Counterfeiting and the harm caused to the consumer

By Mariana Benfati and Fernando Casares Teixeira

Counterfeit products can present defects that cause risks to the health and safety of consumers because they are poor quality and outside the technical standards established by regulatory agencies.

It is nothing new that counterfeiting causes harm to the owners of intellectual property rights and to the public coffers. However, the financial impact becomes the least of problems when we think of the health of consumers who buy counterfeit goods.

Copyright or trademark registration infringements are commonly viewed as harmless to society and culturally accepted under the pretext of providing work. How many times have we read popular criticisms of the police in newspaper articles about seizures of counterfeit goods?

The term “counterfeit goods”, at first, reminds the reader of clothes and bags bearing luxury brands, widely marketed by street vendors and being supposedly harmless to the health of those who purchase them. In fact, the illegal counterfeit market affects various industry sectors. From medicines to automotive parts. From alcoholic beverages to hair products. From cigarettes to agricultural pesticides. There are countless industry sectors that suffer counterfeiting. The greatest danger, in fact, is the potential injury from this merchandise to consumers, who are often unaware of the fake origin of the goods or the risk of opting for the lowest price.

Counterfeit alcoholic beverages, for example, may contain substances such as iodine, ethyl alcohol and methanol, manufactured without any quality standard or hygiene criteria and stored in inappropriate places. A study conducted by CEBRID – the Brazilian Centre for Information on Psychotropic Drugs, at Unifesp, in 2012 [1], indicated the presence of high doses of methanol in counterfeit drinks collected from informal vendors. Excess methanol can lead to blindness and, in extreme cases, even death.

The automotive market estimates a loss of around USD 3 billion [2] each year from counterfeit or remanufactured parts in Brazil. And consumers, often attracted by low prices, cannot imagine the potentially harmful effect that this type of product can have. In addition to putting the lives of drivers and passengers at risk, as they do not pass the strict quality control of Inmetro [National Institute of Metrology Standardization and Industrial Quality], they can cause irreversible damage to a vehicle.

With respect to sunglasses, a survey by the Brazilian Optical Industry Association indicates that, of the 24 million pairs of sunglasses produced every year in the country, 7 million are illegal [3]. The hazards for the health of the eyes are enormous, since these products normally do not have lenses that stop ultraviolet rays.

It is not uncommon to see news in the media about consumers having been deceived in their good faith and harmed upon buying counterfeit goods. They are trainers that deform feet due to their poor quality and lack of technological application. They are toys that lose small parts, lighters that explode.

With the significant increase in websites and online marketplaces, the fight against this practice also faces challenges and requires constant innovation to be effective. New international and national data protection laws have made it even more difficult to discover the identity of infringers who register domain names hosted overseas or that use online marketplaces to distribute counterfeit goods. In parallel, commercial transactions carried out via e-commerce are fast and efficient, which also facilitates counterfeiters’ operations and helps them avoid being held responsible.

The Consumer Defense Code (Law 8078/90) has the function of protecting consumers, who are deemed to be at a disadvantage in contractual relationships. In Article 6, the law sets out the following as consumer rights: protection of life, health and safety against risks caused by practices in the supply of goods and services; and education and information on the appropriate consumption of goods and services, ensuring freedom of choice and equality in entering into contracts.

The law establishes that suppliers of counterfeit goods are jointly and severally liable for defects that render them unfit or inappropriate for their intended use or diminish their value.

In fact, the manufacture or marketing of counterfeit goods may configure different crimes under federal laws, such as: the Consumer Defense Code, the Brazilian Criminal Code, the Industrial Property Law and Law No. 8137. Penalties for these practices can vary from 3 months’ detention to 15 years’ imprisonment.

In addition to affecting trademark holders who start to have serious harm from losing market to counterfeiters and immeasurable losses as a result of depreciation of the brand’s image, the counterfeiting of goods harms society itself and the State as it no longer raises millions in taxes and brings about job losses.

Therefore, because they are poor quality and outside the technical standards established by regulatory agencies, counterfeit goods can present defects that cause risks to consumers’ health and safety. These consumers should also be aware that, in practice, purchasing from counterfeiters does not come with the guarantees established in the Consumer Code if the goods contain defects and possible reimbursement.

