Thursday, 17 September 2015

We are all pirates

(First appeared in New Era 27 May 2015)

In the past few decades, most consumer have started to question the high prices paid for “branded” products and have shown their willingness  to but similarly branded products made in developing countries for much cheaper prices. In addition, with new technologies, many consumers are using the Internet and file-sharing services to get hold of digital products such as music and movies that would previously have to be bought but are now “shared” – with no costs to the consumer. Some consumers especially question products made by for example vehicle manufacturers and compare their prices to pirate products that seem to do the same job for a much lower price.
The World Intellectual Property Organization, WIPO, states that, “systems to protect intellectual property rights, currently in place across the world, have many loopholes that are being exploited by those producing fake goods, especially of well-known international brands. Counterfeit and pirate goods have huge negative economic and social impacts on any country and should be addressed collectively to stop or minimize losses.”
In Namibia recently there has been complaints by musicians and other artists that their copyrighted products have been copied or used without their permission. They have in their sights not only individual consumers, but also radio stations and the proliferation of jukeboxes throughout the country. They feel, quite correctly, that they have invested their time and money in producing a product (music, etc.) and other people are making money without giving them their fair share or reward for what is their Intellectual Property.
One of the main arguments for the protection of Intellectual Property (IP) is that without the financial incentive, artists and businesses would not invest in producing new products. In fact many businesses state that they would not invest in Research and Development (R&D) if they were not ensured IP protection.
While agreeing with WIPO and our local musicians, there is also a need to look at when a “pirate” or “generic” product can be of use to the consumer’s bottom line.
Let us first look at branded clothing products. Upon investigation it was realised that many international firms that started out as manufacturers have become marketing or branding firms. Quite a few such have in fact no production or manufacturing facilities at all but only look for products that they can associate their name with and have consumers purchase these products as being “originals”. A few years ago, I was fortunate enough to visit clothes manufacturing facilities across Southern Africa to see how these factories work and the products they manufacture. Imagine my surprise to find that the same factory is often the manufacturer for products that are branded differently. For example, one factory made socks and t-shirts that were practically the same in design and product quality and were branded for Edgars and Pep Stores respectively. Of course, when investigating the selling price, it was found that one store had a much higher selling price. Of course the companies involved explain that they have different customer types as well as the availability of credit at the upmarket store. While these arguments do make financial sense, the consumer is never informed that the different products originate from the same factory.
Another example that is starting to gain momentum for discussion is the high price of medicinal products that receive IP protection and provide huge profits to international pharmaceutical companies. In a sense, the high prices are justified for the amount of research costs, but does that imply that a poor consumer who cannot afford this price should be allowed to die? Many developing countries are looking at the high cost of medicine and introducing generic products (non-branded) at much lower prices to ensure each citizen has the right to quality medical care. It is necessary for Namibia to also start balancing the need for Intellectual Protection against the needs of its people.




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