New Jersey: Where the Rubber Did Not Meet the Road

And a fortunate thing, that. Via MyCentralJersey.com, news that police are seeking an Edison man caught with 600,000 fake condoms. While not identifying the brand of condom, a police spokesman confirmed that the condoms were "substandard."

Eternal Vigilance

Andrew Jackson, the American President whose long face adorns the twenty dollar bill, once remarked that the price of liberty is eternal vigilance. In these hard times, CBS News reports that counterfeits are pervasive, hard to spot and dangerous. Consumers and businesses alike without much disposable cash can be tempted to look the other way for a good price on an item of questionable origin. Given the dangers of counterfeits cited by the article, eternal vigilance might also be the price of safety and peace of mind.

Stopping Traffic

It's the old story - attract the attention of a state trooper for a minor traffic infraction, only to be discovered couriering around over 600 counterfeit handbags worth over $100,000. Well, except for the handbags part, but still, contraband is contraband, and two Chinese nationals are in hot water over their indiscretion. Apparently, police dogs sniffed out the rogue bags. Who knew counterfeit handbags had their own smell? Or that police dogs were so smart?

Risking It All for Lust

Viagra has changed the lives of millions of men. What factors such as age, diet and stress have contributed to Erectile Dysfunction can be successfully combated with application of the little blue pill. But such advances in pharmacological technology are expensive, and those costs are passed down to the consumer in the form of high prices. So despite knowing little to nothing about many of the internet vendors dealing "discount" prescription drugs, many men have attempted to purchase Viagra online.

Now the BBC has published a piece illustrating the extreme danger these online hunters at the intersection of lustful and miserly face. And it's not just Viagra. Drugs for the treatment of conditions ranging from cancer to heart disease proliferate online, despite that 90% of all prescription drugs sold online are fake. These counterfeit medicines are often enough made up of materials such as "talcum powder, or even rat poison." The problem is worse in Third World countries, where counterfeits used to fight conditions such as malaria have killed scores of vulnerable people. But in the rich United Kingdom, many men have bypassed legitimate channels to purchase drugs. Aside from a 90% chance of having just thrown their money away, these men face a real risk to their health.

Ticket to Nowhere

My Authentics does not normally focus on counterfeit tickets, but ticket search engine Ninja Tickets has issued a press release guide to sleuthing out counterfeit tickets to sporting events. It contains some useful tips and is certainly somewhat related to our own topical sweet spot. So if you're in the market for some resold tickets, please read this guide before wasting your hard-earned money on fake tickets.

Presents Roasting on an Open Fire

Classic crooner Nat King Cole would not approve of this Christmas fire hazard: Counterfeit Christmas Lights Pose a Shocking Hazard. I can think of few things more detrimental to Christmas cheer than an electrical fire burning down the Christmas tree.

Terror in a Bottle

From The Independent in Britain, millions of British citizens could potentially be at risk from counterfeit medication. From high blood pressure and anti-cancer medications to Viagra, the problem is serious. With the World Health Organization estimating that 1% of all medications worldwide are counterfeit, seven million prescriptions in Britain per year could be counterfeit.

The counterfeit medicine problem is complicated by several factors: first, medicines are frequently packaged and repackaged and sold and resold in Europe. This sheer complexity of the supply chain can make enforcement difficult. And diagnosis of counterfeit medications can also be difficult. Was it a fake pill that caused a "natural death" in a sick patient? Current medical procedures do not test the medication, meaning that plenty of dangerous pills could be ingested

And one other thing to worry about: terrorists. Intentional adulteration and sabotage of medicine is possible. With detection difficult and danger high, poisoning drugs could be low-hanging fruit for evil doers.

Cannes Fake Festival

Or rather, an anti-fake festival. From DFNI Online, news from Cannes that the Tax Free World Association (TFWA) played host to the signing of the Declaration of Cannes. According to this article, the Declaration of Cannes is an agreement between nine countries that will help fight the global $700 billion counterfeit luxury goods industry.

