Fear and Trust

For all the misgivings one has in business, and in business relationships, the bottom line for the presence of adequate peace of mind for one to continue trading or developing is, and is always: Trust.

One cannot proceed very far without it in any social interaction and especially in those business areas which set out to solve problems.  This need for trust is one reason why there are Brands; because for goods and services carrying a Brand name one knows, one has a cool idea of what one is about to get when one buys an item.

Brands, when sound and reputable, go some way towards guaranteeing a level of quality and after sales support etc. And this is one reason why counterfeiting is at bottom parasitic – because it trades upon the reputation of someone else’s goods and services. It offers no guarantee of quality or of after-sales service etc, and when a person has been hoodwinked by a counterfeiter and the product he has bought is scrap; it is the Brand name which was traded upon which tends to suffer in its reputation; and also the company who is the legitimate owner of the Brand name; irrational though this might seem?

The reason for a decline in a genuine reputation of a bona fide Brand and its company being caused by illicit traders trading upon the Brand’s repute; is the knock which is taken on the Trust in that Brand name, and to the almost complacent ready expectations one has, when one has been used to buying that Brand. Thus customers loyal to a Brand can suddenly be shaken by a bad experience with it and so no longer buy its products.

The scale of the shock and distrust escalates enormously for a person hoodwinked by products counterfeited such as medicines, and say, vehicle parts like brake shoes and tyres, because of the perceived major risks of harm which accompany taking a drug which is not approved nor bona fide; or the large risk experienced in having brake shoes or tyres fitted to one’s car when they are possibly substandard.

These considerations then, show some of the ways that trust is central to trading and to doing business.

Because we are destined to ‘live by the sweat of our brows’ we are constrained to do business so as to earn our livings.  This also means that we are compelled to have to trust others who come to us to do business with us, and also to trust those from whom we seek out business.  The default position for doing business then, necessarily has to be one of ‘innocent until proven guilty’ and a prima facia openness of one’s approach to others, up to the point where that openness is no longer seen by us to be circumspect in regard to this person or that company, and so on.

There is much theology in this position in which we find ourselves, whereby we are compelled to trust in the first place; and to have to do so in a world which is often harsh and wherein many persons and groups are out for themselves without any social or moral qualifications on their relational behaviours.  We know the world is like this by reference to our own experiences; and that fortuitous remoteness of and anonymity for persons who use the Internet, make it a playground for those who thrive on catching out the unlucky; those who make some poor and regrettable decisions.  The web is brimming with scams and sharks and people who are simply of ill will or else hooked on schadenfreude.

Despite all this being the fact of the case; and despite us knowing full well that this is the fact of the case, we are compelled again and again when doing business via the Internet (and elsewhere) into and back upon that immovable default position of bona fide prima facie initial trusting of our newly met business associates.

And this is why old and returning customers and associates are so prized by us; because we know them and are able to assess any risks they might pose to us to a fairly exact extent. And now comes in a further paradox. For those who are ambitious in business old and returning customers and associates are never enough. Ambitious persons are always seeking new business and new business opportunities, which means necessarily meeting and doing more and more business with untested persons.

In addition it is the ambitious person who is most likely to be tempted to pick up a missed opportunity even when knowing it is to the cost of a competitor for him to do so; or else to be tempted to even less upright business practices as being convenient and expedient short cuts to wealth and position. (I discount from this generalisation the motivations of persons in dire straits or grasping at straws because they are say going insolvent, whose bad behaviour might be ameliorated by their obvious distress)

The paradox here is then that in the normal course of doing business it is the most ambitious who expose themselves to higher risk levels and are compelled to offer prima facie trust the most and most often; whereas the business person who is happy to earn and to live comfortably without great expectations exposes himself to less risk and is compelled to place less prima facie trust down than an ambitious person is compelled to. And so it is that the least trustworthy, the ambitious, are taught by experience that trust is an essential for them to be able to advance towards the orders of magnitude they desire.

