Author: Adriana Nicacio

Source: ETCO Magazine, No. 12, April 2009

Almost five years after the creation of the National Council to Combat Piracy (CNCP), the government has record numbers to boast. Last year alone, the state seized more than 4 tons of counterfeit drugs, 6,7 million CDs and DVDs, 1,5 million cigarettes and 97.557 bottles of drinks. In addition, unlike neighbors, Brazil appears in this year's report by the International Intellectual Property Association (IIPA), based in the United States, for its active work “with the private sector to implement strategies against piracy. ”.

For the entity, Brazil has shown in almost all cases a clear appreciation of the importance of protecting intellectual property. But, in an exclusive interview with ETCO magazine, the chairman of the board, Dr. Luiz Paulo Barreto, says that society is still the biggest obstacle to the end of counterfeit products.
"The State alone does not solve it", guarantees Barreto. "We multiplied the prisons by 30, we have already carried out more than one hundred operations together with the Federal Police, the Federal Highway Police, the Federal Revenue and even Anvisa, but as long as there is demand, there will be pirated products." For this reason, the council's focus this year will again be on Brazilian education, with the involvement of formal commerce.

Research shows that consumers, while still purchasing counterfeit and smuggled goods, have changed their perception of purchase. Contrary to what happened a decade ago, when buying fake products as a pure and simple benefit, the population already recognizes that these products have their burdens. The loss of quality is obvious. A counterfeit JKS bearing exposed for less than a year at the Piracy Museum, at the Ministry of Justice, is black. The original, on the side, remains silver.

“The superfluous loses space with the crisis. But other products for daily use tend to be more in demand ”

Dr. Luiz Paulo Barreto, president of CNCP

The social cost of counterfeits, however, is less visible, but has already been measured by Unicamp. According to the university, with the end of counterfeiting around 2 million new jobs would be created in Brazil. Another liability may seem trivial, but it is not. The achievements of the Consumer Protection Code are lost because the advances, such as the possibility of exchange even if the product does not present defects, are not applied.

 

In times of crisis, the damage from piracy is even more serious, according to Barreto's assessment. The Software Piracy Study, done by IDC at the request of the Business Software Alliance in 70 countries, shows that 35% of the world's software is pirated. If the number of copies fell ten percentage points, there would be a growth of 400 billion dollars in the sector, with a tax revenue of 67 billion dollars. In the Brazilian context, the Brazilian Association of Software Companies (Abes) calculates an increase in local revenue of US $ 3,7 billion and tax collection of US $ 550 million, in addition to the creation of 21 thousand new jobs in the sector.

 

If the increase in unemployment is not enough to raise public awareness, there is a very convincing finding. More than 90% of Abes' expertise on computers with electronic fraud had pirated programs. In recent years, Brazil has achieved a 10% reduction in pirated software, the biggest drop in the world, and the trend is for it to fall even more. It happens that, in the current conjuncture, basic articles, such as clothes and shoes, become more attractive because they are cheaper than a legal product.
"The superfluous loses space with the crisis", explains Barreto. "But other products for daily use tend to be more in demand." As the main argument of those looking for a counterfeit product is the low price, CNCP started a series of meetings with the Federation of Industries of the State of São Paulo (Fiesp) to try to reduce the price of products such as glasses, watches, sneakers, games, CDs and DVDs.

 

Both the Council and Fiesp are taking inspiration from the success of the federal government's Computer for All project, which reduced the value of computers, with prices of up to 2.500 reais, by 9,25%, due to the reduction in taxes. The drop in price led to an increase in sales and a decrease in the informal market.
“We want to find a second success story. Even with the reduction of taxes, the government does not lose, because it gains with the increase in sales ”, says Barreto.

 

Another battle front is the creation, by companies, of popular lines, such as the launch of a pair of Nike sneakers for 99 reais, on Father's Day 2008, which was paid in three installments without interest. "Sales surprised," he says.

But, as long as the Brazilian is not convinced that an original product carries more advantages than a pirate, even if it is more expensive, the council will continue to intensify the repression. This year, 20 new actions will be implemented, with the creation of specialized police stations to combat counterfeit products, as already exists in São Paulo. "Piracy needs to be understood as an organized crime that also operates in drug and arms trafficking," says the president. He also wants to involve states and municipalities in the Cidade Livre de Piratação project, so that governors and mayors feel responsible for combating counterfeiting. If it depends on the efforts of the city of Blumenau, in Santa Catarina, the project will be a success. The city has decided that it wants to be at the forefront in the absence of piracy, and for that, local businesspeople have started studying promotional proposals to sell software with “must-see” discounts.

One of CNCP's objectives is to support the implementation of traceability for the pharmaceutical sector. The measure is complex because each drug must have in its barcode all information, such as the lot and the name of the laboratory. As a result, the consumer will know whether the product is counterfeit or original. "If we can implement traceability in 2009 in medicines, we will have taken a huge step," says Barreto. "Then we will go to all other products".

REPRESS AND AWARENESS

The CNCP's strategy, according to its president, Dr. Luiz Paulo Barreto, is to give more impetus to repression and encourage awareness of the harmful effects of this criminal practice. Counterfeit products are a worldwide problem.
According to Interpol, piracy moves USD 600 billion annually, while drug trafficking moves USD 360 billion annually worldwide.
Data from the National Union of Tax Auditors of the Federal Revenue (Unafisco) show that piracy in Brazil generates an annual loss of 30 billion reais in taxes. In addition, according to a study by the University of Campinas (Unicamp), product counterfeiting is responsible for the elimination of 2 million jobs.
To change this situation, the Council follows a list of 99 measures articulated with traders and government and civil society bodies to seek alternatives to the sale of illegal products. CNCP also intends to close partnerships with internet providers, in order to curb the distribution of counterfeit products.
Check out some of the measures in the Council's Action Plan.

The strategy of the National Council to Combat Piracy to contain the illegal market

1. Create the Divisions for the Suppression of Smuggling and Embezzlement and for Combating Piracy in the Federal Police Department and a section of the same nature in the Federal Highway Police Department.

2. Publicize government actions in the fight against piracy.

3. To recommend to the Judiciary the creation of specialized or preferential courts in intellectual property.

4. Recommend the creation of Public Prosecutor's Offices specialized in intellectual property.

5. Increase the exchange of information and agreements aimed at the extradition of criminals.

6. Include the theme of piracy in the Unified Public Security System.

7. To recommend to States, within the scope of the Single Public Security System, the installation of Specialized Police Stations to combat piracy and violations of industrial property rights.

8. Promote studies on admission, transit and input costs for the production of pirated articles.

9. To recommend to the Ministry of Education to carry out actions with the deans, for effective compliance with Law 9.610 (copyright) in colleges and universities.

10 Hold seminars / events at magistrates' associations, the Brazilian Bar Association and the Public Ministry.

11 Hold a seminar on piracy and crimes against intellectual property, within the scope of Mercosur.

12 Support the processing of legislative amendments, which allow for the carrying out of expertise by sampling pirated products seized, as well as to remove the need to describe all seized goods.

13 Identify transparent mechanisms for financing by the private sector of measures to combat piracy.

14 Study the international agreements that may influence the practice of piracy in Brazil.

15 Suggest to neighboring countries greater inspection of the borders suspected of transit of pirated products.

16 Support, with the Ministry of Planning, the increase in the number of Federal Police and Federal Highway Police and the Federal Revenue Service.