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When buying an expensive item for cheap…
 

Romans Baumanis represents CIPR in the Baltic States from the CIPR regional hub in Riga, Latvia.

Reebok sports shoes with sole that wouldn’t bend. Is it possible to run in such shoes at all? Nokia cell phone batteries that are exploding. Philips kettles that stop heating after third time of use. What is this? A defective item? Could be. But may be it’s counterfeit.

Consumers in Latvia as well as anywhere else select goods of globally known brand names or trademarks. In such way we are consciously buying a particular quality as well as affiliation to the desired circles of society and appreciation from others around us. Especially the first aspect — the quality of a product, which can be guaranteed by a company with a name, is the argument that should have convinced the consumer not to purchase counterfeits. Ignoring the requirements for intellectual property protection we can say: "Oh, man, does it matter whether the label on the item is original or counterfeit? Isn’t it all the same? As long as it wears well or works properly it’s fine!" Could be. But then who is going to guarantee the quality?

Every eighth purchase is counterfeit

As Mr Gennadijs Maskovs, the Head of Enforcement Division, National Customs Board told: "The number of counterfeits in the world is growing constantly, especially of products from countries defining the fashion across the world — Italy, France, Switzerland. Also the variety of counterfeit goods is expanding. They used to be music recordings, then — textiles, but now it can be food, beverages, souvenirs, perfume, cell phones, etc."

Specialists have estimated that counterfeit goods comprise 10-14% of globally sold consumer goods. In the past mainly luxury items were counterfeited, however nowadays it can be anything popular among the consumers. The highest increase of counterfeit goods observed on the external borders of the European Union are, for example, household electric appliances rather than textiles from known fashion designers. Though, it is not possible in Latvia to gather statistics data on the amounts of counterfeit goods in the country.

Watchmen of foreign brand names

Intellectual property of various world manufacturers in Latvia are protected by CIPR (Coalition for Intellectual property Rights and its manager Mr Romans Baumanis. Among other companies the Coalition protects such familiar names as Coca-Cola, Intel, Nokia, etc. It represents in total 140 members.

"By providing practical assistance we are trying to reach position where the rights of the companies in the Baltic States would be as protected as they are elsewhere in Europe" explains Mr Baumanis. He mentions that during the last four years flow of counterfeit goods across the external border of the EU have increased 900 times. "It involves well-organised international groups. Intended production and development of transportation routs take place in different countries and there is a whole system for implementation of such projects" notes Mr Baumanis.

Both in marketplaces and large shopping centres

When I suspiciously asked a salesperson in one of Riga’s markets for manufactured goods is the displayed sports wear for children with Reebok brand name original, she answers with certainty: "Of course, it is!" When asked why it costs so cheap — a thoughtful silence was the answer. It is the low price of any item of world-known brand names that gives a signal of the goods being counterfeit.

Counterfeit goods are more often sold under open-air — in marketplaces and fairs. Assumption that the amount of counterfeit good sold in large shopping centres could decrease is wrong. Also in this seemingly fixed sales environment the CIPR has managed to identify different violations. Tenants of particular shopping centres consider their reputation as very important and after preliminary notification and informing they have discontinued selling of counterfeit goods.

CIPR in co-operation with company representatives and the Police perform frequent inspections and every time they find violations. For example, some time ago representative of the CIPR and Nokia went on inspection and within the activity they closed the shops of the respective retail chain. The goods were withdrawn and all counterfeit products were eliminated. Currently the company has restarted its operations and is not dealing with such silly activities anymore, because another such attempt may result in a criminal case. Recently the CIPR stopped a business plan of one local producer, which supplied carpets with brand name on them to a company selling luxury cars.

Perhaps, large group of society does not realise yet that handling of counterfeit goods is a serious crime. "Illegal use of a trade mark is use of property owned by somebody else! Intellectual property is an intangible, but anyway protected" points out Mr Baumanis. He is certain that when a merchant has ordered counterfeit goods from a warehouse or by other means and are saying that he didn’t know that — he is actually pretending. Traders are very well aware what supporting documents and markings must be in place.

"I am not trying to raise panic, but consumers must look at what they are buying and must be aware that retail environment is not pure" invites Mr Baumanis.

Customs office learns to detect

Specialists from the Customs, Economic Police and other institutions in Latvia as well as elsewhere around the world are trying to minimise the flow of counterfeit goods at least slightly. After 1 May 2004 the work of customs office regarding combating the counterfeiting of goods has become even more complex, admits Mr Gennadijs Maskovs, the Head of Enforcement Division of the National Tax Board under the State Revenue Service. "As the free flow of goods within the EU takes place without customs supervision it is now more difficult to obtain information on transportation of counterfeit goods and prevent respective offences" he explains.

On the regular basis courses of improvement of professional skills are being organised for customs experts. Meanwhile active co-operation with representative offices of various brands in Latvia is taking place, thus helping to learn more about the subject. During training sessions the customs officers have the opportunity to compare original products with counterfeits in such way learning about the most essential differences. Mr Maskovs agrees that the manufacturers of counterfeit goods are becoming far more proficient, however the professional knowledge of specialists from supervising authorities is also expanding rapidly.

Customs officers themselves can detect counterfeits quite precisely, at the same time always requesting a presence of a representative of the particular brand in order to confirm such attempt of counterfeit import.

As the customs office is well informed about which particular companies have the exclusive distribution rights regarding any exclusive goods they can in case when, for example, shipment of Versace brand textiles are being imported by other entity be sure that the doubts of counterfeit import are grounded.

Ask for compensation

Consumer Rights Protection Law provides seven contractual conditions regarding purchase and one of them protects a customer also against purchase of counterfeit item. So far the most popular reference article of the law regarding collection of compensation was in case of purchase of defected product.

Ms Marite Jegere who is the Acting Director of the Consumer Rights Protection Centre agrees that there have been requests for compensation of losses incurred from purchase of counterfeit goods. Consequently, if a consumer finds out that he has bought a counterfeit product he must show the purchase receipt and then request the salesperson to return the paid money or replace the bought product for other. If such procedure doesn’t take place both parties must agree upon expertise and where it will be performed. If the dispute situation can not be settled in the shop he may seek assistance at the Consumer Rights Protection Centre.

The buyer can request the seller to return money or replace the item for other, but there are not any provisions defining that the counterfeit product must be replaced with respective original product.

REFERENCE

• Features of a counterfeit: low price, poor quality, doubtful marking.

• Counterfeit goods mainly imported from China, Indonesia, Malaysia, Turkey, the United Arab Emirates can be transported to Latvia both in a container or a single bag.

• The attempt to import to Latvia counterfeit goods can be due to administrative liability. A natural person can be fined in the amount up to 250 LVL, but legal entities the maximum penalty can be up to 5000 LVL. The Code of Administrative Offences provides for confiscation of counterfeit goods.

• In 2004 the Customs office has detected 35 shipments of counterfeit goods — 2 cases per month on the average.

• The CIPR (Coalition for Intellectual Property Rights) Latvia Chapter in 2004 without extensive efforts has detected more than 500 violations.

Article is reprinted with the permission of Latvian Newspaper.