It was not-so-in-the-distant past that the very mention of pirated or counterfeit products brought to the mind stuffs like designer handbags, luxury watches, illegal movie downloading. However, not to be missed is another category of piracy that has assumed alarming proportions and may prove an ominous portent for the future. We are talking here of pirated or counterfeit goods in the world of IT, which has all the potential of putting economy, IT resellers/solution providers and consumers at greater risk.
It does not require the genius of a rocket scientist to gauge the magnitude of the problem if you consider that a mind-boggling 42 percent of all PCs in the planet run pirated or unlicensed software. Needless to say, the users of those PCs are at risk for viruses, malware and spyware, resulting in the loss of data, indentity theft and systems failures.
As is the case in the other countries in the world, in India too it is the heyday for counterfeiters who are adopting sleazy tactics. Sale of fake and counterfeit products is rampant in seven sectors that include auto components, alcohol, computer hardware, fast moving consumer goods (personal goods), mobile phones and tobacco - which are worst hit by counterfeiting and smuggling. Widespread counterfeiting in these sectors has resulted in sale loss of genuine products to the tune of Rs.72,969 crore in 2012.
It is in the essential fitness of things that vendors and the resellers must work closely. It is incumbent upon them to monitor the supply chain from end to end and in the process they must educate both their staff and their customers.
Pirated or counterfeit products may save the consumers a few bucks. However, they not only push the consumers to potential data loss and system failure, proponents of counterfeit products are funded by criminals and this results in the undermining of the economy.
Various other vendors have also geared up to counter counterfeiting and help comb out these ticks which would end up siphoning out confidential details of the user leading to a larger chaos. If this is let to continue, in no time the country will turn into a pirated products ghetto.
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Sumeet Khanna
Director – Genuine Software Initiative
Microsoft India
Sumeet Khanna, Director – Genuine Software Initiative, Microsoft India, asserts, “Software is pirated in order to save money. However, the reality is that with pirated and counterfeit software, the user ends up paying for malware, Trojan, adware and other harmful viruses. Some of these malware amounts to tracking every move of the user and has the capability to steal user’s personal and financial details, allowing cybercrimes to take place.”
Although some computer users may actively seek pirated software in the hope of saving money, the chances of infection by unexpected malware are one in three for consumers and three in 10 for businesses, according to a new study commissioned by Microsoft Corp. and conducted by IDC. As a result of these infections, the research shows that in 2013, consumers will spend 1.5 billion hours and $22 billion in identifying, repairing and recovering from the impact of malware, while global enterprises will spend $114 billion to deal with the impact of a malware-induced cyber-attack.
According to BSA report in 2011, the piracy rate for India hovered at 63 percent driving the commercial value of software theft to $2,930 million. The piracy rate has declined marginally from 69 percent in 2007 to 63 percent in 2011, but the commercial value of unlicensed pirated software has increased in value over the years.
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Umang Bedi
Managing Director, South Asia
Adobe Systems
Umang Bedi, Managing Director, South Asia - Adobe Systems, opines, “Adobe is committed to serving the community of creative professionals, publishers, developers and businesses who tend to create, publish, promote, and monetize their content anywhere. Adobe has a highly experienced legal team and is always prepared to answer product and policy questions. Adobe has a case support system which is experienced at helping to build and prosecute piracy cases. From identifying targets to maintaining evidence, Adobe is ready to provide organizations with the support they need. Adobe also invests in training and is ready to assist law enforcement to identify counterfeit products and understand which products are legal, as well as provide relevant information on product valuation. Adobe can also offer customized training to various organizations. Umang adds, “Adobe believes in creating awareness amongst consumers by educating on safeguarding themselves against counterfeit products. Adobe provides detailed guidelines on how to identify and avoid pirated software. We are also proactively working with trade bodies and associations to build awareness and encourage the members of associations to adopt genuine licences use by offering them attractive value proposition. With Adobe Genuine Software, you'll receive technical support, important updates, and future upgrades. Your programs will be safe, stable, and compatible with your computer.”
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Joydeep Dey, Market Analyst, Channels, IDC, says, "By counterfeiting Hard Copy Peripherals products and consumables, dealers are making huge profits. The recent introduction of BIS Certification by the Government of India effective from April 2013 will help Government stop this menace. Vendors have also become innovative and aggressive these days. HP has recently launched a smartphone application which helps a customer identify the authenticity of HP consumable by scanning the bar code. Most of the vendors including HP, Canon and Epson has also taken legal route too to bring the culprits to justice," says Joydeep Dey, Market Analyst, Channels, IDC.
According to a recent IDC study, it has been estimated that at least 80% of pirated software are counterfeit - so at least a third of PC software is counterfeit.
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To help educate consumers, vendors have to provide their partners resources for helping ensure their consumers are using genuinely licensed IT products. Nitin HiranaNdani, Director – Printing Systems, HP Personal & Printing Systems, shares more insight on this from HP’s perspective.
What constitutes counterfeit? How big a problem is counterfeiting today?
Counterfeit cartridges are remanufactured or refilled cartridges or sometimes available as compatible cartridges that are illegally packaged to look like HP original cartridges.
HP views counterfeit cartridges as a serious threat to its business interests and those of its customers, and is actively pursuing action against parties who manufacture or sell counterfeit cartridges.
Counterfeits are not limited to cartridges alone. According to an ASSOCHAM study(i), the sale of counterfeits, including cartridges, auto parts, electronics and other products, is estimated to grow to Rs.55,000 crore by 2013. According to a FICCI report(ii), smuggling and counterfeiting in seven key sectors is estimated to cause a loss of sale of Rs.72,969 crore to the industry, and the same costs the Indian government a whopping Rs.26,190 crore in tax losses annually.
How extensively are HP print cartridges counterfeited and where do counterfeit products come from and are sold?
The extensive infiltration of counterfeits poses a grave risk to our customers and channel partners. Close-to 1 out of 10 cartridges in the market today could be a counterfeit. In the last year alone, HP Global Anti-Counterfeiting (ACF) team seized counterfeited toners and cartridges worth crores of rupees in different parts of India.
What are some of the dangers associated with counterfeit print cartridges?
There are many dangers associated with counterfeit print cartridges. According to a 2012 Lyra research study commissioned by HP(iii), over 50% of the people who try non-original toners wish they had not bought one. The study highlighted that non-original toners can cause streaky, blotchy or faded prints. Also, when a non-original toner cartridge malfunctions, businesses can end up wasting their precious time and money trying to fix the problem.
What happens to seized counterfeit print cartridges and how is this a threat for Value Added Resellers (VARs)?
The seizures of counterfeits are actually undertaken by the Police who conduct various raids and arrests. The seized counterfeits are either used as evidence for pursuing the case against the counterfeiters, or are simply destroyed.
This is why we constantly urge our channel partners to be careful of their suppliers and avoid the risk of committing a crime by inadvertently selling counterfeit cartridges. This can lead to legal implications, including hefty fines for those found guilty of selling counterfeit cartridges.
What is HP doing to prevent counterfeit print cartridges from entering the country?
HP believes in educating its end-users and reseller community. HP’s Mobile Authentication service helps customers identify counterfeit ink and toner cartridges easily and conveniently. The Quick Response codes (QR) on the new HP security seals contain serial numbers to allow quick verification of the product’s authenticity. Also, all HP toner cartridges sold throughout the world contain a security seal on the packaging.
Moreover, HP security labels are designed with unique visual differentiations that are nearly impossible to reproduce in counterfeit.
