The much-talked about 2012 UEFA European Football Championship, co-hosted by Ukraine and Poland recently concluded in the month of July. What else was much talked about besides the matches was the black market in the Ukrainian sea port of Odessa. Dubbed the “7 km” market, it turned out to be a hub of product pirates and smugglers selling fake UEFA merchandise. Throughout the championship, cars crammed its giant parking area.
A short distance away, stood a branch of Epicenter, a chain of DIY stores that was sponsoring the tournament and was entitled to sell official fan merchandize. There was no shortage of parking spots here either – the difference was that they were all empty.
Intellectual Property Rights (IPR) is meant to protect the intellectual property of brands. Thus, only the official merchandise licensees like INTERSPORT and Epicenter are legally allowed to sell UEFA’s merchandise. Yet, no action was taken against the black market.
Despite the economic crisis, which has affected both traders and clients, 7km was as full as it ever was. The sellers made money off the goodwill and reputation of the brand UEFA, as happens in every case of IPR. The market witnessed 2,00,000 customers a day; customers who provided for an estimated 20 million euros in sale- day after day. Traders’ incomes rose by between 10% and 15%, with the market priding itself with a management of 60,000 jobs and also, its importance for the region’s economy. Taking these stats into account, one has to wonder whether the authorities chose not to interfere with the market’s functioning as part of a pre-discussed plan to help revive their economy.
Now coming to the other side of the coin, while the traders’ at the 7km market took home more money to their wives each night, the sales of the 15 official licensees dwindled. But did this actually affect UEFA? UEFA’s licensing programme allows football enthusiasts around the world to express their passion for football by owning a piece of UEFA’s competitions. But even if say, the said piece were a fake, would it reduce the passion felt by football enthusiasts? Especially when the aforementioned enthusiasts already knew that they were a fake?
We are programmed to believe that infringement of IPR, in any form, causes harm to brands. But in the situation we have been presented with over here, the consumers are better off as they are getting cheap versions of otherwise needlessly expensive products and even UEFA isn’t harmed in any way for it is not losing any money; all the money spent on manufacturing of the products is being lost by the official merchandise licensees when their goods just sit on the shelves unsold. Rather, UEFA profits as more and more consumers parading around in the fake UEFA jerseys, only end up providing free advertisement for UEFA and boosting consumer morale in its favour. It is fake but it is UEFA.
In short, the traders, the consumers and even UEFA, all three, gain. The only real losers are the official licensees. So, does this mean that a brand is actually profiting from the theft of its own intellectual property?
Shri Ram College of Commerce
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius