Nokia IPR chief offers pharma advice on Chinese counterfeits

With many of the world's counterfeit medicines originating from China, it is important for pharmaceutical manufacturers to have a collaborative strategy in place which enlists the support of the Chinese authorities.

That was the message delivered by Lucy Nichols, global director of intellectual property rights at mobile phone giant Nokia, at an IQPC event earlier this year in which she described her own company's efforts to curb product counterfeiting.

Nokia has been something of a pioneer in the handling of fake Chinese copies of its products, in part because of the scale of the problem. On occasions, counterfeit versions of its new handsets have appeared on the market in China even before Nokia itself has launched them.

The company was the first western multinational to file a lawsuit over a replica of one of its handsets, albeit one which did not use a Nokia trademark. That lawsuit is still ongoing some years later, but in the interim it has claimed several important victories in the courts.

"If you have a counterfeiting problem, and the copies are being manufactured in China, then there is only really one way to effectively tackle it," Nichols told delegates at the Pharmaceutical Anti-Counterfeiting conference 

Companies must be prepared to put security staff in the field in China, including senior people. That not only allows you to develop a clear picture of the nature of counterfeiting, but also demonstrates to the Chinese government that you are prepared to commit resources to tackling the trade, she said.

"Nokia has achieved some great results in China because of that demonstration of commitment," she added.

She cautioned against an overly-aggressive approach when dealing with the authorities, noting that both the USA and EU have tried this tack in their negotiation approach - placing demands, threats and sanctions - to little effect.

But it is the companies whose products are being counterfeited which often suffer the backlash from this heavy-handed approach.

"People say that the problem is in China, but I am convinced that in fact the solution lies with China," said Nichols.

The best approach in China is to go into partnership with both the authorities and national companies that are suffering the same problems, said Nichols noting that many Chinese companies are suffering just as much from counterfeiting as their Western counterparts.

"Don't make demands, but give them information and work with them," she advised. "This won't be effective in all cases, but can lead to some spectacular successes."

'Keep the fakes in China'

Another key element in Nokia's strategy is focusing the bulk of its resources on border protection, which plays to the strengths of Chinese customs, which Nichols believes is among the best in the world in terms of cooperation and effectiveness.

The border-based strategy allowed Nokia to seize 11 million counterfeit products around the world in 2009, including 3 million in China alone. In most cases these were seized before they left China, because it is one of the few countries around the world that will screen exports.

"If the product is being manufactured in China, then you don't want it to leave China, and Chinese customs gives you the tools to achieve that," she said. That allows the product to be intercepted before it enters the global distribution network where it is much harder to track down, particularly once it enters free trade zones.

Chinese customs has a very sophisticated risk-analysis system to help them spot and intercept suspect shipments, but rights holders must be prepared to share shipping, logistics and other pertinent information with them.

Many Western companies do not yet feel comfortable doing this, but Nokia has reaped the benefits of trusting and working with them, said Nichols.

"If you do achieve this type of working relationship, you can get a really high return on your investment."