Protecting IP rights does protect against counterfeiting
Wednesday, January 20, 2010
New anti-counterfeiting laws may not be a silver bullet against dangerous fake products, but Sisule Musungu is wrong to claim that IP protection cannot affect the quality of goods—and way off the mark in his conspiracy theories about IP being a sinister trade tool of “the West”.
Thankfully he differentiates between different forms of IP in the interview (patents, copyright, trademarks) and it’s important that laws do the same. Further, new laws are no use if they’re not implemented fairly and efficiently. Head of the Nigerian food and drug regulator Paul Orhii recently explained: “[Counterfeiting] criminals, who are usually very wealthy, very often go scot-free in court … in Nigeria the litigation process is very sluggish. Some cases last for more than 10 years in one court…”
Without a strong rule of law, new laws are pointless.
However, trademark protection plays a considerable role in improving the quality of products and protecting patients against fakes. While a trademark itself doesn’t involve quality testing, it identifies the producer to patients and authorities—allowing both to take legal action if the product is harmful. It is no coincidence that counterfeiting and substandard products are rife in parts of the world where trademarks cannot be protected.
Sisule Musungu says that “a trademark only tells you about the reputation of the company”, without acknowledging that such a reputation will likely rely on quality more than anything else.
Trademarks are a unique kind of intellectual property, in that they do not just protect the producers and their innovation: they also help patients choose products that they trust, while poor quality products attract a bad reputation and are shunned. Patients can be tricked into buying bad products when trademarks are faked but, if trademarks and individuals' rights are protected, counterfeiters are taken to civil or criminal court and punished, deterring the crime.
History suggests that the quality of goods (such as medicine and food products) increases precisely when trademarks can be enforced, and brands are allowed to compete amid a competitive market. In nineteenth-century Britain, food contamination was a common problem, especially due to copper usage in the production of certain goods. As a consequence, some companies gave up ‘coppering’ – such as Crosse & Blackwell, the producers of pickles. Initially their sales fell, yet soon people realised the safety benefits, and the company went on to become the trusted, successful brand it still is today. Trademarks, competing on quality, raised the safety standards in an open market.
Trademarks are not the preserve of ‘Big Pharma’, or large Western corporations. They are equally important in allowing generic producers and small companies to signal to customers that their products are of high quality, and protecting their reputations (and the health of patients) from counterfeiters. To rubbish this proven system is extremely unwise, given the problems suffered in less developed countries with fake medicines.