Of course in here steps The Law; on the side of and in support of higher risk takers who meet with foul play against their businesses. The Law is then an arbiter of fair play which may be called into action by an aggrieved party in order for that party to attempt redress for what has been essentially an (alleged) breach of trust by an associate or client.  It is at bottom a breach of trust always; and it is always based upon the breach of the holy commandment: ‘Do as you would be done unto’.

John Milton:

‘Of Mans First Disobedience, and the Fruit
Of that Forbidden Tree, whose mortal taste
Brought Death into the World, and all our woe,
With loss of Eden , till one greater Man
Restore us, and regain the blissful Seat,
Sing Heav’nly Muse…..’

I quote Robert Burns also (back on the subject of Law):

‘Courts for cowards were erected

Churches built to please the priest

A fig for those by Law protected

Liberty’s a glorious feast!’

It is no co-incidence that ambitious persons and businesses are those who most frequently use the law and its courts so as to defend their positions against rivals and against swindlers and thieves.  Not only are they normally those who are most exposed to risks like these we are presently discussing; they as business entities present the best pickings for the scammer or for the counterfeiter, since – as we have pointed out elsewhere – the big guys and their companies go to extreme lengths to present a perfect and seamless front-end image and marketing regime to their multitudes of customers. Their Brands are thus considered some of the most stable, lucrative and sound in the world because of this window dressing of theirs; and damage when done to their Brands is some big bad news for them.

So the Law is from one angle a kind of backstop for the risk takers by it deterring and chastising those who would do to them ill for gain. The Law is the inferno one has to invoke and through which one must go so as to purge oneself by condemning one’s enemies to its raging fire.

Law in this case then is artificial and put in place to be evoked so as to take the place of trust whenever trust has been lost by a breach or by an abuse of business practice and of normative rules. But Trust in its pro tem prima facie default position remains the natural value by which day to day business is oiled and with which its engines run for the most part reasonably smoothly.

Trust and placing trust, especially in an unknown person or business and being under constraint to do so – this can be very stressful. The only solace at this time of initial contact when doing business is that the same stress applies equally – in almost Newtonian exactness – to the other side, to the other Party to the deal.  The curse of ‘the sweat of our brows’ then transpires to be a Godsend sent to us so as to bring us together – if not as undesigning amicable disinterested and extempore cordial strangers, then – and better than not at all – as persons looking after their mutual interests and in joint hopes for the sharing of benefits.

‘They, looking back, all the eastern side beheld
Of Paradise, so late their happy seat,
Waved over by that flaming brand, the gate
With dreadful faces thronged and fiery arms:
Some natural tears they dropped, but wiped them soon;
The world was all before them, where to choose
Their place of rest, and Providence their guide;
They, hand in hand, with wandering steps and slow,
Through Eden took their solitary way.”

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Copyright Offences in the UK – A General Resume

UK Copyright

The data given below here comprises the general drift of UK law on Copyright Infringement and its accompanying offences and penalties as at around the time of posting this article. The text in red has been highlighted in red by Anomalist blog and does not show in this format in the actual statutory law published by UK government.

Nor do the footnotes added into the data here show in the actual UK law as officially published and they too have been added by Anomalist blog.

The aim of writing this article has been to offer a taster and so encourage readers of it to go to the official statute law itself which is on view at:

https://www.gov.uk/government/publications/intellectual-property-offences

Infringing Copies

The statutory definition of an “infringing copy” of a copyright work is contained in section 27(2) of the copyright, designs and patents act 1988. This provides that “an article is an infringing copy if its making constituted an infringement of the copyright in the work in question”.

Offences: Copyright, Designs and Patents Act 1988

Under section 107(1) a person commits an offence who, without the licence of the copy right owner –

(a) makes for sale or hire, or

(b) imports into the united kingdom otherwise that for his private and domestic use, or

(c) possesses in the course of a business with a view to committing any act infringing the copyright, or

(d) in the course of a business –

sells or lets for hire, or
(ii) offers or exposes for sale or hire, or
(ill) exhibits in public, or
(iv) distributes, or

(e) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

An article which is, and which he knows or has reason to believe is, an infringing copy of a copyright work.

