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We need a shift in collective consciousness and better enforcement of IP rights to combat the serious economic harm from fake goods, says Mauricio Galindo of Dumont.
Counterfeiting is a global issue that causes significant harm to the economy, society, and consumers. It affects not only the owners of IP but also consumers who knowingly or not purchase counterfeit goods.
In terms of the global economy, the World Intellectual Property Organization (WIPO) estimates that the value of counterfeit and pirated goods is US$509 billion annually. This represents a significant loss of revenue for legitimate businesses and governments worldwide.
Furthermore, the World Trade Organization (WTO) has recognised that counterfeiting and piracy undermine the rules-based international trading system, as they violate intellectual property rights and restrict trade.
In Mexico, counterfeiting has become a serious problem, and the lack of collective consciousness exacerbates the situation.
According to a study conducted in 2022 by the Mexican Institute of Industrial Property (IMPI), counterfeiting costs the Mexican economy around US$11 billion annually, representing 2.4% of the country’s GDP. This makes it one of the most significant threats to the country’s economic development, especially in the context of the COVID-19 pandemic, which has already caused substantial damage to the economy.
The production and marketing of counterfeited products respond directly to the consumers’ demand. However, purchasing fake goods is not only illegal but undermines innovation and creativity, harming those who invest their time, effort, and money in developing new products and services.
"Weak enforcement of intellectual property rights in Mexico allows counterfeiters to operate without fear of significant penalties, making it a low-risk, high-reward activity."
Furthermore, counterfeit products lack quality controls and safety regulations, posing risks to consumers. The proliferation of counterfeit goods also causes economic damage by reducing legitimate sales and employment opportunities. It is essential to raise awareness among the general public regarding the negative consequences of counterfeiting on the national economy and individual creators.
Lack of collective consciousness
One of the biggest challenges in combating counterfeiting in Mexico is the lack of collective consciousness regarding the value of IP and its impact on the national economy and the overall wellbeing of the country. To address this issue, it is necessary to create cultural programmes to promote respect for IP rights and raise awareness about the negative consequences of counterfeiting.
Additionally, the lack of a culture of IP rights and deficient enforcement make it challenging to tackle counterfeiting in Mexico. Counterfeiters take advantage of this situation by producing and selling fake products with a considerable degree of impunity. Weak enforcement of IP rights in Mexico allows counterfeiters to operate without fear of significant penalties, making it a low-risk, high-reward activity.
The need for collective action
Although the Mexican government has taken significant steps to address the problem of counterfeiting, more can be done to enforce IP rights. The government should allocate more resources to the competent institutions and organisations in charge of enforcing IP rights, such as the IMPI, the National Institute of Copyright (INDAUTOR), the Mexican Customs and the Special Unit for Investigation of Crimes against Copyright and Industrial Property (UEIDDAPI). It is also essential to increase penalties for counterfeiting and improve the effectiveness of enforcement measures to combat this issue.
IP holders also have a duty to exercise the corresponding legal actions against any act that puts their intellectual property assets at risk. Although there are competent institutions in Mexico in charge of the defence of IP rights, such as the IMPI and the UEIDDAPI, holders rarely exercise their rights against piracy acts. This can be attributed to the little confidence they have in Mexican institutions, lack of knowledge of their legal rights, and high legal costs.
To oppose counterfeiting in Mexico, a collective effort is necessary. It requires collaboration between the government, civil society, and the private sector. The government needs to strengthen intellectual property laws and enforce them rigorously, punishing counterfeiters and ensuring that consumers have access to genuine products. The civil society needs to raise awareness of the dangers of counterfeit products and promote a culture of IP rights.
The private sector also has a crucial role to play in combating counterfeiting. Companies can deploy more intensive watching strategies and invest in technology to prevent counterfeiting, such as radio- frequency identification (RFID) tags, holograms, or digital watermarks. They can also collaborate with the government and civil society to raise awareness of the issue and promote genuine products.
A new approach for IP professionals
Mexico has legal mechanisms that have effective results against unlawful acts regarding intellectual property, such as infringement procedures before the IMPI, civil actions for compensation of damages, and criminal actions before the UEIDDAPI. IP attorneys have a duty to push the authority and ensure that cases are resolved promptly and in full compliance with the law. They must encourage holders to exercise their legal rights and ensure that they have the adequate legal representation to protect their IP rights.
To tackle counterfeiting effectively, it is also necessary to adopt a new approach that boosts the demand for original products and content. This can be achieved by making original products more accessible and improving their quality. It is essential to develop new marketing strategies that promote the value of IP and the negative consequences of counterfeiting. The government and the private sector can work together to promote original products and increase public awareness of the benefits of buying genuine goods.
Counterfeiting and piracy are significant problems in Mexico and have a detrimental impact on the economy, consumers, and the creative industries. While there are legal mechanisms in place to combat counterfeiting and piracy, a cultural shift is needed to address the root causes of these issues.
Creating awareness among consumers about the value of intellectual property and the dangers of counterfeit goods is crucial. It is also vital to increase the resources allocated to the authorities responsible for enforcing intellectual property rights and to ensure that they have the necessary training and expertise.
Ultimately, combating counterfeiting and piracy requires a collaborative effort from all stakeholders, including the government, industry, legal professionals, and consumers. By working together, we can create a more robust legal and cultural framework that supports innovation, creativity, and economic growth.
Mauricio Galindo is the manager of the IP Litigation department at Dumont. He can be contacted at: email@example.com
Dumont, counterfeiting, IP rights, fake goods, WIPO, piracy, WTO, IMPI, COVID-19, innovation, stakeholders