Case Study – Counterfeiting and Brand Infringement I NISSMAT I Brand Protection

What this session covered

This session took the form of a conversation between two speakers, both associated with private brand-protection agencies, with one acting as host while the other led the exposition of a case study on counterfeiting in the fast-moving consumer goods sector. The case concerned counterfeit versions of a well-known shampoo brand that were repeatedly flooding Indian markets. By way of background, the leading speaker set out the standard domestic enforcement cycle: market surveys to locate dealers in duplicate goods, undercover purchases of samples in the presence of a notary, a complaint to the police, raids and seizures, and prosecution in the courts. Both speakers observed that action against retailers and stockists is chiefly a deterrent, and that the more effective course is to trace and plug the source of the counterfeit supply.

The distinctive feature of this case was that raids within India, including on a manufacturing unit traced to Punjab, did not stop markets being restocked. Inputs from the brand's manufacturer pointed to the Nepal–Bihar border, and the investigating team travelled to Kathmandu. Inquiries there revealed a smuggling route in which counterfeit goods made in China were loaded onto trucks returning empty after carrying sand towards the Chinese border for road-building, stored in Kathmandu by cosmetics traders, moved by road to the Nepal–India border, and then carried across in baskets by large numbers of women whom a small customs post, with no women officers to conduct checks, could not realistically search. The goods were held in markets on the Bihar side of the border for onward sale into India. An exchange between the speakers clarified a distinction: genuine, cheaper Chinese-made goods are smuggled into India as a separate phenomenon, whereas the products in this case were counterfeit.

The discussion then turned to the response: representations to customs authorities that led to women customs officials being posted at the border, raids conducted with the Bihar police on storage points in the border markets, and the brand owner's engagement with the Chinese authorities, which was said to have led to raids in China. The lessons drawn were to extend investigation beyond the local market to the point of origin, and to expect considerable friction in cross-border enforcement, since Indian statutes do not apply in Nepal and equivalent local provisions must be invoked. One speaker also pointed to staffing gaps in border enforcement agencies, while the other noted that counterfeiting afflicts brands precisely because they are popular. Closing the session, one speaker said the group had conducted in excess of about 2,000 raids across various infringed products.

Key points raised

• Standard brand-protection enforcement in India was described as a cycle of market survey, notarised sample purchase, police complaint, raid, seizure and prosecution, which deters dealers but does not remove the source of supply.
• The case traced counterfeit shampoo flooding Indian markets to a route running from China through Kathmandu to the Nepal–Bihar border, after raids within India failed to stop restocking.
• Goods crossed the porous border in baskets carried by large numbers of women, exploiting a small customs post that lacked women officers to conduct checks.
• The response combined the posting of women customs officials at the border, raids with the Bihar police on border-market storage, and the brand owner's engagement with the Chinese authorities.
• The speakers distinguished this case from the separate smuggling of genuine, cheaper Chinese-made goods: the products here were counterfeit.
• Lessons drawn included extending investigation beyond the local market to the point of origin, and anticipating the difficulty of securing enforcement cooperation across borders.