (2006) shows that,

approximately 2.5 million jobs have been lost due to the black marketing, in which only in

America 750000 and 300000 of European people lost their jobs.

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4. Overviews of industries affected by counterfeiting

4.1. Software companies

Software companies are one of the main product that are targeted by counterfeiters,

because of its simple marketing standard. Easy accessibility, less effort to obtain and ready to

sold or off-the-shelf makes these types of products vulnerable to pirated. The International

Planning and Research Corporation (IPR) report shows significant difference in the piracy rate,

and losses in the different nation, yet were decreasing than the previous years. The table below

show the varies rate of piracy and loss for different region )Vithlani, 1997(.

Software Piracy Estimates 1996

Region Percentage share of Losses in US$

world-wide total

Eastern Europe 80 800000

Middle East 79 300000

Africa 70 250000

Latin America 68 990000

Asia/Pacific 55 3,700000

Western Europe 43 2,600000

North America 28 2,700000

World-wide 43 11,200000

Source: International Planning and Research Corporation

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4.2. Music recording

Significant increase in demand and with the help of modern technology massive

capacity of production in cheap price of pirated CDs and DVDs exert counterfeiters to

music piracy. Not only some industries but some nations are encouraging CDs piracy,

furthermore, some claims that behind CDs piracy a large scale criminal operation is

involve. The international federation of the phonographic industry (IFPI), report show the

highest infringement in CDs piracy mainly cassettes occur in the Russia followed by

brazil and the least is Malaysia less US$4 million than Greece which is US$ 22 million in

the year 1996 (Vithlani, 1997).

4.3. Luxury goods and fashion clothes

Counterfeiting of luxury items is treated as soft crime, as the value of the product

is immensely high that some customers may not afford the genuine item. For instance,

clothing of inferior fashion garment labeled and attach high branded where hunt down by

the UK custom official in 1997, amounted 4.25 million. Yet, counterfeiting of these types

of products might be better opportunity for low income customers however, for the

traders it will facilitate to deceive the original buyers (Vithlani, 1997).

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4.4. Pharmaceutical

The main victim of these fake products are mostly of the developing or least

develop countries. Weak drug regulation, lack of education, lower income, short supply

of medicines and corruption in the health care makes the countries vulnerable to use

mock medicines. As much as sixty percent of total fake medicine consume in the

developing countries. For instance, report of WHO/IFPMA, 1992 shows, sales of one

fourth of sample medicines appeared to be genuine in Nigeria (Vithlani, 1997).

5. Anti-counterfeiting policies

As counterfeiting is rising as a great trend carrying large amount of total global

economic value as much as $650 billion every year, All the companies and related

organization as well as government officials should consciously act on this issue.

They need to bring some strong policies and regulation to stop this act. Not only that the

companies need to bring awareness programs so that people will be aware of such

pirated products. Counterfeiting is seen in almost all sector of the economy. It is also

called black market which escapes from normal tax and tariff payment. Such pirated

products may not be suitable for consumers in regard with their health safety and

bringing market fluctuation. We need to develop anti-counterfeiting technologies to

check the products and make to fight against it as well as develop mechanism of public

private partnership in order to stop counterfeiting.

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6. Conclusion

This report projects the current trend of counterfeiting and its effects to the

contemporary business holder. Almost all the products have been the victims of

counterfeiting. The ways of counterfeiting are different. The counterfeiting trend is increasing

day by day because people can get almost same quality products in cheaper price. Various

industries like medicine software toys music videos and so on are badly affected by

counterfeiting. Though there are various organization who are working to control

counterfeiting, They cannot completely stop this process. Industries or organization should

be able create mass awareness on the people so that they may buy only genuine products.

Similarly, the government should make strict policies and acts accordingly.

7. Recommendation

In this report, we try to point out the trend of counterfeiting and its impacts on the

government, business owner and the consumers. we trace the sector of counterfeiting and

presented some of statistics. We recommend the following to avoid counterfeiting:

 Aware consumers about the genuine products and effects caused by duplicate products

 Regular monitoring on the products by the government authority time to time

 Design the products uniquely so that others cannot copy it easily

 Strengthen law enforcement for anti-counterfeiting activities

 Use new technologies like hologram smart card and biometric markers to protect the

authenticity of the products.

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Works Cited

Lynch, J., 2007 .The golden age of counterfeiting[ .Online ]

Available at :https//:www.history.org/Foundation/journal/Summer07/counterfeit.cfm

[Accessed 15 April 2016.]

Paradise, P .R., 1999 .Trademark countereiting, product piracy and the billion dollor threat to the

U.S economy[ .Online ]

Available at :

https//:books.google.dk/books?id=ny0vvUpBzCYC&printsec=frontcover&dq=counterfeiting&hl=e

n&sa=X&redir_esc=y#v=onepage&q=counterfeiting&f=false

[Accessed 13 april 2016.]

Sowder, A., 2013 .The Harmful Effects of Counterfeit Goods[ .Online ]

Available at :http//:www.athens.edu/business-journal/spring-2013/asowder-couterfeit/

[Accessed 15 April 2016.]

Vithlani, H., 1997 .The economic impact of counterfeiting[ .Online ]

Available at :https//:www.oecd.org/sti/ind/2090589.pdf

[Accessed 15 april 2016.]