Up in Smoke

Counterfeit cigarettes seized in a raid in Felixstowe (UK). The cigarettes were hidden in a consignment of fireworks.

Paying the Piper

We recently commented on a Japanese poll showing a majority of Japanese citizens condoning the purchase of counterfeit goods. Anecdotally, we have further evidence of this worldwide trend in the American Presidential race.

The Authentics Foundation will studiously avoid the appearance of favoritism or partisanship during this American presidential election season. Counterfeiting is, after all, a problem that transcends party loyalties, and we are hopeful that both major tickets would use the levers of American Federal Government power to fight counterfeiting. But given that, we would be remiss if we did not comment on this recent photo of Sarah Palin's daughter Piper carrying a fake Louis Vuitton bag.

We do not know, of course, who purchased the bag or if the Palins were aware that Piper's handbag was counterfeit. And even so, a huge swath of Americans do not realize how profits from counterfeit goods can fund some truly undesirable activities such as child labor or criminal enterprises. The Palins also have a lot on their minds these days. Nevertheless, that the daughter of a Vice Presidential candidate can casually tote a fake handbag through a minefield of media and image handlers illustrates how deeply ingrained the consumption of counterfeit goods is, even in faraway Alaska. Highly discouraging stuff.

Fried Apples

I use a MacBook Pro to manage this blog, and it is possibly my most cherished possession. When I read stories like this showing fake power adapters that could possibly fry the motherboard of my baby, my blood runs cold. I suspect most other Mac owners would react similarly. Given the stakes, how anyone could take a chance on a "cheaper" adapter is mystifying.

Japanese Dissonance

Discouraging news from Japan, where a poll found that 52% of the people surveyed condoned the purchase of counterfeit goods. Even more discouraging is that the Japanese government has been attempting to raise the public's awareness concerning the dangers and drawbacks of counterfeit goods, and that the number of Japanese condoning counterfeiting has risen despite this campaign.

That these attitudes occur in Japan is even more disheartening. Japan is resource poor but highly educated and wealthy in large part from its innovations and intellectual property.

Smoking Dragon, Royal Charm, and the PRO-IP Act

What do you get when you combine four FBI Agents, 62 Chinese smugglers, and a billion counterfeit cigarettes? Besides the plot of a Hollywood potboiler, you get the tale of an intricate counterfeit cigarette bust that spanned several continents, a slew of agents, six years, 1,000 meetings, and enough fake smokes to supply every American man, woman and child with more than a few carcinogenic puffs.

Writing for the Center for Public Integrity, Te-Ping Chen brings her readers into the murky world of counterfeit cigarettes. Through bribery and sheer volume, Chinese cigarette counterfeiters overwhelm the inspection infrastructure in China and the United States. The numbers are startling. A shipping container of one million counterfeit cigarettes can cost about $120,000 to make, but can sell for as much as $2 million in the United States. A bribe of $20,000 can ensure safe passage out of China, and then it becomes a game of chance stacked in favor of the counterfeiter. Cargo containers are only inspected 22% of the time on average in the United States. While seizures are considered a cost of doing business for these smugglers, a run of bad luck seizures tempted the counterfeiters in the story to attempt to purchase protection from the Italian Mafia. Unfortunately for the villains, the Mafia fixers turned out to be FBI agents.

Te-Ping Chen does an excellent job of detailing the intricate nature of the smuggling world. Through the well-worn trade paths of cigarettes also comes counterfeit money, fake pharmaceuticals, and weapons. Notorious bad actors like the North Korean government profit greatly from the criminality. No doubt, a weapon of mass destruction could conceivably slip through safeguards using these same trade routes.

And what does this have to do with PRO-IP Act? Plenty, in fact. The PRO-IP Act goes to the root of the counterfeiting problem by increasing the price of doing business in counterfeits. Doubling the fines per counterfeit violation is a good start. Increasing diplomatic resources will also help, as it could enhance cooperation with law enforcement at the point of origin. And with counterfeit cigarettes often unhealthier than the real thing, criminal penalties for selling counterfeit items that do bodily harm could possibly ensure long jail sentences for the counterfeiters of cigarettes and other types of potentially harmful contraband.

