Counterfeits a Threat to PNG SMEs

  • Papua New Guinea small businesses are under threat of shutting down unless major action is taken to prevent the sale of counterfeits.  In a recent case, a small scale clothing and jewelry retailer has decided to quit a line of product it has sold successfully in the past, due to rise in counterfeits.

    Jades, a small clothing and jewelry retailer based in Madang, advised its customers in a social media posting earlier today that it would no longer be selling and designing Provincial singlets – a flagship product it has sold successfully in the past.  But the pressures of competing with counterfeits, mainly supplied by competing Chinese competitors has left the Madang based business with little choice but to cease supplying the relevant products.

    Jade added that it did not:

    have the buying power to buy in container loads therefore our prices are higher compared to our Chinese competitors…

    The obvious reason for their decision to quit was that it did not want to “feed them with new designs” obviously a more concerning issue regarding copyright of its designs.

    The response from its audience was one of sadness and anger.

    Some audience commented that it should not quit and make attempts to have their designs registered with the PNG Intellectual Property Office while other went to the extreme of suggesting they “sue them”.

    Others were straight up that quitting should not be considered at all and they “don’t back down yet“.

    This is one of many examples that many SME’s in PNG are now facing.  With rising counterfeit products, many small businesses are finding it extremely difficult to compete, particularly in pricing.

    This is a worrying trend because effectively, infringement of copyright and the lack of enforcement is pushing small businesses to the edge even at their infant stages of doing business.

    Having intellectual property rights is one thing.  The ability to enforce those rights against those who infringe upon them is an entirely different game and that is where most PNG SME’s are likely to have difficulty in which eventually will drive them out of business.

    PNG SME’s just don’t have the money available to protect and enforce their intellectual property rights.

    The Government needs to step up and protect SMEs.

    The repercussions are serious if they don’t.

    Intellectual property rights are essentially private but the Government has a fiduciary duty to protect its citizens who engage in small business to earn a living.  In essence, SME’s are keeping money in the country and with Government announcing their intention to create SME opportunities, it must also add that layer of protection that they need to remain in business and compete.

    And even more serious is that the lack of protection could discourage creativity and innovation.

    One possible option the Government could look at would be to establish an entity that could play a fundamental role in the protection of intellectual property rights specifically for SMEs.  As part of the function, this proposed organisation would be responsible taking in complaints from disgruntled SMEs, advising them on their rights and where possible take action against those who infringe those rights.  The proposed organisation would be separate from the Investment Promotion Authority which is essentially a statutory authority responsible for the registration of intellectual property.  The proposed entity would be more in line with active protection and enforcement of those rights owned by, preferably, registered SMEs.

    What do you think?

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