The Holography Times Vol.

7, Issue 21

Cover Story

Combating counterfeiting: Trade associations become proactive

By C S Jeena
Each and every product from a pencil to aircraft has a trade association formed with an aim to facilitate the business environment for its member companies. Today, in India more than 300 State level industry-trade association exist representing more than 7,00,000* companies. While they are playing an important role in modern and global economies, there are various hindrances which affect their industry / sector growth. Product counterfeiting is one of them. It is affecting all categories of products, but the impact is very high in sectors / product categories like fast moving consumer goods (FMCG), pharmaceuticals, electronics, automobile, aircraft parts, beverages, etc. To address this issue, various trade associations have come forward and are playing a proactive role in curbing this menace. This article highlights their activities and the role trade association can play in curbing this menace to a large extent.

Introduction:
Brand counterfeiting in India is not a new phenomenon. Brands are under attack in various forms such as counterfeiting,piracy, duplication, pilfering, tampering and adulteration of product. These attempts are nothing but an attack on the brand and hence a major risk to the value of the company. Brand attack has many ill effects, the key ones being; a) Reduces the brand value, customers conidence, market share and proitability of a company. b) The brand attacker, who supplies a duplicate or counterfeit product, does not pay any taxes. It is a loss to the collection of taxes for various governments. c) There are reports in the

press mentioning that proits from suchil legal activities are going to terrorists and banned organisations. d) Counterfeiting also sometimes results in the unfortunate loss of human lives. Risk to the Brand must be taken with all seriousness The Government of India is doing its best in developing suitable laws, educating police force and judiciary to deal with litigation arising out of brand attack. However, legal process takes its own time and the attacks on the brand continue. As brands are amongst the most valuable assets of companies, industry association can play a vital role in providing effective information and advising proper anti-counterfeiting strategies to their members.
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* Ministry of Corporate Affairs

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The Holography Times Vol. 7, Issue 21

Well, rst off all a trade association is a medium. A way to get in contact with companies in a certain industry. But also trade associations can advise their members, and play a role on behalf of their members towards governments. The ideal situation is when membership to an association is a guarantee to the quality and origin of a product. In that way, associations need to check and verify memberships. - Eef de Ferrante Director at Active & Intelligent Packaging Industry Association

Importance of industry association in curbing counterfeiting

According to Eef de Ferrante, Director at Active & Intelligent Packaging Industry Association, Well, irst off all a trade association is a medium. A way to get in contact with companies in a certain industry. But also trade associations can advise their members, and play a role on behalf of their members towards governments. The ideal situation is when membership to an association is a guarantee to the quality and origin of a product. In that way, associations need to check and verify memberships. Big trade associations such as FICCI, CII and ASSOCHAM have discussed and taken up the ight against the menace of counterfeit at various forums highlighting the loss to the brand owner, government, society and to consumers. There have been seminars and meeting with government for law enforcement. These are all useful initiatives, but, it is now imperative that the work done so far is taken up to a new level, keeping mind the fact, that in this ight there is also a need to continuously look for new innovative solutions and approach by each Brand owner/ company. Proactive steps Rather than wait and watch and then a reactionary step in ighting the menace, the associations ought to educate their members
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that Prevention is better than Cure, and they could consider taking the undernoted proactive steps to help their members protect themselves against the onslaught of counterfeiting. 1. Educating members about menace Association website can play vital role in educating its members through their website. For example, National Electrical manufacturers Association (NEMA) , USA has taken the menace very seriously and considered anti-counterfeiting as a matter of public policy and classiied an special section on anti-counterfeiting at their website. http://www.nema.org/ Policy/Anti-Counterfeiting/Pages/ default.aspx. Through this NEMA have started various services for its members such as anticounterfeiting news, assistance to members, useful links etc. In India, FICCI, which is one of biggest industry associations, is working on same line and has recently formed a forum called Committee Against Smuggling and Counterfeiting Activities Destroying Economy (CASCADE) with an aim to generate awareness on the impact of these menace amongst consumers and citizens. The forum has launched a website www.icci-cascade.com (see igure1) which clariies various issues on counterfeiting. The website educates its member and consumer via industry news, awareness brochure, and discussion forum. The