This is an excellent article - entertaining, informative and even poignant in parts. Towards the end of the tale, two of the counterfeiters at the center of the investigation presented their undercover FBI Agent with two Rolexes as a wedding present for the mock gangster. "These aren't counterfeit, are they?" asked the agent. "No," replied the suspect, "these are the real deal."

You'll think Goodfellas, and you won't be far off - or disappointed. Read the whole thing.

Signs of the Times

Underwriters Laboratories, the guardian of global product compliance, has issued a press release warning customers that signs made by a company called "Clover Signs" bears the UL mark without having been approved.

Watch This!

From the Wall Street Journal, a watch that cannot be counterfeited. Or at least, not yet.

The watch is made by Vacheron Constantin, the venerable Swiss watch maker that first started making watches in 1755. This old school outfit employs cutting edge technology and clever technique to fight counterfeiting. Using "layers of invisible UV marking, laser perforations of some watch parts, special high-security inks, and other measures used to secure passports and currencies like the euro and Swiss franc," Vacheron Constantin has designed the "Quai de l'Ile" watch it claims is "impossible to counterfeit." If you hold the Quai de l'Ile under ultraviolet light, a tiny image of the sun appears between the 1 and 2 on the watchdial.

The article sounds a warning - counterfeiters have become increasingly capable themselves, so Vacheon Constantin's braggadocio may be misplaced. Nevertheless, anti-counterfeiting techniques like these can keep the brand owners one step ahead of the counterfeiters, and that, even if only temporary, is a good thing.

Read the whole thing.

PRO-IP Act

President Bush signed the Prioritizing Resources and Organization for Intellectual Property Act (a.k.a., the PRO-IP Act) earlier this week.

You can read about it here and here. The full text of the PRO-IP Act can be found here.

The PRO-IP Act establishes increased penalties for counterfeiting violations and strengthens America's ability to combat counterfeiting, including by the following means:

• Treble damages in civil actions and a doubling of criminal fines.
• Strengthened penalties against sellers of counterfeit goods that do physical harm.
• Increased seizure ability by law enforcement in copyright cases (normally, pirated media rather than counterfeited manufactured goods).
• Increased diplomatic resources and attention to the problem of counterfeiting and piracy by dedicating ten "Intellectual Property Attaches" to staff American embassies to promote the protection of intellectual property as a formal component of international relations.
• $25 million to help local law enforcement develop anti-counterfeiting law enforcement techniques.

There has been a large amount of online commentary (also here and elsewhere) about the PRO-IP Act and its impact, but the chatter is mostly concerned with the effects of the law on online piracy of music and entertainment.

In addition, there has been some debate on whether the full intent of the law will be carried out. For example, Counterfeit Chic's Susan Scafidi writes that the new Intellectual Property Czar will likely be appointed by the next President. Unless there is a late surge by Senator McCain, Senator Obama is likely to be elected the next President. Scafidi believes that he could then appoint Larry Lessig as the first IP Czar to enforce provisions of the PRO-IP Act. While Lessig advocates a radical loosening of enforcement of copyright, his primary focus is on the intangible world of the internet rather than physical counterfeiting. Lessig has shown relatively little interest in undermining the real world regime, and as such, I must respectfully dissent from Professor Scafidi's analysis (at least in terms of "real world" counterfeit goods).

Wired's Threat Level Blog is polling its readers on who should be the next Intellectual Property Czar here.

And while $25 million dollars sounds impressive, the actual application of the monies (spread over the entirety of the United States) may well be insufficient for the task at hand.

While attention and controversy swirl around the copyright/media portion of the PRO-IP Act, there is little doubt and debate that for the real world manufactured counterfeits, the increased enforcement is very welcome and a very positive step in the right direction.

