In the increasingly knowledge-driven economy, Intellectual Property (IP) is a key consideration in day-to-day business decisions. New products, brands and creative designs appear almost daily on the market and are the result of continuous human innovation and creativity.
According to an independent survey recently conducted in Pakistan, IPR ranks among one of the top bottlenecks in the way of economic stability of the country. Some other major problems include: corruption, kickbacks, smuggling, black economy, tax evasion, wrong decision-making as well as unbalanced prioritisation of the national economic policies. To improve IPRs situation in the country, the government is taking proactive measures in protecting IPRs because of the fact that the country is annually losing over Rs 10 billion in direct/indirect taxes due to counterfeiting and infringement in various sectors, particularly tobacco, consumer goods, lubricants and medicines.
Although, the international opinion about protection of the intellectual property rights in Pakistan has remained pessimistic in the past, considerable improvement in protecting intellectual property rights in Pakistan has been witnessed since the formation of intellectual property rights organisation in 2005. The measures like restructuring IPO with Prime Minister as its head shows the commitment of the government for image building of the country through enforcement of IPRs in Pakistan.
IPO Pakistan's campaign to enforce the IPRs laws with help of FIA has been seen as a great success, as a result of which FIA recovered 367,252 pirated DVDs and CDs, along with the manufacturing equipment, and arrested 56 people across the country. This has brought respect for Pakistan.
The global watchdogs like UK-based "The International Federation of Phonographic Industry" have recently certified that the export of pirate optical discs from Pakistan's international airports has completely dried up. Vice President of World Intellectual Property Rights Organisation Mr Jeffrey Yu has also noted the efforts of the Government of Pakistan for prioritising the IPR issues and regarded it as a step forward while emphasising that government has to do a lot in this respect.
The situation of IPRs globally is not so much encouraging. Violations of International Property Rights laws particularly piracy and counterfeiting have emerged as a major international problem, inflicting huge loss to the general public as well as to the national exchequers of countries affected by the menace. The evil practice hampers the economic development of societies by discouraging legitimate investments on the one hand and on the other depriving the affected nations of the much needed new job opportunities and income from duties and taxes.
In the third world countries, the illicit trade in pirated and counterfeit products aggravates the economic deprivation and ever-expanding poverty. The huge dimension of this illegal trade may be judged from the fact that in 2003, the World Economic Forum estimated the annual cost of piracy and counterfeiting at 450 billion Euros. In a meeting, in London, on October 4, 2005, CEOs of some of the world's top companies, from four countries, warned: "This illegal activity, estimated at $600 billion, is threatening the knowledge-based economy of the 21st century."
Against 10 percent some five decades ago, according to a global study, now over 50 percent products are affected by violation of intellectual property rights. In other words, there has been a 500 per cent increase in the incidence of IPR violations or sale of fake, substandard, pirated and counterfeit products, over the last 50 years, raising dramatically the need to protect the people and products from counterfeiting and associated challenges.
The citizens in the low and middle-income groups particularly in developing countries like Pakistan are the main target of counterfeiters and producers of fake brands. Often, common people buy substandard products because of the price difference. However, substandard fake items badly affect the health of consumers, more so in the case of counterfeit medicines, which are flooding the medical stores in rural areas where not more than 10 percent of the standard drugs can be found.
I as a representative of the business community in general and industrial community in particular believe that the violations of IPR are dangerous to the economic life of Pakistan and serious hurdle in attracting the foreign investment in country. According to a study, over 50 percent of the products available in the market are affected by some form of violation of intellectual property rights. Further, markets are flooded with number two versions of almost every product, including life saving medicines. Moreover, the unscrupulous elements indulging in the illicit practice of piracy and counterfeiting are "human parasites," who merely try to thrive on the hard labour and creative work of some God-gifted persons whom, in popular parlance, we call genius.
If we need to build image of the country, we have to guarantee that the IPR are respected, laws actively implemented and culprits are brought to justice. In this respect, not only the government but all stakeholders of the society particularly the private sector, NGOs and media have to play their role to clean the society from pirated and counterfeited products.
Small and medium-sized enterprises (SMEs) are often the driving force behind such innovations and in countries like Pakistan serve as backbone of the economy. Their innovative and creative capacity, however, is not always fully exploited as many SMEs are not aware of the intellectual property system or the protection it can provide for the inventions, brands, and designs. If left unprotected, a good invention or creation may be lost to larger competitors that are in a better position to commercialise the product or service at a more affordable price, leaving the original inventor or creator without any financial benefit or reward.
Adequate protection of a company's intellectual property is therefore, a crucial step in deterring potential infringement and in turning ideas into business assets with a real market value. Taking full advantage of the IP system enables companies to profit from their innovative capacity and creativity, which encourages and helps fund further innovation.
Role of IPRs in economic growth is crucial. Studies have shown that products carrying trade marks contribute to national economy manifold as compared with enterprises having no trade marks. Promotion of Trade Mark registration and brand development of products may give country's export quantum leap. Pakistan has great export potential in surgical equipments, sports goods, leather and leather garments, semi-engineering products, fuel oil filters, melamine, fan manufacturing, rice and such other products.
However, due to ignorance towards promotion of trade marks and branding of these products, the volume of exports of these products is below par with its potential. A Pakistan made surgical equipment, which is exported at only $5 in international market, can earn up to $100 for the country provided it is manufactured under a brand, acceptable to international standards. We need to accord priority in these areas if we desire to achieve quantum leap in exports.
Strong intellectual property regime is imperative for a competitive economy based on creation and transfer of technology, promotion of creativity and commercialisation of inventions. The importance of IPRs and there strict implementation, therefore, demands that there should be a countrywide drive to raise awareness on issues pertaining to intellectual property rights.
Seminars and conferences should be organised all over the country, particularly at the grass-roots level. According to an estimate, the foreign companies are losing around $1 billion per annum due to counterfeiting in Pakistan. The government losing around $1 billion per annum due to counterfeiting in Pakistan. The government losses in taxes are also quite formidable.
It is time, the private sector and the government join hands to eradicate this evil so that Pakistan becomes, in reality, an attractive place for business growth, with bright prospects for effective tapping of consumer market at regional and international level. The government needs to encourage those business houses, enterprises and industrial groups who despite all odds have kept the national flag high on international economic fronts through their products and services.
To me they are real heroes of the society and deserve recognition of the government. Creating Pakistan's soft image through brand development should be the national slogan for the year 2011-2012 and I call upon the government to introduce new policy reforms. (The writer is the Vice President of SAARC Chamber of Commerce & Industry)