Wednesday, June 18, 2014

Counterfeiting in Indonesia

A rare IP raid

The Jakarta Globe newspaper reported last week on Indonesia’s reputation for fake goods. They cited 2 interesting examples in recent months. The first was a military general who admitted buying fake watches. He threw his purportedly $100,000 limited-edition watch on the ground in public to bolster a claim that it was a cheap fake (to avert suspicion that it was real - leading to a more damaging investigation!) Another incident cited was an Indonesian-born wine dealer in the US  convicted of selling fake wines after his vintage wine business failed.
None of this is new; Jakarta’s markets have always sold every kind of fake goods, in recent years made easier by the ASEAN China free trade agreement. While some items like personal care, foods and apparel are locally made, any complex fake product is imported from China (and often smuggled too!) The lack of a Customs IP border protection system makes importing fakes easy.
The police say they are cracking down on counterfeiting. However police demands for money to solve commercial crimes mean no-one files IP complaints with the police anymore. The newspaper reported that retailers don’t take such crackdowns seriously -  the Indonesia Shopping Center Association very was skeptical of claimed police action.

The IPO’s tiny IP investigation team is far too small to make an impact, the newspaper reports – which is also consistent with IP industry views. At present they have no facilities to store fake goods so have stopped making seizures altogether. And the 3 months time lag for complaints makes it the slowest IP raid system in the world! 

With Indonesia still on the USTR’s Priority Watch List criminal IP violation remains a serious problem, a symptom of the wider failure of law enforcement in the country.  Both of the presidential candidates aim to improve corruption and law enforcement, they said in the first presidential candidate debates. Perhaps new leadership may change the IP situation. Roll on October when the new government and president takes office.

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