Don't Brake for Fakes

From SkyNews, a spotlight on fake auto parts. Imagine trying to make a sudden emergency stop with fake brake pads made from compressed grass clippings and wood chips. Really, could there be anything more dangerous?

Fake Grass

If you click on the image to the right, you will read an excerpt of an interview with Phillip Jennings, founder of Phillip Jennings Turf Farm. Mr. Jennings has successfully developed golf turf for areas normally considered too dry or inhospitable for normal grass. When asked what his biggest competition is, he says, "Piracy."

Milking Profits from Fakes

Tainted milk from China has sickened more than 53,000 children while killing 12. While a food safety issue for sure, the recent tainted milk scare is likewise a counterfeit issue. These evil counterfeiters dilute the milk and add industrial chemical melamine to cover their tracks. Milk tainted with melamine masks dilution by tricking protein detectors into detecting the right amount of protein in the milk. Unfortunately, ingestion of melamine causes kidney failure in babies. Parents think they are buying "real milk" for their children, but are instead buying counterfeit milk.

As with many other industries, milk is a good where counterfeiters flourish due to the large payoff and small risks of detection and punishment. Bee Wilson explains in this New York Times Op-Ed piece that the milk tampering problem today in China is in some ways an echo of 19th century New York City. Lack of refrigeration and high demand in densely urban New York gave rise to temptations to dilute milk and cover up the tampering with flour - or worse. The deaths from bad milk sparked a movement that ultimately led to government reform and the establishment of oversight agencies. The American food supply chain, while not perfect, is a heck of a lot better today because of the reforms.

Many of the same conditions occur in China today. Chinese regulatory agencies are still nascent, and are often easily bought off. Children are dying. Popular rage is simmering. But perhaps like 19th century New York, the recent scandals could spark reforms necessary to safeguard the food supply chain from counterfeiters.

Excellent and fascinating piece. Read the whole thing.

Real Tanks Defeat Fake Goods

Ah, the Russians. As an American growing up in the Age of Reagan 80's, the Soviet Russians made for the perfect villains - powerful, ruthless, cunning. Armed with nuclear weapons and commanding an enormous Red Army, the Communist hordes would stop at nothing to defeat the West and subvert democracy under the yolk of Lenin and Marx. Or so my teenage mind believed.

With a new Cold War of sorts starting following Russia's partial annexation of Georgia, it stands to reason that the Russians might want to encourage activities to undermine the capitalism of their old foes. That part might be true, but we see that counterfeiting harms the Russians, too. The Class 46 blog shows some photos of powerful Russian T-80 tanks rolling over unspecified counterfeit goods. The goods, ground into dust under the 42-ton tank, never stood a chance.

Now that's some law enforcement.

False Religion

Alana Semuels of Tribune Newspapers penned this article concerning the rising trend in counterfeiting luxury blue jeans. Brands such as True Religion are routinely faked, and the article delves into some of the reasons why and steps taken to counteract the problem.

Video - Counterfeit Drugs

From Euronews, a longer version of a video I had previously blogged about. Counterfeit medicine is often made from nothing more complex than brick or cement dust, but the markups and profit margins are incredible. Given the disparity between penalties for narcotics and counterfeit drugs, many criminals are turning towards counterfeiting medicines as a means to make large profits with relatively little risk. For sick patients relying on the medication for survival, the risks are of course much larger.

The money quote is from Mick Deats from the UK Medicines and Health Products Regulatory Agency, who says, "This is high profit, low risk, and we have to change the risk balance so that this becomes too risky to operate."

Your Invitation...

Dave Wieneke, the strategic internet brain behind the aptly-named "Useful Arts" blog, is hosting a free webinar regarding the seminal Tiffany v. eBay decision. And you're invited! Noted trademark guru Martin Schwimmer is among the luminaries scheduled to offer his thoughts.

Increased Counterfeiting Linked to Inflation

In Italy, rises in prices linked to increased purchases of counterfeit goods.

