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Introduction
Counterfeits are becoming a concerning issue in today’s global market, with counterfeiting-related problems increasing significantly. China, Hong Kong, India, the United Arab Emirates, Turkey and Russia are among the top provenance economies for counterfeit and pirated goods. Factors including the economic downturn, growth of online marketplaces and direct sales to consumers challenge existing anti-counterfeiting measures and make it easier for counterfeiters to target consumers directly.
The growth of e-commerce has created new opportunities for counterfeiters, making it easier for counterfeiters to list and sell their fake products to unsuspecting consumers. The sheer volume of online transactions and the rapid pace of online sales make it challenging to monitor and detect counterfeit listings effectively. The Internet provides a level of anonymity and global reach that facilitates the sale and distribution of counterfeit products. Counterfeits are a threat to brand value, undermine consumer trust, affect the country’s gross domestic product and pose a threat to health and safety.
Anti-counterfeiting laws in China
China leads globally in counterfeit and pirated products, with 80% of the world’s counterfeits originating from China. Further, 75% of the total value of counterfeit and pirated goods seized by US Customs and Border Protection (CBP) in 2021 came from China and Hong Kong. China has implemented various laws and regulations to combat counterfeiting in addition to the Trademarks, Patent and Copyrights Law, such as:
While China has made efforts to strengthen its legal framework and enforcement measures, counterfeiting remains a challenge due to the size of the market and complexity of supply chains.
Anti-counterfeiting laws in the United States
Counterfeiting is a significant issue in the United States, affecting various industries and posing risks to consumers and businesses. The US Customs and Border Protection (CBP) officers reported a 55% increase in counterfeit goods during the last fiscal year (1 October 2021 to 30 September 2022).
The CBP is the main federal agency responsible for combating counterfeit goods at US borders. Multiple US federal bodies develop and enforce e-commerce counterfeit goods regulations alongside the BCP, including the US Consumer Product Safety Commission, the US Food and Drug Administration, the Office of Intellectual Property Rights, the Federal Bureau of Investigation, and the National Intellectual Property Rights Coordination Center.
In 2020, the US administration issued an executive order to renew efforts to combat the e-commerce counterfeit goods market and introduced the SHOP SAFE Act of 2020. This put the onus of combating counterfeiting on third-party e-commerce platforms by making them liable for any consequences of counterfeit sales. Further, if counterfeit goods are being sold on a rogue website with an infringing domain name, the trademark owner may seek the transfer or cancellation of the domain name.
The Trademark Counterfeiting Act, 18 USC § 2320 (TCA) enacted in 1984, is the primary federal criminal law covering counterfeiting. It has amended the federal criminal code to make violation of the Lanham Act by the unauthorised or intentional use of a counterfeit trademark, a federal offence. Civil enforcement remedies for counterfeiting are provided by the Lanham Act. Owners of registered marks may also bring an action for trademark infringement under 15 USC § 1114, or absent a registration, infringement of unregistered marks and/or federal unfair competition under 15 USC §1125(a).
Anti-counterfeiting laws in India
India has experienced tremendous growth in online marketplaces developed both internationally and domestically. However, with the rise of e-commerce platforms, the menace of counterfeiting has increased substantially. Counterfeiting not only affects the brand value but also puts the well-being of the consumer at risk through the sale of sub-standard products.
According to a report prepared by Crisil and the Authentication Solution Providers Association (ASPA), almost 25%-30% of all products sold in India are spurious with counterfeiting being most prevalent in apparel and FMCG sectors, followed by pharmaceutical, automotive and consumer durables. The State of Counterfeiting in India – 2021 report published by ASPA Global highlighted that the five sectors most affected by counterfeiting were currency, FMCG, alcohol, pharmaceutical and tobacco. The report also found that the states of Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, West Bengal, Punjab, Jharkhand, Delhi, Gujarat, and Uttarakhand had the most counterfeiting incidents.
