What is Counterfeiting?
Counterfeiting is the act of infringing upon the intellectual property rights of an individual or a company. In other words, counterfeiting is the act of intellectual property theft, involving the exploitation of a party’s IP without consent while using, manufacturing or selling goods or services. Counterfeiting is legally recognised as a crime in Malaysia and internationally.
What type of goods or services can be Counterfeited?
While most people would associate counterfeit goods with luxury items, the reality of counterfeiting goes deeper than imitation Louis Vuitton handbags sold online for cheap. The counterfeit market grows larger year after year, and crucially, more and more professional. Most products can be reproduced as an imitation, to the extent of pharmaceuticals and household products. Furthermore, imitation items are so quickly and well produced consumers may begin to favor counterfeits over the originals.
Counterfeiting and the Economy
Counterfeits are a persistent blemish on the nation’s economy. In 2019, Malaysian authorities discovered and removed RM450,000 worth of imitation goods which included perishable goods. More than RM1mil worth of counterfeit items were seized from a shopping mall in Kuala Lumpur just four months ago. It is reported the Domestic Trade Ministry has seized fake goods worth as much as RM94.7mil since 2019.
Types of Intellectual Property Theft
Intellectual property owners are best equipped to protect their assets when there is a strong awareness of IP theft and its types depending on the area of IP.
- Piracy. Piracy is defined as the unlicensed duplication of content protected by copyright law. Piracy profits off the work of creatives, such as musicians, producers, developers and authors by selling unofficial copies at a lower price to the general public.
- Patent Infringement. Patent infringement is an exploitation of an invention by making, using or selling a product that contains one or all elements of a patented process, under the circumstances that the patent is unlicensed to the user and simultaneously protected by patent law.
- Misappropriation. Misappropriation, or trade secret infringement, is understood as unauthorized disclosure or usage of a trade secret regardless of intention, be it on purpose or via negligence.
Enforcing Intellectual Property Rights
Establishing a basic level of respect towards intellectual property and its owners is the starting point of combating counterfeiting. IP owners should be rewarded for creative and innovative ventures, and that includes protected IP rights and proper compensation.
If you are an IP owner who suspects an infringement on your rights, you may first consult an IP professional to determine the estimated cost of IP enforcement as it can be costly. You may also probe for further investigation into your particular case of infringement. This is to prepare for the next step in taking action against the perpetrator, which includes the following options:
- Licensing agreement negotiation. Intellectual property can be licensed, meaning the licensee is able to legally utilize the IP in question under the approval of the licensor. Two parties may come together to negotiate a favorable licensing agreement which generates a profitable outcome for licensor and licensee.
- Mediation. When two parties are in disagreement, they are at liberty to proceed to mediation, whereby a third neutral party acts as the mediator to help conclude the discussion.
- Arbitration. When two parties are unable to come to an agreed decision, they may move on to arbitration, whereby a third neutral party may resolve the issue via imposing a resolution to the discussion.
- Litigation. The final choice for IP enforcement is litigation, whereby both parties are unable to agree on a resolution and have decided to take legal action against one another. The outcome of the case is to be made in court. Litigations are mostly expensive and time consuming, therefore it is strongly advised for IP owners to seriously consider negotiation, mediation and arbitration before moving on to litigation.
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