Economic consequences of faking it

Operation Bernhard, the largest counterfeit currency scam hatched by Hitler’s Germany, to flood the UK market with fake currency and destabilise the UK economy, in the end proved to be unsuccessful.

The economic fallout for companies which fail to implement anti- counterfeit and anti – piracy plans can be severe. It means loss of revenue, potential brand value damage and increased public health and safety risks for consumers through use of non – compliant and potentially toxic material.

The financial impact is across scientific, technological, industrial, commercial and creative industries. Intellectual Property Rights protection is also a stimulus in job creation. It is moreover, with a doubt a boost for innovation.
Companies need to remember that operations against trademark counterfeiting and pirated copyright need support from a multi- skilled team comprising legally qualified personnel, business and product leads, forensic investigators and in- country law enforcement officials ranging from customs officials, police officers and border patrols.

Legally authorised search and seizure warrants and the impounding and storage of counterfeit goods coupled with in -country customs embargo against the importation of counterfeit goods and information exchanges between companies and enforcement officials are a necessary corollary to a successful operation. So are criminal prosecutions as well as online or physical in country detection operations.

There is increased activity in the sale of counterfeit goods online. Destruction of counterfeit and pirated products requires informed and trained personnel. Specially trained units are invaluable and it is worth your company’s Corporate Social Investment (CSI) budget to invest in awareness training of in- country enforcement authorities.

Education and awareness campaigns on counterfeit products, including clearly fake and poor quality and/ or falsely labelled manufactured goods can mitigate against counterfeit creation in that consumers become aware of inherent dangers poor electronic components as well potential effects of toxic chemicals and ingredients.

Advances in technologies inevitably help create less of a market for fake notes- enabling electronic transfers of monies eliminate cash exchanges and hence reliance on paper cash and with it the potential for counterfeit notes.
Some practical hints: get your companies anti – counterfeit/piracy operations in action and enhance your bottom line. Practical enforcement and sound knowledge of regulated in-country mechanisms and laws offers a way forward to effective enforcement.

Awareness of international treaties including the Patent Cooperation Treaty (PCT), the Paris Convention, Berne Convention, Rome Convention, Washington Convention and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) are important.

Collaboration is critical to a successful mitigation in counterfeit and piracy trade. In leveraging anti – counterfeit/ piracy initiatives, companies can do more for themselves, public health and safety and the economy. Subverting the economy was Operation Bernhard’s aim and is not and should not be today’s reality.

First published in Business Day, Business Law and Tax Review: 10 February 2014.