Black marketing, drugs, smuggling, corruption, unemployment, and counterfeiting or piracy are some of the problems we are facing today as a nation.
It’s an undeniable fact that all these problems are grave in terms of socio-economic, ethical and moral consequences. But here we’ll try to discuss the last one, namely, brand infringement or counterfeiting.
The piracy issue has become important with the changing global trade scenario under the WTO regime. Many of us have heard the expression, “intellectual property rights” (IPRs). The infringement of these IPRs has put a heavy burden on the national exchequer as the country annually loses billions of rupees in revenue alone.
To give readers at least some idea we can define the IPRs as the rights enjoyed by individuals or organizations, mainly regrading creative works: inventions, literary and artistic works, symbols, names, images, and designs used in commerce. Such a work gives its creator the right to prevent others from making unauthorized copy of his/her property for a limited period.
Now that the mastery of counterfeiting achieved by the underground mafia has reached startling proportions in the last over a decade, it is hampering Pakistan’s tax growth and multinationals have started avoiding the country as destination of their investment and expansions.
It has also brought decline to the local economy as people, for fear of inferior quality local products turned to quality smuggled goods. In the course of last over ten years, the size of black economy in the country has surpassed the size of legal economy. When the military government took over in October 1999, it launched a countrywide drive for documentation of economy with two basic objectives: to increase tax revenue and second to assess the overall size of black and legal economies.
The military government’s drive, would also have helped in enforcing intellectual property rights and was a step in the right direction but it soon ran out of steam, apparently due to strong objections from vested interests.
Today Pakistan is considered as a country with world’s highest piracy rate, a large part of which is blamed on weak enforcement of laws. The laws in Pakistan generally protect intellectual property but theoretically speaking, IPRs protection and dealing cases of their violation are interconnected issues.
The judicial side is activated when the protection side is missing or becomes ineffective. In our case, the former is more conspicuous as the government has set up a number of bodies to enforce IPRs like,the Quality Control Board, the Agriculture Prices Commission, etc, but not with much effect. The corporate sector is justified in asserting that despite paying huge taxes, the government agencies have virtually failed to take action against counterfeit mafia.
When it comes to dealing cases of IPRs violation, we will quote the example of the tobacco industry, which pays around Rs21 billion to the government in various tax heads. The figure may end up well above Rs28 billion if Rs7.5 billion estimated loss due to counterfeiting and brand infringement in the industry be well-tackled and counterfeit mafia subdued. The information collected on this topic reveals that the law enforcement agencies are either not too well equipped or lack a will to act against an illegal activity right under their nose. There is also an impression that the counterfeit mafia has become so strong that the government is reluctant to take action against them.
For example, the authorities conducted hundreds of raids in various cities to check tobacco counterfeiting over a period of two years. The cities where the raids were conducted include Lahore, Hafizabad, Sheikhupura, Rawalpindi, Faisalabad, Jaranwala, Sargodha, Sialkot, Chiniot, Narowal, Gojra, Hyderabad etc. During these raids only a handful of persons were booked, 113 to be precise, and among these only one-third were punished. All of them were fined a total of Rs27,500 and sent to lock-up for not more than 14 days. Though insignificant it shows government’s concern over the issue.
The tobacco industry contributes about Rs21 billion to the national exchequer and giving a deaf ear to concerns of piracy could frighten away prospective investors. The other factor behind government’s concern is that Pakistan is signatory to the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and is revising laws to become TRIPS compliant.
Our country has been on “Special 301” Watch List since 1989 due to widespread piracy, and failure to implement its patent mailbox obligations under the TRIPS agreement. Though the government has undertaken the task of rewriting legislation in copyrights, patents, and trademarks and has taken steps to strengthen enforcement including raids, still there is lot to be done.