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They
seem to be in galore everywhere. Strut
around the souks and it is not just a
possibility that you might find the fakes.
In some cases it is so blatant that you
need not have to point a magnifying glass
to sift the illicit from the original. But
slowly the rogues are finding the turf
thorny in the UAE. Particularly so in
Dubai with an alert Department of Economic
Development (DED) keen on manufacturers’
demands to stamp out the fakes from the
market altogether, and they have been
astonishingly effective in many cases.
Legal experts say that the laws need to be
more draconian to deal with the
counterfeit plague, which could slap a bad
reputation on any host country, as a lax
state in protecting intellectual property
rights (IPR). Governments, according to
legal experts, should not let people who
ply the illegal trade with easy penalties
so that they might make a comeback. Sooner
or later the law may add more penal
tentacles to it and will bare more spiky
fangs that would seek to drive away the
menace of trading in counterfeit products
in the emirate.
When
Push Comes to Shove
No
doubt that it is the big players in the
market who have queered the pitch for the
raids on traders who stock fake products.
Selling fake goods is like hacking into
the ubiquitous brand equity of a
company’s product, a piggyback ride to
profits on somebody’s good work. Of late
there seems to be a flurry of activity on
the fake front with the government
departments joining hands with major
global players in the UAE to ferret out
fake stocks. The issue is now much alive
in the public eye also with manufacturers
in various sectors of the industry making
their battle against counterfeits known.
For instance only recently the auto
maintenance and accessories subsidiary of
General Motors, AC Delco, did a media
briefing on their strategy to counter the
spread of fake parts in the UAE and
Kuwait, after a successful campaign in the
Kingdom of Saudi Arabia. Close on the
heels of the announcement by AC Delco, a
group of multinational auto manufacturers
who have good footing in the Middle East
market said that they have joined hands to
guard the market from being poached by
fake spare parts.
From
talcum powder to brake linings
The shadow market has been pretty well
spread, from low-end to hi-tech. World
over counterfeits have been a problem to
reckon with and like all open economies
the UAE has been no exception. Fake auto
spare parts have been an issue in the
minds of auto dealers and manufacturers
alike for long. Some time back Al Habtoor
Motors had highlighted the issue of fake
auto spare parts that were detrimental to
the safety of drivers in the UAE, and the
need to take action against the malaise.
In fact in early 1997 a body to fight fake
auto parts – GUARD (Genuine UAE Auto
parts Retailers and Distributors) was also
mooted though nothing much has been heard
of it for some time now. Similarly, there
are other car dealers who are aware of the
problem and have voiced concern over the
issue. The chapter on fighting fake spares
in the auto industry seems to have got
resuscitated again with AC Delco’s
announcement that the fake parts in the
Middle East is a whopping $200 million
industry. The GM subsidiary is running a
global campaign and in its first lap of
checking out the Gulf countries, AC Delco
found that about 50 to 60 of their major
product lines, including key components of
automobile brakes were fake in Saudi
Arabia. The check-run has just begun in
the UAE.
“The menace has reached a
critical proportion and these are very
unscrupulous businessmen, who peddle these
wares,” said Tony Bol, manager, General
Motors Global Security, who was in Dubai
recently to announce the company’s
strategy to take on the counterfeit trade.
In Saudi Arabia AC Delco filed 2,000
complaints in Jeddah, Dammam and Riyadh
and a
number of raids were conducted with
official cooperation. Later major auto
manufacturers also announced joining
together to fight the menace.
Copycats have invaded into many other
industry segments in the UAE. There have
been cases of imitations of major brands.
Some time back large quantities of
counterfeits of Italian Trussardi were
unearthed in raids in Dubai and Abu Dhabi.
Another case is that of CK Calvin Klein.
Counterfeits of CK products were found and
seized from three emirates of the UAE. In
electrical products moves were made to
stem the widespread illegal trading in
substandard products by the UK-based
Electrical Installation Equipment
Manufacturers Association (EIEMA) this
year. The operation was codenamed
Operation Electric Cat. The raids were
successful in Dubai and the association
was able to stem the tide of the re-export
of bogus products to Africa. EIEMA has now
extended its campaign to other countries
in the region including Oman. There have
been reports about outright fake mobile
phone accessories, not to speak of
parallel imports of mobile handsets that
are re-configured to be used in the local
GSM network by breaking the sim-lock.
Government bodies including the Dubai
Customs, the Ministry of Information and
Culture, municipalities have all taken
actions against the spread of fake
products in the market. Counterfeit CDs,
audiotapes electronic disks, watches etc
have been found in raids and destroyed.
This year in January the Commercial Crime
Section of the CID in Dubai Police had
announced the largest seizure of
counterfeit cigarettes in the history of
Dubai. More than 120 million sticks of
fake cigarettes including 90 million fake
Marlboro cigarettes reported at a value of
Dhs 27 million were found. Another
instance is of fake Seiko watches and the
master dealers along with government
bodies have managed to control the tide of
substandard products. The Seiko
counterfeiting was so virulent that
dealers even wrote a letter to the DED
asking to cancel trade licenses of
shopkeepers who stock fakes. As for the IT
sector software piracy, thanks to the
effective intermediation of the Business
Software Alliance (BSA) the menace seems
to be coming under control.
Need
razor-sharp fangs
The UAE is a member of the World
Trade Organisation (WTO) and World
Intellectual Property Organisation (WIPO).
The country issued a decree in 1996 for
accession to Paris Convention for the
protection of industrial property rights.
According to legal experts the laws that
the emirate has, can sufficiently protect
intellectual property rights (IPRs) and is
compliant with TRIPs (Trade Related
Intellectual Property Rights). Counterfeit
trade is a violation of IPR and under the
current legal framework the UAE can take
action against the fake products to
protect the interests of original
manufacturers. The emirate has the trio
legislation - TradeMarks, Patents and
Copyrights laws in place since 1992, which
the country promulgated as a prerequisite
to the country’s accession to the WTO.
It is quite puzzling to see why it should
be on the Special 301 watch list of the
USTR for violation of IPRs. Perhaps that
is why there is a flurry of activities on
the counterfeit front to prove in double
measure that the policy of the government
is to stop the shadow economy on its
tracks. It is also expected that the
federal government is in the process of
amending the Trademarks law to give it
more teeth that can it bite into the
malaise with vengeance. According to legal
experts it is not the law that is wanting
but the execution of it. Plus there is the
complexity of the legal process, varied in
different emirates, in the attitudes of
following it, and executing it.
Counterfeits are sure to eat into the
trade if not stopped on a fast-track
basis. It would put a black mark on a
country’s retail market, however open it
is.
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