Under section 107(2) a person commits an offence who –

(a) makes an article specially designed or adapted for making copies of a particular copyright work, or

(b) has such an article in his possession,

knowing or having a reason to believe that it is to be used to make infringing copies for sale or hire or for use in the course of a business.

Under section 107(3) where copyright is infringed (otherwise than by reception of a broadcast or cable programme) –

(a) by the public performance of a literary, dramatic or musical work, or
(b) by the playing or showing in public of a sound recording or film,

Any person who caused the work to be so performed, played or shown is guilty of an offence if he knew or had reason to believe that copyright would be infringed.

Penalties: Copyright, Designs and Patents Act 1988

Section 107(4) provides that the offences under section 107(1)(a),(b),(d)(iv)and (e) are offences tryable either way

On conviction on indictment the maximum penalty is ten years imprisonment and/or an unlimited fine.

On summary conviction the maximum penalty is 6 months imprisonment and/or a £5,000 fine.

All of the remaining offences under section 107 are summary offences carrying a maximum penalty of 6 months imprisonment and/or a £5,000 fine.

DISCLAIMER: This article in no way aims to be professional legal advice. It is for general cursory consumption only and it is not being recommended or advised or offered here as a work one should or could or can in any way base a legal action upon nor any contemplation of a legal action. The writers of and those associated with having posted this article on public display wholly and absolutely disclaim all and any liability which does and which might arise to any other person or party who has not taken note of or else not heeded this disclaimer.

Intellectual Property Rights Enforcement and Statistical Measurement

In regard to seizures of counterfeit products, a typical reported story in the news media, even in the trade media of the items of product concerned, let’s say cigarettes and tobacco, might read something like as follows:

The Assistant Director, Criminal Investigation, HMRC, said:

“Disrupting criminal trade is at the heart of our strategy to clampdown on the illicit tobacco market, which costs the UK around £2 billion a year, and the sale of illicit alcohol which costs the UK around £1 billion per year.” (28 Jan 2015)
http://www.birminghammail.co.uk/news/midlands-news/customs-officers-seized-one-million-8533541

There is the old chestnut of an adage which assures us that there are : ‘lies; – damned lies – and statistics’; but do you ever wonder to yourself from whence originate assured assertions like these, usually alarming in their tenor, which emerge from the lockers of cargo within the minds of those who are termed by spokespersons as being ‘opinion formers’?

Now what I am able to tell you, and it is a veritable fact, is that figures like this item concerning the scale of counterfeit cigarettes smuggling in UK, are, for the most part, compiled and based upon ‘data’ taken from the streets of our major cities.

The UK cigarette manufacturing and marketing industry uses employees of its representative trade body to walk the streets of London, Birmingham, Glasgow, and to pick up cigarette packages which have been discarded by smokers in gutters. These packages are examined and segregated into a) counterfeit, b) duty not paid, and c) duty paid items, and it is from this kind of exercise that statistics like the HMRC guy bandied around arise.

Now this practice of the cigarette manufacturers is one of the better ones amongst those used in industry in general and on which are based statistical aggregations of magnitudes of counterfeiting and piracy. It has going for it one important thing – it is, albeit very broadly, empirically based and evidenced.

Of course one would never accept the calculation of one’s monthly salary based on such a schemata as this cigarette carton collecting entails, but as a very rough and ready ballpark it might just hold an iota of credibility for the tobacco industry? Although for the most part this guesstimate of theirs is on the cusp of acceptability for us simply because one asks oneself: what more is the industry able to do so as to guesstimate its losses? We soften and give them a few brownie points of empathy for their trying so earnestly.

Other industry sectors subject to counterfeiting and piracy almost always use evidence much less solid than the cigarette industry and quite frequently have zero empirical evidence on which to base their claims for scales of losses incurred. Local Government, National Governments and International Authorities all likewise, as often as they pronounce a figure or a percentage in the area of Intellectual Property fraud, are attempting ‘plucking geese out of the air’ – or might as well be.

