Western Information – Knowledgeable perception: Canada wants a strategic plan to fight counterfeit items

Counterfeiting is a continual drawback confronted by Canadian customers. In keeping with Canadian producers and exporters, counterfeiting — or the sale of merchandise that purport to be one thing they don’t seem to be — prices Canada between $20 billion and $30 billion yearly.

Canada is just not the one nation battling counterfeiting — the follow is prevalent in lots of different nations and throughout totally different industries. A 2017 World Well being Group research discovered that round 10 per cent of medicines offered in creating nations could also be deceptively counterfeit.

Equally, the U.S. Authorities Accountability Workplace discovered that 20 of 47 objects bought from third-party sellers resembling Amazon, eBay and Sears Market have been counterfeits. Examples included counterfeit variations of 3M N95 masks on Amazon.

Given the size of this ongoing problem, Canadian governments and industries should come collectively to design new methods that may defend Canadians whereas sustaining the nation’s aggressive benefit within the world market.

Contributing elements

A number of numerous elements contribute to the persistence of counterfeit items in Canada. The primary pertains to shopper behaviour, as some consumers might deliberately purchase (or fail to keep away from) counterfeit items out of shrewdness or financial necessity.

Second, by way of product high quality, fakes will be similar to the actual factor. For instance, the Canadian Mental Property Council reported {that a} counterfeit model of a selected Procter & Gamble shampoo was so near the unique even the corporate’s personal gross sales drive couldn’t inform the distinction.

Third, Canadian legal guidelines on counterfeit items are notoriously lax, hindering efficient enforcement. In truth, the Workplace of the USA Commerce Consultant has positioned Canada on its watchlist of nations providing the weakest mental property (IP) protections.

A fourth issue stems from outsourcing manufacturing to abroad suppliers. This results in a type of counterfeiting known as the “third shift.” After a enterprise outsources manufacturing, the provider makes use of the enterprise’ IP rights to provide counterfeit merchandise in the identical manufacturing facility the unique product is made.

Canadian residence product producer Umbra has been affected by quite a few suppliers utilizing a 3rd shift to breed its merchandise.

Lastly, though some prospects might depend on evaluation techniques to evaluate the authenticity of things they purchase on-line, these techniques are removed from dependable. Counterfeit sellers have discovered methods to control the evaluation system — by buying fraudulent five-star opinions, for instance.

In mild of those difficulties, Canada wants a fastidiously thought-out method to mitigate counterfeiting.

Combating counterfeits

As a result of the supply of counterfeit merchandise is commonly the identical manufacturing facility that produces the unique product, one treatment is to offer provider factories with restricted portions of uncooked supplies. Hewlett-Packard does this by offering its suppliers with a sure variety of printheads which are used to fabricate ink cartridges for the corporate.

One other resolution is to allocate elements to totally different suppliers in order that nobody provider has all of the elements wanted to construct a selected product.

On the similar time, many rising market governments are stepping up enforcement efforts to strengthen IP protections. In 2020, China’s State Administration for Market Regulation launched an IP enforcement plan known as Iron Fist to higher defend the IP rights of varied producers.

Equally, India’s IP technique is to “put higher emphasis on trademark enforcement.”

The Philippine authorities’s current IP laws goals to “guarantee environment friendly and expeditious adjudication of IP instances” and make “IP litigation less expensive and sooner.”

For these governments, addressing IP safety is crucial to making sure producers proceed to really feel snug outsourcing operations to their nations. As such, Canada ought to prioritize and incentivize outsourcing to nations that embrace IP protections.

Utilizing know-how

Companies may also use applied sciences, resembling radio-frequency identification or holograms, on their merchandise to assist prospects determine counterfeits.

Just lately, blockchain know-how has been thought of as a promising resolution to counterfeiting. A number of blockchain-based purposes have been launched with the goal of tagging merchandise with distinctive identifiers that may’t be duplicated.

Blockchain resolution supplier BlockPharma helps sufferers examine the authenticity of their medicines, whereas luxurious items large LVMH Group has partnered with blockchain agency ConsenSys and Microsoft to authenticate merchandise.

This tech-focused technique aligns with the truth that governments around the globe are more and more encouraging blockchain adoption. The U.Ok. authorities, via Innovate UK, has pledged the equal of C$24 million to fund blockchain firms and the European Union Mental Property Workplace makes use of blockchain for anti-counterfeit.

A joint method is essential

The numerous elements that improve Canada’s danger regarding counterfeits, together with weak legal guidelines and IP protections, make this a difficult coverage problem.

Nonetheless, anti-counterfeit methods and the arrival of recent applied sciences like blockchain current alternatives for Canadian policymakers and business leaders to develop an efficient plan to fight counterfeiting.

Collectively, Canada’s enterprise and political leaders can construct shopper belief whereas additional constructing Canada’s world benefit.

This text is republished from The Dialog beneath a Inventive Commons license. Learn the unique article.

*** Knowledgeable Perception displays the angle and scholarly curiosity of Western college members and isn’t an articulation of official college coverage on points being addressed.