With four of the nine countries that have the biggest physical markets for counterfeits, Latin America is facing serious challenges in tackling fake goods, explains María del Pilar Troncoso of ASIPI.
Counterfeiting is a common practice that is not limited by geography. Unfortunately, it involves crimes concerning all subjects and levels, and in the last few decades it has become a serious issue that requires further analysis and discussion. This is because not only governments and trademark owners are economically harmed by it, but the health, physical integrity and wellbeing of citizens are also deeply affected. The growth in the standard of living of consumers, as well as the rise of communication, has led to a dangerous increase in counterfeiting.
Traditionally, Asian countries have been associated with a widespread counterfeiting culture, but in the last few decades Latin America has also become a hotspot for the manufacture and acquisition of forgeries and fake goods. Some Latin American countries have experienced political unrest and economic difficulties, which has led to a rise in the markets for counterfeit goods because there are many low income consumers with an interest in acquiring products with a brand name.
This problem is by no means a new trend, and the experiences of other regions have served as a reference for authorities in the Latin American region. Although our governments have striven to protect intellectual property owners, their work and investments, unfortunately they could not foresee the consequences of the internet, globalisation and the fast pace of technological development.
For example, in the Dominican Republic, Law No. 20-00, which addresses IP protection, regulates the legal avenues available to pursue counterfeit cases, such as criminal charges, confiscation and/or destruction of counterfeit goods. In Ecuador and Panamá, a person can be sentenced to prison and/or be fined whenever they are proved to have commercialised, fabricated or stored any kind of counterfeit goods.
Nevertheless, even when our legislation provides the necessary weapons to fight this epidemic, the truth of the matter is that most Latin American countries have limited resources. Hence, the enforcement of IP laws is still an uphill battle.
Industry troubles
The pharmaceutical industry has resorted to assisting authorities with private investigations and special labelling processes to simplify the identification of counterfeit products. Companies such as Pfizer have discovered in Latin America around ten to 12 clandestine laboratories per year; Bayer has started a campaign called “Beware of Counterfeits” that includes special educational messages targeted at helping consumers to recognise and avoid counterfeit products. In 2008, Sanofi created the Central Anti-Counterfeiting Laboratory, which focuses on chemical and technical assessments of products, special packaging and identification of counterfeit drugs.
Although counterfeiting of medicines seems to be the most dangerous threat, other sectors also represent a health risk. Counterfeiting of food and beverages has worsened in the last few years, adding a considerable risk to the manufacturing operations, authorities and consumers of such products. Baby food, infant formula or milk substitutes, alcoholic beverages, and pre-packaged meals are some of the most counterfeited products in the food industry.
Wine counterfeiting has worsened in the last ten years, becoming one of the most complicated problems due to the difficulty of differentiating the flavour of original and counterfeit products, and because of how easy it is to deceive buyers over exotic wine varieties.
There are several examples of tragic cases when it comes to wine and spirits, such as the Torraga case in Argentina in 1993, in which approximately 30 people died after ingesting fake wine that was contaminated with toxic substances.
Public support
Sanctions against counterfeiters of pharma or food products are more likely to obtain mass support due to the harm to the wellbeing of society. If IP rights are not taken into consideration, there is always the public health factor, which greatly helps when there is a dispute. On the contrary, other manufacturers such as fashion companies do not have this additional factor, and therefore usually they cannot count on the same level of support.
The fashion industry is another victim of counterfeiting. Fake products represent a serious hazard for famous marks, as well as industries trying to develop a new market or support for new brands. In 2015, Interpol concluded ‘Jupiter VII’, an operation devoted to confiscating counterfeit products in South America. This operation concluded in the seizure of 800,000 objects with an estimated value of
$130 million.
Despite these efforts and legal protection, according to the “2015 OutofCycle Review of Notorious Markets” by the Office of the US Trade Representative, Latin America has four of the nine countries with the biggest physical markets for counterfeits, and has an affiliation with two of the 14 most active online counterfeit markets on a global scale. In 2012, the World Trade Organization stated that brand forgeries represent around $500 billion a year in sales in Latin America (8 to 10% of all commerce).
Discovering and prosecuting counterfeiters is complicated. Clandestine laboratories and factories are becoming more sophisticated, complicating the identification and dismantling process.
Pursuing and destroying counterfeits products is not enough. Consumer education on the fact that organised crime is behind counterfeiting, as well as the development of tools that facilitate the identification of counterfeit products and training of judicial authorities, are keys to promoting a safe, accountable and efficient market. Joint collaboration of trademark owners, authorities and legal practitioners has never been more imperative.
María del Pilar Troncoso is the president of the Inter-American Association of Intellectual Property (ASIPI). She is an attorney with more than 20 years of experience in litigation, counselling and legal asistance in intellectual property. Troncoso is also the founding partner of Troncoso Leroux Law Office in the Dominican Republic.
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María del Pilar Troncoso
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