20000411

Rising

IPRs, abuse

irks MNCs

RECORDER REPORT

KARACHI: Alarming increase in the abuse of Intellectual Property Rights (IPRs) and Counterfeit is causing restlessness among the multi-nationl companies operating in Pakistan.

Philippe A. Bovay, President, The American Business Council of Pakistan (ABC) has sent a letter to Finance Minister, Shaukat Aziz suggesting steps to protect IPRs. Talking to the Business Recorder on Monday, Bovay welcomed the Finance Minister's "continued personal interest in helping eliminate this problem." He was all praise for the grit and determination displayed by him (Shaukat Aziz) in attending to the issues and putting in extra efforts to get the same resolved.

According to some estimates the magnitude of the problem could be judged from the fact that the government is losing Rs. nine billion annually or Rs. 25 million per day because counterfeiters do not pay GST, excise duty, income tax, or any other income which is due to the government.

Nothing is safe. "From powdered milk to lubricants all are under attack from the unscrupulous elements who are playing with the health and resources of the nation."

In order to rapidly move to effective implementation, and as presented in the meetings, the ABC president had with Shaukat Aziz, ABC has recommended following measures:

The Chief Executive set up an IPR task force whose sole purpose should be to eliminate IPR infringement in Pakistan. Having a specific task force set up for this purpose will ensure 100 percent focus and efforts, without any distractions. "It is a complicated task which requires focused attention," Bovay said.

ABC has proposed three goals for the task rorce (i) Get effective ordinance promulgated through various ministries involved. Depending on the type of IPR issue (eg trade mark, patents, copyright, publishing, software), the various ministries involved are health, education, industry, commerce, culture, law and interior. One task force not belonging to any ministry and with the single minded goal of IPR enforcement might be best placed to coordinate all the various ministries. (ii) Work with the Ministry of Interior to set up an enforcement programme in the country. Coordination and supervision handled at the federal level has benefits. Handling only at the provincial level could result in uneven application and enforcement of the new laws, and will require four times the meetings-explanations-securing support-monitoring, etc., and (iii) Set up special IPR courts to dispense speedy justice. Speedy trials with guilty parties quickly put behind bars will be the best deterrent to continued IPR infringement.

ABC has recommended that the Chief Executive head the task force assisted by some senior persons with direct access to the Chief Executive. This will help ensure action from all ministries. It will also send the "no-nonsense" signal to all concerned, including the outside world and the WTO/IMF for whom IPR protection is also a major priority.

Further the Chief Executive give the task force leader the same "fix in 30 days" priority as is being rightly done with the IPPs issue. Every day the common man is being cheated and even physically harmed by counterfeit products.

To ensure the best possible programmes meeting the needs of government and private industry, ABC has recommended that the Task Force interface closely with private industry.

Bovay said that besides loss of revenue to the government, the loss to the country is even larger because the counterfeits hurt the investment climate. Investors choose to invest their money in countries which have effective laws against counterfeiters. This means that investments that could be made to create jobs and industry in Pakistan are made in other countries.

The Rs. nine billion in lot revenue is based on industry estimates. Trademarks alone account for Rs. three billion losses. For example key companies in car lubricant industry estimate annual government losses from trademark abuse at approximately Rs. 800 million.

Another Rs. 800 million for carbonated soft drinks. Leaders in the cigarette industry estimate Rs. 500 million in government losses. Medicines Rs. 150 million, shampoos Rs. 100 million, soaps Rs. 100 million, tea Rs. 100 million and millions more from paints, bluing agents, cooking oils and so forth. Adding losses from copyright and patent abuse contributes another Rs. six billion in losses, he added.