Malaysia successfully combating product piracy

By Christiane Oelrich, IANS

Kuala Lumpur : Malaysia is currently engaged in a programme to shake off its reputation as a paradise for faked goods, and it's enjoying some success.

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"A year ago it was possible to buy anything you wanted here. Even the centres servicing the IT industry had shelves full of illegally copied software," says the head of the German-Malaysian Chamber of Commerce, Rainer Herret.

"But now it's as if everything has been swept away. The night markets are the only place where imitation goods are sold," he says.

According to figures from the US intellectual property trade alliance (IIPA), loss in business turnover put down to faked goods made in Malaysia fell from $328 to 147 million between 2001 and 2005.

In Malaysia's modern capital, four underground train stations are located between the floors of a shopping centre beneath the majestic Petronas Towers and the street market in China Town.

The designer label shops sell goods such as Rolex watches and Prada handbags while the stalls in Petaling Market are decked with imitation goods selling at knockdown prices.

"Rolex, for you a special price" is a standard phrase that sellers call to passers-by.

Imitations Gucci bags, Omega watches and Adidas shoes are to be found everywhere everything that a self-conscious shopper could desire for just a few euros.

"We have carried out raids," says Siti Eaisah of Malaysia's Intellectual Property Corp. "But sometimes the pirates are faster and cleverer than us. But we do get them in the end."

Malaysian patent and brand-protection lawyer P. Kandiah buys his whisky abroad. "A lot of adulteration goes on here," he explains.

The night markets, which are very popular with tourists, are not the only big problem, according to Kandiah.

"Anyone who wants a real Rolex will not go there, so in that way the original product makers are not losing money through the imitations."

But it's a more complex story when it comes to products such as car replacement parts or printer cartridges.

A Dutch company noticed that after years of a booming market for its water pumps in Malaysia sales suddenly came to a halt.

A product pirate had managed to make a passable imitation of their pump that even professional plumbers could not distinguish from the real thing.

Lawyer Linda Wang has a customer that makes printer cartridges who suddenly received a huge number of complaints from their clients. Once again a product pirate had managed to make an imitation so good it was very difficult to tell the original from the fake.

But it's with software, music and film where huge profits are to be made with copies.

"It costs about one cent to make one CD. If you can sell that for three euros you've made a great deal," says Wang.

In January, Malaysian police confiscated a CD making machine that could produce up to 4,000 copies a day along with tens of thousands of fake DVDs. Four men were arrested in that operation.

Lawyers are now calling for stiffer punishments for those involved in pirating goods and not just fines.

The police themselves can be another problem – in many raids up to 50,000 fake CDs and DVDs are found but only 30,000 declared.

Music pirating operations are often organised by gangs. "Sometimes officials are threatened so they keep a low profile," says Wang.

Kandiah says the music and software industry also have to change their strategies and get closer to their customers.

"There are bank machines on every street corner, but if you want to buy a CD you have to drive to the city, find a parking place and then locate a shop. People find it easier to buy a CD from a peddler who calls to their door."