Thursday, January 24, 2013

Corruption and IPR enforcement

IIPR authorities are often in a unique position to capitalise on inside enforcement information.
The Bangkok Post ran an incisive article in mid January explaining how counterfeit goods vendors pay police up to 400,000 Baht  (USD13,500) to receive tip offs that raids are about to occur. One Nana trader described how a man came to tell her that the Department of Special Investigation would be conducting a raid, that she should temporarily close down and move all of her counterfeit goods back home for two days.
Bangkok's counterfeits in areas like Nana, Khao San and Patpong are popular especially with tourists. The prevalence of the fakes does ebb and flow depending on government enforcement initiatives operating at any one time. A large number of traders make their money through buying trips to China, importing the fakes and selling them at street stands. By all accounts it is a good living.

But vendors report that times are getting harder with rising demands for bribes. the interviewed trader reported that frequent police rotation leads to new negotiations each time. Getting caught might mean an arrest and losing some stock, but not all cases go to court and many traders have survived decades without a conviction.

Bribery costs didn't used to harm profits. The shippers and manufacturers in China are generous with credit, and pay bribes to facilitate shipments to Thailand. As a result Thai Customs hasn't been a problem she said.

The police response to the report was that it could be mafia demanding payments rather than police, or individuals posing as police officers.

This is not to single out Thailand. Such situations happen in the Philippines, where corrupt enforcement officials/police have been known to watch the court lists for search warrant applications. They then rush to the address listed to forewarn the target in exchange for a sizable payment (raids take place several hours or often next day after a court search warrant is granted).

In Indonesia, the general consensus among IP holders is that the police are almost completely unusable because they demand upfront payments to investigate commercial crimes like IPR violation.

What all this shows is that certain macro issues such as corruption need to be addressed as part of IPR reform.

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