The Holography Times Vol. 7, Issue 21

Cover Story

Fig1: Screenshot picture of FICCI website

Efforts to counter this menace needs highest priority and calls for robust actions from all stakeholders

website also updates latest and articles and best practices adopted by companies around the world against counterfeiting. According to Anil Rajput, Chairman FICCI CASCADE, Counterfeiting and Smuggling are increasingly becoming a hugely lucrative business causing not only a great loss of revenue to the industry but also posing a serious threat to the security of the nation. As a result huge amount of investments goes in dealing with anti- social elements that is neither good for legitimate industry, for government nor for consumers. Efforts to counter this menace needs highest priority and calls for robust actions from all stakeholders. 2. Educating consumers While educating the member companies lies under the responsibility of trade association, mass consumers can be educated in similar with the help of consumers organisation / associations.

3. Assistance to members in adopting authentication technologies Today, there are over 100 product security technologies (holograms, digital watermarks, DNA taggants, security inks, serialisation etc.) used by manufacturer to combat counterfeiting. Such solutions can be applied on the primary or secondary packaging. For an individual manufacturing company, it is challenging to understand the scope and eficacy of each of these technologies. The technology has to be understood, the right features have to be identiied, the cost of adopting the solution has to be looked as also the logistics affecting the deployment of the solution all across the markets that the brand is present in. Trade association can provide guidelines to their members in order to reduce this burden. For example, Association such as Organisation of Pharmaceutical Producers of India (OPPI) have prepared and uploaded anti-counterfeiting
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The Holography Times Vol. 7, Issue 21

Fig2: Screenshot picture of NEMA website

Trade Association can provide and update best practices amongst each other

guidelines for their members in order to help their members in establishing requirements that facilitate authentication and discourage counterfeiting (www. indiaoppi.com/publication.asp). Similar guidelines are also being provided by National Electrical manufacturers Association (NEMA), in USA (www.nema. org/Policy/Anti-Counterfeiting/ Pages/default.aspx) see igure2. 4. Sharing of best practices against counterfeiting Trade Association can provide and update best practices amongst each other as it is easier for them to collect information in comparison with member individual member companies. 5. Encourage member to consider brand protection as CSR They can ask each member to report to them and/ or in their annual reports to share holder, actions taken by them to mitigate

risk to their brand that will also protect their consumers. This will be a good corporate governance practice and an excellent CSR. Such reports will strengthen Trade Associations case for stricter law enforcement, as Trade Association can now irst show what their members have done and what they expect in turn from the law enforcement agencies. The excellent example set by GlaxoSmithKline can be seen at www.gsk.com/responsibility/. 6. Seminar / Exhibitions The Trade association can arrange seminars on counterfeiting and corporate responsibility. The target audience for this seminar should be CEOs, Heads of the companies and Brand Managers. Alongwith the conference there can be an exhibition of anticounterfeiting/anti-piracy technologies. Trade associations can take help of authentication technologies association in this regard.

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The Holography Times Vol. 7, Issue 21

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S.no 01.

Name of Trade Association

Country

Initiative Anti-counterfeiting guidelines issued on their website for members. Portal launched on sensitising consumers against counterfeiting.

National Electronics Manufacturers Association USA (NEMA) Federation of Indian Chambers of Commerce and Industries (FICCI) Organisation of Pharmaceutical Producers of India (OPPI) Indian Cellular Association India

02.

03.