This is why figures stated for the exact same scenario are very often in huge conflict with their colleagues’ and competitors’ figures in other countries or in other jurisdictions. It is likely, virtually certain, that if every EU nation was asked to give a figure estimate of say illicit ‘Brand X’ denim jeans imported into the EU in the course of a given year; there would be no satisfactory agreement between them. Their individual estimates would fluctuate wildly and merely act to muddy the waters still further rather than go anywhere towards solving the issue.

Why is this? Well, let’s keep it simple. Calculating a company’s money losses to counterfeiters is usually done by means of a concept called a ‘lost sale’. A lost sale in the abstract is the cost to a legitimate company of a consumer buying a counterfeit when the same consumer (had counterfeits not been available) would have had to have bought genuine. Hence the genuine manufacturer loses the price of one item of sale.

The problems begin when the abstract concept of the ‘lost sale’ begins to be applied to actual commercial day to day realities. Questions arise such as:

What is the genuine item’s price? In a free and open market such as the EU retailers are able to compete on prices and to undercut one another should they wish to; and they do. Furthermore identical genuine products are pitched at variant prices in different trading areas across the world. It is not uncommon that genuine items – say bankrupt stock – are offered heavily discounted to consumers. Discounts are also given for bulk buys and also to wholesalers. Many products have variant sets of accessories or bundles, and a like for like cost price is hard to ascertain.

Why use the genuine item’s price? A National Government statistician economically-speaking would be more interested in using the price the counterfeit item was being sold at perhaps?

There is a good argument broadly accepted in the music industry these days that, like mild inflation is desirable in an economy for it to thrive; so also a modicum of piracy and counterfeiting is conducive to greater genuine sales for the entertainment industries. The argument runs that people download free so as to ‘taste’ and if they like they will buy the genuine item thereafter.
In this last case it seems a ‘lost sale’ to the victim of piracy can represent in fact a plus money value sum!

But you will still hear the music companies and musicians beating up on the download and on the downloader, often sending out in the post to ‘culprits’ exorbitant compensation demands, and laying claim in the media to ruinous injuries. Companies on top of sales losses also lay claim to reputational and Brand status losses, and to damage to other intangibles. Music Collecting Societies likewise hit social clubs and old folks’ homes, church services and the gal who likes to listen to radio as she runs her market stall, criminalising them as nascent pirates and asking seriously wild fees for the privilege.

I grow so hot under the collar because there is a whole industry of half-baked statistical offerings which these rights holder guys promulgate and persist in. It is persisted in and promulgated precisely for this reason: to give a specious validity to their claims of grievous injury by the granny who plays The Beatles in her shop, or by the guy who likes to sing The Carpenters at the local karaoke.

One will note, this is a final flourish of mine, that always and without fail year on year, or at whatever period they are reckoned in, the statistical fictions bandied around increase in size and in monies lost to counterfeiters and pirates. They not only keep pace with inflation, they have an inflation bias of their very own. The industries themselves are in sole charge of, in control of, their own compilers of reports and reviews and of pseudo-statistical and other ‘calculations’. There is no balance.

The numbers are increased period on period because of two reasons, and two reasons only. One – to keep the pressures on legislators and the legal executive, which together with Parliamentary lobbying ensure, they believe, the best deals for the business environments of their industries.
And so they maintain a ‘siege mentality’ within all ‘right-thinking-people’ (excuse the pun)

Two – So as to put forward a sympathetic public face for stakeholders and rights owners, the songwriters and the musicians, the actors and the artists, the creatives, and so on; which helps to keep the public sweet towards them and so keep buying their saleables; since so much of the actual value due to them is ‘being lost’ to Intellectual Property theft. (Such incubated sympathy has generated a recent increase in copyright protection term in UK; now standing here at 90 years)

In the first book of The Republic, Thrasymachus attacks Socrates’ position that justice is an important good. He claims that ‘injustice, if it is on a large enough scale, is stronger, freer, and more masterly than justice’ . In the course of arguing for this conclusion, Thrasymachus makes three central claims about justice.

Justice is nothing but the advantage of the stronger
Justice is obedience to laws
Justice is nothing but the advantage of another

Thrasymachus

This is the way the big Intellectual Property rights’ holder guys see things, is it not?

 

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