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Anti-Counterfeiting Laws in India

March 15, 2023 | Corporate & Commercial Law

Counterfeiting is an unethical & illegal practice. Trademark owners have the right to take action against trademark or copyright infringement they come across.

Counterfeiting is a common problem across the globe, with people creating copies of things from branded products and jewelry to currency notes. Considering it became a USD 3 trillion industry in 2022, eliminating counterfeiting completely from the world is quite a tedious task. Not only has the ecommerce giant Amazon been found to contain counterfeits, but several countries around the world are facing massive problems due to counterfeit currency notes as well.

Definition


As per the Cambridge Dictionary, a counterfeit is made to look like the original of something, usually for dishonest or illegal purposes.

Counterfeiting, in the Black’s Law Dictionary, is defined as an act of producing or selling an item that looks like a reproduction of a trademark in order to deceive a consumer into thinking that they are buying the original trademark goods.

According to Section 28 of the Indian Penal Code (IPC) 1860 – a person is said to ‘counterfeit’ who causes one thing to resemble another thing, intending by means of that resemblance to practice deception, or knowing it to be likely that deception will thereby be practiced.

Note: As per the explanation, it is not important that in case of counterfeiting the imitation should be the exact.

If you take the definition of counterfeiting into account, anti-counterfeiting may be referred to as steps taken to prevent the counterfeiting of any goods/things.

Anti-Counterfeiting Laws in India


Trademarks Act, 1999


  • Although the term ‘counterfeit’ has not been defined under the Trademarks Act, the Act basically aims to provide remedies against trademark infringement. Trademarks provide valid protection for a period of 10 years.
  • The provisions in the Act contain both civil and criminal consequences for trademark infringement, passing off or falsifying a trademark.
  • Section 134 of the Act includes civil reliefs as per which in any suit for trademark infringement or of passing off, the court may grant injunction, damages, account of profits together with or without any order for delivery-up of the infringing labels and marks for destruction or erasure.
  • Provisions for falsifying trademarks and falsely applying trademarks are mentioned in Section 102 of the Act. It can be considered similar to counterfeiting a trademark.
  • According to Section 102, an individual is considered to falsify a trademark if they, without the trademark owner’s approval, make that trademark or a similar misleading mark or if they alter any actual trademark by the means of alteration, addition, etc.
  • The punishment for falsifying or falsely applying a trademark on any goods or services, as stated in Section 103, is imprisonment for a term that shall not be less than 6 months but may extend to 3 years and a fine that may not be less than INR 50,000 but not exceed INR 2 lakhs.
  • Furthermore, Section 105 includes provisions for an enhanced penalty on second or subsequent conviction with imprisonment not less 1 year but which may extend up to 3 years and a fine that shall not be less than INR 1 lakh but not exceed INR 2 lakh.

 


Copyright Act, 1957


  • Legal protection and enforcement of copyrights in India are stated in the Copyright Act.
  • As per Section 13 subsection 1 of the Act, copyright shall subsist in original literary, dramatic, musical and artistic works, cinematograph films, and sound recordings.
  • Section 22 defines the validity of a copyright, which is for 60 years in published literary, dramatic, musical, and artistic work.
  • As per Section 26, the validity of copyrights for cinematograph films is for 60 years.
  • As per Section 27, the validity of copyrights for sound recording is for 60 years.
  • The Act states civil and criminal remedies against copyright infringements.
  • Civil remedies such as injunction, damages and accounts for copyright infringements are stated in Section 55 of the Act.
  • Section 63 of the Act states that any individual who infringes or abets the copyright infringement in a work shall be punishable with imprisonment that is not less than 6 months but extend up to 3 years and a fine not less than INR 50,000 but not more than INR 2 lakhs.
  • Section 63A of the Act also states provisions for enhanced penalty on second and subsequent convictions.
  • As per Section 63B, punishment on using an infringing copy of a computer program on a computer is punishable with imprisonment not less than 7 days but may extend to 3 years and a fine as well.

 


Designs Act, 2000


  • The Designs Act aims to consolidate and amend the laws related to designs protection in India.
  • As per Section 4, the Act prohibits registration of designs which:
  • are not new or original.
  • have been disclosed anywhere in India or in any other country to the public in publication in tangible form.
  • cannot be significantly differentiated from known designs.
  • comprise of scandalous or obscene matter.
  • If a design is registered, as per Section 11 of the Act, the registered proprietor of the design has a copyright for 10 years from the date of registration of the design.
  • Provisions for piracy of registered designs is stated in the Section 22 of the Act. It must be noted that only civil remedies are provided in the Act.
  • If any individual during the existence of the copyright, without the consent of the copyright owner, uses the design to apply it to any article, they shall be liable to pay a sum not exceeding INR 25,000 to the copyright owner as a contract debt. In addition, the proprietor can bring in a suit for recovery of damages and injunction.