 

[1] https://noticias.uol.com.br/saude/ultimas-noticias/redacao/2012/10/30/bebidas-clandestinas-tem-metanol-cobre-e-susbtancia-cancerigena-diz-estudo-da-unifesp.htm?cmpid=copiaecola

[2] https://autopapo.com.br/noticia/autopecas-falsificadas-risco/

[3] https://saude.abril.com.br/bem-estar/fique-alerta-aos-perigos-dos-oculos-escuros-falsificados-para-os-olhos/

 

 

BIBLIOGRAPHIC REFERECES

Doctrine:

PIMENTA, Eduardo Salles – Coordenator. Estudos de Combate Pirataria em Homenagem ao Des. Luiz Fernando Gama Pellegrini [Studies on Combating Piracy in Honor of Justice Luiz Fernando Gama Pellegrini]. 1st edition. São Paulo: Letras Jurídicas. 2011.

SILVA, Alberto Luiz Camelier da. Concorrência Desleal. Atos de Confusão [Unfair Competition. Acts to Confuse]. 1st edition. São Paulo: Saraiva. 2013.

Articles:

FERRARI, Eduardo Reale. Reflexos da Pirataria [Reflections on Piracy]. ABPI Journal edition 134. Jan/Feb 2015.

Pirataria no Brasil – Radiografia do Consumo [Piracy in Brazil – X-ray of the Consumer] – based on the study “O consumo de produtos piratas no Brasil [The consumption of pirated products in Brazil]”, Federation of Commerce in the State of Rio de Janeiro – Fecomércio/RJ, 2007, 2nd updated Edition of the study, 2006;

Estudo sobre Contrafação [Study on Counterfeiting]’, carried out by technicians from ‘COMEÇO – Consultores em Organização e Gestão Empresarial [Consultants in Business Organization and Management]’, which included members with training in the areas of Law, Management and Economy, for the “União de Associação do Comércio e Serviços de Lisboa [Lisbon Union of Commerce and Services Association] – UACS, 2001”.

LUCENA, George Mendonça. Diretório Nacional de Combate à Falsificação de Marcas [National Directory on Combating Trademark Counterfeiting]. Available at http://www.daniel.adv.br/port/circularLetters/Carta_Circular_n75_port.pdf.

BRITO, Agnaldo. Caça a Pirataria Bate Recorde no Ano [Piracy hunting beats record in the year]. Available at <http://www.economia.estadao.com.br/noticia/geral,caca-a-pirataria-bate-recorde-no-ano,58429>.

Websites:

O Globo Newspaper 23/03/2004 & IFPI (www.ifpi.com)

http://jornalnacional.globo.com/Jornalismo/JN/0,,AA1442610-3586-631511,00.html

http://diblasi.com.br/artigo/medidas-de-combate-a-pirataria-no-brasil/

http://jus.com.br/artigos/19100/o-direito-e-o-combate-ao-comercio-pirata

http://jus.com.br/artigos/17818/a-importancia-da-vitima-no-processo-penal-da-pirataria

http://180graus.com/noticias/delegacia-atua-contra-a-pirataria-10507.html

http://ftp.stj.jus.br/portal_stj/publicacao/engine.wsp?tmp.area=398&tmp.texto=100923

http://www.emerj.rj.gov.br/serieaperfeicoamentodemagistrados/paginas/series/3/Combate_a_Pirataria_e_Agressao_266.pdf

Legislation:

Constitution of the Federative Republic of Brazil. Available at: <http://www.planalto.gov.br/ccivil_03/Constituicao/Constituiçao.htm>. Accessed on: 7 September, 2015.

LAW No. 8,078, OF 11 SEPTEMBER, 1990. Consumer Defense Code. Available at: <http://www.planalto.gov.br/ccivil_03/LEIS/L8078.htm>. Accessed on: 7 September, 2015.

LAW 9,279/1996 (ORDINARY LAW) 14/05/1996, REGULATES RIGHTS AND OBLIGATIONS RELATING TO INDUSTRIAL PROPERTY. Available at: <https://www.planalto.gov.br/ccivil_03/leis/l9279.htm>. Accessed on: 7 September, 2015.

LAW No. 10,406, OF 10 JANUARY, 2002. Law that Institutes the Civil Code. Available at: <http://www.planalto.gov.br/ccivil_03/leis/2002/L10406.htm>. Accessed on: 7 September, 2015.

DECREE-LAW No 2,848, OF 7 DECEMBER, 1940. Law that Institutes the Criminal Code. Available at: < https://www.planalto.gov.br/ccivil_03/Decreto-Lei/Del2848.htm>. Accessed on: 07 September, 2015.

 

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