Illicit trade involving counterfeiting, naturally a very harmful form of encroachment, could easily injure the rightful ownership of an intellectual property; and in Malaysia, counterfeiting is not taken lightly. In the eyes of law, infringement of intellectual property is a serious offence, with possible civil or criminal prosecutions against an infringer. Basically, if you own an intellectual property right, you can demand any person that is infringing or likely to infringe it to stop the infringement, at least before embarking onto expensive court trials.
Drop in numbers
With the legal frameworks appropriately executed, eradication of counterfeit goods in Malaysia has been conducive to date, with statistics showing a decrease in numbers from year to year in the past decade. Last year saw the least number of cases to date, with 409 cases and seized goods worth RM3,570,857.51. Just six years ago, there were 3,914 cases with goods worth RM98,166,687.27. This is also a drastic drop when weighed against the 1,528 cases recorded in 2008. The market is less tainted with counterfeit products these days, and the enforcement activities have correspondingly dropped in numbers, according to Mohd. Roslan bin Mahayuddin, the Director General of the Enforcement Division at the Ministry of Domestic Trade Co-Operatives and Consumerism. This year however, barely within the first three months, there is already a record of 235 counterfeit seizure cases. Ranging from foods and medicines to clothing and leather products, this figure could be cause for concern. Clothing and leather products seem to lead the count, amounting to roughly 41% of the total cases. In contrast, the same range of goods collectively took up about 34% of the total number last year.
Malaysia as a transit point
According to Roslan, the immediate strategies of the Enforcement Unit of the Ministry are primarily focused on eradicating sugar and petroleum smuggling, and generally blocking the resources for other counterfeit products as well. Unfortunately, as good as the statistics above look on paper; it may not be the case in real life. In regard to this, Roslan said that Malaysia could possibly be a transit point on the rise. There are no clear indications as to the source of the counterfeit goods, and there is no information on Malaysia’s involvement in the crime syndicate. A noticeable proof is nonetheless seen in the trade of certain China-made food products that are sold in the United States, such as packed green peas, which are relabelled to indicate as if they were manufactured here. Along these lines, counterfeiting of other common goods such as medicines, machinery and spare parts, and mobile phones have also increased in recent times.
The border enforcement measures by the Malaysian Customs have not been effective as well, with only a small number of infringing goods being detained for further action by the Ministry. Interestingly, these enforcement measures do not necessarily require a complaint filed by a rights holder all the time, and may independently be executed through an ex officioprocedure. In any case, brand owners or their agents will need to work closely with the Customs Department.
Enforcement buckles up
On the other hand, the Ministry is unwavering in its actions against counterfeiting, gradually putting down the international perception of Malaysia being a favourite hotbed for this crime. At present, there are in fact a large number of cases pending hearing in our courts. In Johor, the Federal Territory of Kuala Lumpur, and Selangor, the Enforcement Division, in a break from previous practice, now has about 20 deputy public prosecutors (DPPs) from the Attorney General’s Chambers directly working in the Division to provide a more effective prosecution of offences in the Courts. Investigations are conducted with more thoroughness. In theory, all these enforcement bodies are empowered to act against such organised crimes under various individual Acts in Malaysia, some of which include the Trade Descriptions Act 1972, Price Control Act 1946, Direct Sales Act 1993, Weight and Measures Act 1972 and the Copyright Act 1987. Now intellectual property disputes are handled by specialised IP Courts.
Apart from that, most hotspots, including a number of malls and Petaling Street in Kuala Lumpur, Batu Ferringhi Road in Penang and Johor Plaza in Johor, are already under the watchful eyes of the Ministry. With a predetermined KPI (Key Performance Index) rating, the Ministry, as well as individual state authorities, aim to reduce these pirated good retail outlets by 30% this year and 50% next year. When questioned on methodologies of implementation, Roslan explains that on normal occasions, surveillance of the hotspots is done prior to identifying and monitoring them. With over 460 hotspots identified nationwide, the authorities also have other ways of collating information.
With all these measures in place, the public may question the outcome or success rate. It is assuring then, to note that with DPPs working closely with the Ministry, the courts have seen more convictions with higher scale of compounds likewise imposed.
Role of public in the picture
Consumers and more importantly, rights holders, are a vital part of the system, in the preliminary phase at least. Once a complaint is filed and a raid conducted, a detailed report by the relevant panel will then be sent to the DPPs. Upon a successful discovery, goods confiscated at such premises are destroyed after a given period if no claims are made. Raids are, however, inconclusive, says Roslan. Some factories knowingly keep no records or traces of its ownership, thus leading the discovery to a blind alley.
Above all, when it comes to consumer protection against counterfeiting, there must be a balance of interests. Roslan notes that the public plays an equally significant role. He advises consumers not to buy counterfeit products, but to strike back by initiating complaints against the infringers. The Ministry’s standard operating procedures are given ISO recognition, and as such, the anti-counterfeiting process should not be very challenging for any average-level consumer. Many a time, in fighting against counterfeiting, consumers and politicians in our country have requested for the readjustment of prices for original goods in accordance to our GDP rate; but the extent of such readjustments is still not very clear.
Our neighbours, hard at work
The government appears to have significantly improved its enforcement measures, based on the above, but the finishing line is still far ahead. When counterfeit goods are already within the country and sporadically spreading due to “undefended” border points, curtailing the trade of such goods and the network of distributors is no longer an easy mission. Notwithstanding any ongoing preventive strategies, anti-counterfeiting in Malaysia clearly still requires ample work.
In contrast, our regional neighbours such as Singapore, China and India appear to have been progressing better, to some extent. In China, the relevant authorities, such as the Administration of Industry and Commerce (AIC) and General Administration of Commerce (GAC) undertake actions very swiftly, albeit posing a low compound against infringers. In India, high importance is given towards companies whose products are at risk of counterfeiting, cropping the problem right from the roots. In Singapore on the other hand, strong border enforcement measures are significantly producing satisfactory results in the protection of rights holders.