They say imitation is the sincerest form of flattery. But while the quantity of counterfeit consumer goods today is greater than ever before, manufacturers of the real stuff – from handbags to electronics – aren’t blushing. That is because knockoffs are seeing a boom in quality, too, leaving firms’ in-house intellectual property (IP) lawyers erubescent with rage.
For example, fake branded sneakers, the fastest growing segment of the counterfeit goods market, are becoming so similar to their legitimate, often limited-edition counterparts that online marketplaces like eBay and Amazon have employed huge teams of “authenticators” charged with eyeballing, touching and even smelling shoes to gauge their authenticity before they are delivered to the end customer. Counterfeiters are even copying retailers’ barcoded authentication tags.
Some market analysts argue that while counterfeiting is obviously morally wrong, big brands needn’t worry. After all, most consumers of knockoff products were unlikely to have wanted, or been able, to spend enough money to buy the real thing anyway. Knockoffs, moreover, provide free advertising for brand names in a competitive market, and a rise in their popularity usually indicates a rise in demand for the authentic version.
Whatever the impact counterfeiting has on corporate profits, the far bigger concern, at least for law enforcement officials, is that the trade in fake goods is plugged into a much larger industry of illicit activities. This week, Maj Gen Dr Abdul Quddus Al Obaidly, the head of the Emirates Intellectual Property Association, a part of Dubai Police, told attendees of the Middle East North Africa IP Crime Conference in Dubai that “crimes related to intellectual property are becoming more dangerous than drug-related crimes”. Indeed, much of the trade in fake goods remains in the hands of organised crime gangs.
Even in the UAE, among the toughest enforcers in the Middle East when it comes to IP law, stamping out the problem is a daunting task. Last year alone, Dubai Customs encountered 15 million counterfeit items with a total value of around $20 million.
Technological change has only made things more challenging for police. E-commerce, in particular, has changed the way fake goods are moved. While shipping containers full of knockoff handbags still arrive frequently at major ports, more often these days individual items are shipped directly from the seller, often using untraceable accounts on digital marketplaces.
The Gulf is far ahead of the rest of the Mena region when it comes to tackling most IP crime. The UAE, which has the most sophisticated IP protection regime in the GCC, has introduced a string of measures in recent years to bring the country’s laws in line with international best practices. Earlier this month, the Ministry of Economy introduced a wide-ranging programme to strengthen the country’s “IP ecosystem” even further. Other GCC states are also engaged in efforts to refine their own legal frameworks.
But large swathes of the Middle East remain an intellectual property Wild West, where chronic war or instability have left few countries equipped to take the issue seriously, even as the demand for knockoffs is rising.
The region is well-connected to the internet and has a growing population of young people with increasingly globalised tastes. In other words, they are often keen to get their hands on swanky sneakers or flashy wristwatches. While counterfeits may provide them with what appears to be a cheap solution, however, for society as a whole they are very costly indeed.