India

Anti-Counterfeiting guidelines issued on their website for members. Adopted anauthentication technology on their handsets and educated the consumers about the same through their website and mass media campaigns. Adopted an authentication technology on the products and educated the consumers about the same through their website and mass media campaigns. Updating member on counterfeiting news. Awareness against counterfeit products. Anti-Counterfeiting guidelines issued at website for members. Investigating possible projects related to counterfeit components. The SIA Anti-Counterfeiting Task Force (ACTF) is working on a variety of fronts to stop counterfeits from entering the market place. Developed the innovative counterfeiting seizure maps, the live seizure report, the news archive and the case study database.

04.

India

05.

Silk Mark Organisation of India

India

06. 07. 08. 09.

Electronic Retailing Association European Semiconductor Industry Association International Electro technical Commission International Electronic Manufacturing Initiative (iNEMI) Semi-Conductors Industry Association

USA Belgium Switzerland Global

10.

USA

11.

Counterfeit Intelligence Bureau

UK

Table: Anti-counterfeiting initiative taken by some trade association

7. ISO Standards The International Standards Organisation has recently introduced a new standard, ISO 12931 titled Performance criteria for authentication solutions used to combat counterfeiting of material goods. This standard sets out the overall strategya brand owner should adopt to ight the menace of counterfeiting. These days ISO 9001 and ISO 14000 implementation are widely adopted. Associations of Industries that are prone to counterfeiting should take a lead in helping their members understand this standard and also implement this for the overall beneit of the industry. As a further initiative, the industry associations should also build an environment that respects intellectual property. Members

should be encouraged to Patent their innovations so that they are able to reap the beneits of their research and development. In conclusions, it would be apt to say that an industry association is formed to serve the cause of its members at large and one of the greatest threats today to any successful products is the counterfeits and lookalike products. An industry association should look within and decide whether it is doing all that it can to protect its members. In case any industry association feels that it needs some additional information and advice, the Hologram Manufacturers Association of India will be more than happy to help in their endeavours to ight counterfeiting. Please feel free to write to us at info@homai.org.
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Effective Efforts

The Holography Times Vol. 7, Issue 21

ighting counterfeiting
Established in 1926, National Electrical Manufacturers Association (NEMA), headquarter in Arlington, Virginia is world leading association of electrical equipment manufacturers. Representing more than 450 members the worldwide annual sales of NEMA-scope products exceed USD 120 billion. Its mission is As the voice for the electrical and medical imaging industries, NEMA is a pacesetting champion for safety, innovation, interoperability, environment, and market enhancement through advocacy, business information, and standards for products, systems, and technologies.

IN 2002, Several NEMA member companies began to recognize the growing presence of counterfeitelectrical products in markets around the world. These counterfeit products bear the unauthorizedtrademark of a genuine electrical manufacturer and the unauthorized mark of a certiication or testorganization. Some of them incorporate unauthorized, patented technology of NEMA members. NEMAs anti-counterfeiting program helps its member companies understand and exercisetheir intellectual property rights. Because counterfeiting is a global problem that affects certiicationmarks as well as manufacturer brand names and trademarks, NEMA includes in its programsuch certiication organizations as Underwriters Laboratories and the Canadian StandardsAssociation. NEMA secured the participation of Canadian and Mexican tradeorganizations representing electrical manufacturers and carries on a dialogue with European counterparts as well. The NEMA Anti-Counterfeiting Coalition program has three main components:

Education and training: This involves developing best practices to assist members in protectingtheir intellectual property and enforcing their legal rights, including working with customs and otherlaw enforcement authorities. It also requires networking with manufacturers and other trade groupsmutually interested in the counterfeiting problem. Documenting and publicizing the problem: NEMA prepares reports and press releases for distribution toinform the public about counterfeit electrical products. Public policy advocacy: Counterfeiting is an internationally recognized crime. It has been documented that counterfeitelectrical products present substantial health and safety concerns. NEMA is an advocate for greater publicresources devoted to combatting this crime, keeping counterfeit goods out of the marketplace, improving coordinationamong state and national governments, and strengthening law enforcement programs. For more visit www.nema.org

Figure : Ad campaign by NEMA www.homai.org

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