Williamson Maurice: Trade Marks Amendment Bill Copyright Amendment Bill (No 2) — Third Readings 
Williamson Maurice: Trade Marks Amendment Bill Copyright Amendment Bill (No 2) — Third Readings 
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Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I say from the outset that counterfeiting is always a vexed issue with the general public. If they think of counterfeiting at the level of someone bringing in a fake pair of Reeboks—they would be pretty tatty and fall apart and so on—in his or her luggage at some stage they do not think there is much wrong with that. But what I think is really important for the public to realise is that the trade in counterfeited and pirated goods is not only increasing in volume to very huge levels but also becoming very much more sophisticated and it poses huge threats to public safety. I will cover some of those huge threats to public safety in the future. So if there is anybody out there who thinks “Oh dear God the Government is now trying to stop someone with a pair of fake Reeboks or whatever.” that is not what this legislation is about. 
First let us get the Trade Marks Amendment Bill and the Copyright Amendment Bill (No 2) in perspective. Counterfeiting as I said is a major growth industry with the International Chamber of Commerce estimating that counterfeiting accounts for between 5 percent and 7 percent of all world trade. It is worth an estimated value of about US$650 billion a year and is projected to increase to about US$1.7 trillion by the year 2015. So to get it into perspective straight away we are not talking about nickels and dimes here; we are talking about very very large sums of money. Those estimated costs by the way do not attempt to include the losses to any of the businesses that developed the intellectual property or are associated with the counterfeiting or the piracy. The chamber also estimates that approximately 2.5 million jobs have been destroyed by counterfeiting and piracy so for those of us who are worried about employment around the world that also is a matter that I think is important. Counterfeiting and piracy are insidious activities although as I said before at the trivial end of it—the one-off or someone who happens to get a fake Rolex or whatever—most New Zealanders say that it does not really matter and so on. But I can tell the House that those are not victimless crimes. 
Quite recently there has been a very very big move a very big shift away from what we used to see as the luxury items—you know the fake Rolex watches the fake Gucci sunglasses or whatever. Now there is a move towards a big industry of counterfeited medicines food products electrical goods toys automotive parts and even aeroplane and helicopter parts. I say to everyone out there listening to be very very thankful that such rules are coming into place because it would be quite easy for someone to put a very third grade very low-level-of-safety piece of gyro-equipment into a helicopter and say that it was a genuine piece of whatever the Maserati equivalent of helicopter products is. Everyone would think they had bought and paid for that but it would turn out to be a complete counterfeit and after a couple of hours in the air it would snap give up and there could be quite a loss of life. 
So it is not just medicines—we all know that fake medicines cause major mayhem. I think the one that brought a bit of a smile to my face but that was also a bit shocking was a year or two ago when I saw on the news that some counterfeit Viagra had been intercepted that was made mainly from bird droppings. The major constituent— 
Hon Rodney Hide 
: Does it work? 
Hon MAURICE WILLIAMSON 
: Mr Hide asked whether it worked. I do not know whether it worked but Viagra’s main constituency for the fake counterfeit was bird droppings. It was in the news—I see Paula Bennett looking quite quizzical about it but it is true. I have to say that if people rely on certain medications for their heart illnesses or if they have respiratory illnesses or something it is a very serious issue that consumers may be taking a very well-known brand or product for their illnesses but it turns out they are taking a complete fake or knock-off that cost a couple of cents. It could be made of bird droppings or something else and it could endanger lives. 
So counterfeiting is a very big issue. It is not something that we should just put to one side and say that it does not do any harm. Counterfeiting is not a victimless crime. It is not a victimless crime in a number of other areas either. I know the Greens will be concerned about the no-victim crime area when it comes to some of the goods that are produced in sweatshops overseas by labourers who are paid almost nothing and who have no basic human rights or laws protecting them. A greater and greater number of these counterfeit goods are coming out of those appalling conditions where people are treated in subhuman ways. 
So I am delighted that we have reached the third reading of the legislation and that we are bringing into law these protection bills. I know that the Trade Marks Amendment Bill is coming in specifically with regard to the Rugby World Cup to make sure there are no counterfeits in relation to some of the products there. Even in one of my other portfolios the building and construction portfolio we have had a couple of alerts along the way of fake electrical goods—fake electrical transformers and so on—that look as if they are the real thing. They can be bought quite cheaply and consumers put them into their houses but who knows? Three or 4 months later those goods could end up bursting into flames and burning a house down. People thought they were buying the Rolls-Royce of electrical equipment but it turned out to be a complete fake—and I have already covered things like motor car parts and helicopter parts. 
I will just talk about the current border protection notice regime. Under the current copyright and trademarks legislation certain border protection measures are prescribed. Copyright and trademark owners lodge a border protection notice with the Customs Service. The notice regime is designed to facilitate copyright and trademarks owners taking civil action against the importers of counterfeit goods. Under the notice regime customs officials detain suspected items and formally determine where the suspected infringing goods appear to be subject to a notice. Then the goods are detained for a period of 10 working days pending civil action by the rights-holder against the importers of those goods. Importers are informed of the detention of their shipment and have the option of voluntarily forfeiting the suspected shipment to the Crown. 
Current estimates show that about 85 percent of detained shipments are concluded by the importer using the voluntary forfeiture mechanism. Under the current law in the absence of voluntary forfeiture by the importer or any legal action taken by the rights-holder the Customs Service must release the detained goods to the importer. Others import only enough stock at one time to run an online auction site or a stall. I think that is an interesting thing too. If they are bringing in small parcels of these counterfeits people rely on the fact that customs officers will pick up on only one in every so many and therefore it is actually worth the risk. If those importers are bringing in one parcel every 3 or 4 days and if one in every five gets intercepted and is forfeited then the importers are making such good margins on counterfeit property that it is worthwhile letting it go. 
This bill will bring up to date into modern law our protection of those legitimate products that have been made by legitimate companies who put their money into research and development and who put a lot of work into developing a product. I think the idea that now that one has developed something of real value it should be free domain or actually able to be copyright breached and so on is an anathema to a country like New Zealand where we want to especially protect a lot of the patents and the properties that we develop. I fully support the third reading of the bill.