EUIPO and the Organisation for Economic Co-operation and Development (OECD) jointly published a report on ‘Dangerous Fakes’ listing India as one of the top countries in various categories when it comes to the origin of fake goods. Similarly, the office of the United State Trade Representative published a report called ‘Special 301’, which outlined issues with counterfeiting in general and revealed a list of markets located in Mumbai, Delhi and Kolkata that are notorious for selling counterfeiting products.
While India has no legislation dealing specifically with counterfeiting and piracy, civil, criminal and administrative remedies are available under various statutes:
Counterfeiting is a widespread commercial crime. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 established commercial courts at the district level, commercial divisions in High Courts, and commercial appellate divisions to deal with specified commercial disputes and with jurisdiction to deal with cases relating to counterfeiting. Further, the following forms of interim relief are available from the commercial courts:
The Indian Penal Code, 1860 sets out punishments for cheating, counterfeiting and possession of instruments for making counterfeits etc under chapter XII of the Act. The code’s provisions can be invoked in criminal actions, in addition to the provisions of specific statutes.
Other pieces of legislation, such as the Drugs and Cosmetics Act, 1940 and the Food Safety and Standards Act, 2006 also play a vital role in preventing counterfeits, especially in respect of pharmaceutical and food products. The laws empower enforcement agencies to seize and confiscate adulterated, spurious or misbranded goods and suspend the manufacturing licences of the people involved.
The Information Technology Act (ITA) and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 provide for the liability of internet intermediaries, such as internet service providers, e-commerce websites and online payment gateways. While the intermediaries can claim safe harbour by limiting their liability under certain exemptions provided under the ITA, the Indian courts are now also taking a stricter view on internet intermediaries, and the scope of safe harbours enjoyed by intermediaries is narrowing, putting greater responsibility on intermediaries to prevent online infringement.
Another effective legal framework to resolve issues relating to domain names in India is the IN Domain Name Dispute Resolution Policy (INDRP). Any person aggrieved by the registration of a ‘.in’ domain on the grounds that it is identical or confusingly similar to his or her name or trademark may file a complaint before the National Internet Exchange of India, an administrative body for resolving issues under INDRP. It provides a quick and effective grievance redress mechanism, and the proceedings are arbitral.
The Indian government has undertaken various initiatives to address counterfeiting. Specialised bodies such as the Intellectual Property Rights (IPR) Cell at Custom and the Economic Offence Wing (EOW) under the Central Bureau of Investigation (CBI) to investigate and prosecute counterfeiting cases have been set up. Additionally, awareness campaigns and training programmes are being conducted to educate stakeholders about the importance of intellectual property rights and the risks associated with counterfeiting.
Best practices for e-commerce platforms
E-commerce platforms and third-party marketplaces play a crucial role in combating counterfeiting due to the significant presence of counterfeit products in online marketplaces. Below are some best practices that e-commerce platforms can adopt to effectively combat counterfeiting and provide a more trustworthy and reliable platform to consumers:
Further, various e-commerce platforms have adopted mechanisms to combat counterfeiting. In addition to traditional anti-counterfeiting technologies, such as holograms, RFID tags and watermarked packaging, there are numerous modern technologies in place to protect from counterfeiting:
Recently, Amazon, the world’s largest online retailer, launched its Anti-Counterfeiting Exchange (ACX), an initiative aimed at tackling counterfeit goods on its platform.
Conclusion
The issue of counterfeiting is a sensitive one that needs to be addressed with utmost importance, and it is imperative to adopt a comprehensive approach and put in place stricter norms to deal with counterfeits. A holistic approach involves considering all aspects of the counterfeiting ecosystem, including prevention, detection, enforcement, education and collaboration. It requires a combination of legal measures, enhanced enforcement efforts, public awareness campaigns, technological advancements and international cooperation. Furthermore, by working together, governments, law enforcement agencies, intellectual property owners, online platforms and consumers can create a united front against counterfeiting. Collaborative efforts can lead to more effective detection and enforcement actions, improved information sharing, and the development of best practices that can be implemented globally.
Manisha Singh and Priyanka Anand LexOrbis

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