The Trinidad and Tobago Minister of Health, Terrence Deyalsingh, made a call for pharmacies and pharmacists to do the ‘right thing’ by ensuring that they were not in the business of buying and selling unregistered pharmaceutical products. While acknowledging that unregistered pharmaceutical products are a global problem, his comments were focused on encouraging the owners and operators of local pharmacies to mitigate the problem. While that remains one avenue to combat the illicit trade in unregistered pharmaceutical products, there is a grander intellectual property issue to be discussed concerning counterfeit, generic and grey market products across all industries.  

Counterfeits

Counterfeit goods are those that are made to resemble legitimate goods and in so doing deceive consumers into thinking that they are buying the original product. In modern times the quality of counterfeit products has significantly improved and as a result they can be very hard to distinguish from the real item. Counterfeit items are not limited to items like shoes, clothing and watches, but also include electronics, pharmaceutical products and even spare parts for vehicles. Counterfeits are also no longer limited to back alleys and shady streets but feature prominently in physical and online retail stores. In some instances, the sellers may not even know that they are selling counterfeit goods.

Counterfeit goods are illegal because they use the intellectual property rights of others without permission. This could include the unauthorised use of patented technologies, brands and copyright works to deceive consumers into believing that the counterfeit product is produced by the original manufacturer.

Generics

Unlike counterfeits that are produced without the authorisation of the relevant right holders, generic goods do not involve infringement of intellectual property rights. Generics are merely unbranded products that are legitimately produced. For example, generics are most prominent in the pharmaceutical industry where the patent for a drug has expired. Upon the expiration of a patented technology, third parties can legitimately manufacture and sell that product without the permission of the right holder. However, they cannot brand it using the trade marks or copyright works of the original right holder.

Unfortunately, generics are often confused with counterfeits because of their plain packaging and cheaper price. However, a well-made generic product will be subjected to rigorous quality control and will be equally effective as the branded version for a significantly lesser price. In developing countries, generic products should be welcomed because they provide access to products that can improve quality of life at an affordable cost.

Grey Market Goods

Grey market goods are neither counterfeit nor generic. However, their legality varies based on the type of intellectual property implicated and the respective rules on exhaustion. Grey market goods or parallel imported goods are those that are imported into a country and put on the market for sale without the authorisation of the relevant right holder. Grey market goods are produced legitimately with the authorisation of the right holder, but enter into a country without their permission. The appearance of grey market goods often differs from their local counterparts because the packaging was intended for a different territory. Often the tell-tale sign of a good that has been parallel imported is the inclusion of a different language on the packaging or a different material or look and feel of the packaging. For example, if a consumer is accustomed to seeing the packaging in English, but they see the same product with Spanish labels, it may be a parallel import. Similarly, if a consumer is accustomed to seeing a product in a cardboard box, but it is also available in a blister pack, the blister pack may be a parallel import. However, this is not a fool proof method to determine if a product is parallel imported because producers may use the same packaging for a wider region such as Latin America, which includes both English speaking and Spanish speaking countries.

Another way that parallel imports reveal themselves is with price discrimination. Parallel imported goods are often cheaper than the goods put on the market by the official distributor. It is this ability of sellers to offer a product for a lower price that makes parallel imports attractive as a business venture. That being said, while parallel imported or grey market goods have been legitimately produced, they may not be the exact same as what a consumer expects. This is because products, in particular, food and beverages, may be made using slightly different formulae to account for domestic tastes and preferences. As such, a snack may be sweeter or saltier or contain more fat etc, depending on the country it is parallel imported from.  

What Can Right Holders Do?

Right holders cannot object to the sale of generic products. However, right holders have significant legal mechanisms to control the importation and sale of counterfeit goods under the laws concerning patents, trade marks and copyright. For grey market goods, right holders can stop parallel imports for patented products and copyright works. Right holders should educate themselves about the legal mechanisms available to them to enforce their intellectual property rights with the support of the Customs and Excise Division and the Police Service. The brands Nike and Puma were able to enforce their intellectual property rights to prevent the importation of counterfeit goods bearing their trade marks. This protection is equally afforded to local entities with intellectual property rights.  

What Can The Public Do?

The public is advised to become more discerning about their purchases. If the price seems too good to be true, the product being offered for sale is probably counterfeit or a grey market good. While grey market goods are likely safe unless they have been tampered with or repackaged without due care, they may still not be what the consumer expected. Additionally, when purchasing expensive goods, consumers are advised to educate themselves about the make-up and composition of those goods. Many brands now offer counterfeit-checking security measures on their websites to allow consumers to determine if the product they are purchasing is legitimate or fake. These security measures usually include information on things to check for and the ability to check serial numbers.

Unfortunately, there are many counterfeit products in circulation across a diverse range of industries, and even legitimate businesses get caught off-guard. Given the risks that some counterfeit products pose, consumers who purchase counterfeit products should make the relevant government authorities aware because it could be a matter of life or death in the context of pharmaceutical products.

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