Home-grown remedies

Besides such problems of enforcement, laws on IPR in many countries are still not up to scratch. By 2006, all members of the World Trade Organisation, save the poorest, are supposed to have implemented TRIPS, an international treaty on IPR that lays down basic rules for protection and enforcement. Some countries, notably China, have tidied up their legal codes so that companies can, at least on paper, protect their intellectual-property assets. But, in practice, cases are often hard to bring to trial, and courts are reluctant to prosecute and impose criminal penalties. In America, convicted counterfeiters face fines of up to $2m and 10 years in prison for a first offence. In China, counterfeiters can still get away with a $1,000 fine, which even there provides little deterrence.

In Europe, the European Commission is working on new regulations to beef up customs action against counterfeits. It has proposed new rules to harmonise member states' legislation on IPR enforcement. This is particularly important as the EU prepares to embrace new members, such as Poland, where counterfeiting is a serious problem.

Increasingly, companies are joining together in industry or regional coalitions to deal with the issue. One of the busiest groups is called the Quality Brands Protection Committee. In China, it collects data on the scale of counterfeiting, and lobbies the government for better protection. It also educates police and customs officers on effective enforcement.

In the end, though, growth and home-grown invention are the most effective remedies to counterfeiting. In the 1960s, Japan was a hotspot for copying; in the 1970s, that dubious distinction passed to Hong Kong; in the 1980s, it was Taiwan's and South Korea's turn in the spotlight; and today it is China's. As each of the pioneer countries has developed its own industry, it has introduced laws and penalties to clamp down on counterfeiting. China will, at some point, follow the same route. But no amount of effort will ever completely eradicate the copycats. For as long as there is consumer demand, companies will find that imitation is the severest form of flattery.

Date: 2015-01-12; view: 1101