 


Geographical Indications of Goods (Registration and Protection) Act, 1999


  • This Act aims to provide better protection of geographical indications relating to goods.
  • Geographical Indication in relation to goods means an indication that identifies goods, be it agricultural, natural or manufactured, as originating or manufactured in a specific region or a locality where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin.
  • As per Section 11, geographical indication cannot be registered by an individual but by any association of persons or producers, or any organization or authority representing the interest of the producers of such concerned goods.
  • Section 22 of the Act includes provisions for infringement of a registered geographical indication when it is used to mislead the persons as to the geographical origin of a good.
  • When an individual, without the approval of the authorized user of the geographical indication, make that geographical indication or falsify any genuine geographical indication, they shall face consequences as per Section 38 of the Act.
  • Penalties such as imprisonment term and fine for falsifying or falsely applying geographical indication are stated under Section 39.
  • Civil remedies for infringement of a geographical indication are mentioned under Section 66, wherein a suit can be filed for injunction, damages and account of profits.

 


Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007


  • Framed under the Customs Act, 1962, these rules aim to strengthen the executive guideline set for the protection of intellectual property rights at the borders.
  • As per the Rules, ‘goods infringing intellectual property rights’ is defined as any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder.
  • The Deputy Commissioner of Customs (DCC) or Assistant Commissioner of Customs (ACC) are empowered by these laws to suspend the clearance of any goods that they believe are suspected to be goods infringing intellectual property rights.
  • Depending upon situations, the Rules empower the DCC or the ACC to destroy any goods that are infringing intellectual property rights.


The Drugs and Cosmetics Act, 1940


  • The Drugs and Cosmetics Act aims to regulate the import, manufacture, distribution, and sale of drugs and cosmetics.
  • Spurious drugs and cosmetics are defined under Section 9B and 9D of the Act.
  • Under Section 10 of the Act, import of any spurious drug or cosmetics is prohibited. It is punishable under Section 13 with imprisonment for 3 years and a fine that may extend up to INR 5000.
  • Drugs or cosmetics may be deemed to be spurious if inter alia:
  • It is imported under name of another drug/cosmetic.
  • It is an imitation of another drug/cosmetic or resembles another drug/cosmetic that is likely to deceive.
  • It implies to be a product of a manufacturer while it is not actually their product.
  • Provisions for confiscating consignment of drugs or cosmetics is defined under Section 14 of the Act.
  • Manufacturing and sale of spurious drugs is prohibited and punishable with imprisonment and fine under Section 18 of the Act.

 

Indian Penal Code (IPC), 1860


  • Provisions for criminal consequences for counterfeiting coins, government stamps, seals, property marks, currency notes, and bank notes are stated in the IPC.
  • Chapter XII, IPC concerns offences, including counterfeiting, related to coins and stamps. In case of coins, not only is making counterfeit coins a punishable offence but making or selling any equipment used for making counterfeit coins is considered a crime too. In addition, delivering or holding counterfeit coins is deemed punishable as well. Using fraudulent or dishonest means to change the weight or composition of coins is considered a punishable offense. Furthermore, counterfeiting government stamps has the same consequences.
  • Chapter XVIII of the IPC provides for offences related to documents and property marks, wherein Sections 489A to 489E deals with counterfeiting of currency notes and bank notes.
  • Counterfeiting of currency notes and bank notes is punishable with imprisonment for life or with imprisonment that can extend up to 10 years and a fine.
  • Furthermore, even if an individual is found in possession of counterfeit currency or bank notes, they shall be punishable with imprisonment up to 7 years, under certain circumstances.

 

What to do if Counterfeiting is Detected?


Registered owners of trademarks and copyrights should be vigilant and regularly skim the markets to check if the new products that enter the market are anyhow infringing their trademark/copyright. If they spot any cases of counterfeiting, they may take adequate legal action, be it civil or criminal, as stated in the Acts mentioned above.

For example, if a proprietor of a registered trademark comes across a product which infringes his intellectual property rights, whether by passing off or by falsifying or falsely applying the trademark, then the proprietor of the registered trademark can file a civil suit seeking injunction, damages or rendition of accounts, as the case may be.

Furthermore, under cases where the registered trademark is falsely applied to goods by the infringer, then the proprietor can also initiate criminal proceedings as provided under section 102 and 103 of the Trademark Act by filing a police complaint. Under Section 115(3), these offences have been made cognizable which means that no warrant is required.

Further Section 115(4) of the Act gives the power of search and seizure to any police officer not below the rank of Deputy Superintendent of Police or his equivalent. The goods so seized are required to be produced before a Court of Judicial Magistrate of First Class (JMFC) or Metropolitan Magistrate (MM) as soon as possible.

Conclusion


Counterfeiting can cause massive losses for businesses that have trademarked their products. From drop in sales and profits to compromising safety and even the potential well-being of buyers, inapt counterfeit products can significantly harm a trademark owner/business. Although it cannot be completely eliminated from the market, trademark owners have the right to take action as per the various Acts mentioned above against any cases of trademark/copyright infringement they come across.

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