The Sun Never Sets on Counterfeiters

The $600 billion per year counterfeiting problem is detailed in this New York Sun piece by Liz Peek from last week. The article summarizes the problem succinctly:

"Designer goods are just the tip of the iceberg. Sales of all counterfeit goods are estimated at more than $600 billion annually, up from $5.5 billion in 1982.... sales of counterfeit pharmaceuticals now total some $70 billion a year worldwide. Some 35% of the software installed on computers in 2005 was fake, more than $12 billion in copied auto parts are sold annually, and there have been more than one hundred airline crashes caused by fake (and faulty) parts. This is a serious and huge business, threatening the health and safety of people everywhere."

The article then details a two-pronged strategy to deal with counterfeiting. While enforcement at the production level is difficult in China (the epicenter of the counterfeit trade), consumers can be made aware of the counterfeiting link to drug trafficking, child labor and terrorism, while technology can enhance interdiction of counterfeit goods by law enforcement and merchants. Eastman Kodak is specifically noted for its secret innovation that enables law enforcement to distinguish between authentic goods and even "perfect fakes" with a handheld scanner. Noting the $10 billion per year market for such technology, Peek surmises a windfall for those security experts able to stay one step ahead of the bad guys.

Mmmmmm...... beer.....

Although not the beloved Duff Beer of mythical Springfield, even the über-parochial Homer J. Simpson would object to counterfeiters entering the beer realm in China.

Hat Tip: Sybeeritic

Loose Threads

AgResearch, a New Zealand-based research institute, has announced a technological breakthrough to help combat counterfeiting in the apparel industry. This new technology, called Verifi TT, allows its user to distinguish between identical items of clothing, even when the two garments are indistinguishable in fabric, color and pattern.

Costing less than 0.1 percent of the total cost of the fabric Verifi TT can distinguish between two identical articles made of the same fabric, colour and pattern through detection of an otherwise undetectable and unique high-tech thread woven into the garment. The thread can then be read by handheld scanners. AgResearch expects Verifi TT to be on the market within the year.

Counterfeiters' Depraved Bedfellows

As a native New Yorker, I have seen my beloved city transform from the filthy and crime-infested Gotham of the 70s and 80s to the gleaming and relatively crime-free Metropolis it is today. This transformation came about largely from the political will to implement police counters to "broken windows." According to the Broken Window theory, enforcing the law on small crimes such as vandalism (breaking windows) not only improves the quality of life for city residents, it also nets criminals wanted for other crimes. If someone is willing to jump bail for a large crime, why wouldn't he also be willing to commit a more menial sin, such as jumping a subway turnstile? As the NYPD began to enforce the law for smaller crimes, they suddenly netted a large number of criminals wanted for larger crimes. Scofflaws of misdemeanors and flouters of felonies turned out to be largely the same people. So as law enforcement took action enforcing the smaller violations, all crime dropped steeply.

In the Philippines, Emil Jurado writes in the Manila Standard of a similar phenomenon encountered by Optical Media Board Chairman Edu Manzano (scroll to the bottom of the page). Manzano's job is to enforce anti-piracy laws, but he has found that the raids conducted by the OMB have captured large amounts of child pornography. As Manzano has no legal authority to enforce child pornography laws through his agency, he has decided instead to form the Anti-Child Abuse and Pornography Foundation, a public-private partnership to address his new-found concerns. God bless him.

But the larger point is this - counterfeiting is a criminal problem. Perhaps the public is not sympathetic to the enforcement of anti-counterfeiting laws on some items because the sellers are rich and the items expensive. But even counterfeiting these items is a crime. What Manzano has shown is that counterfeiting and piracy are gateways to the greater evils of child pornography. And while his actions and increased counterfeiting enforcement may not be solely paving Manila's transformation from Gotham to Metropolis, they are providing lifelong solace to those children who might otherwise have been victimized by these counterfeiting, molesting monsters.

Real iPod / Fake Design

From Andrew Wise, some photographic evidence that Apple borrowed elements of its new iPod Nano model design from Chinese knock-off versions of previous iPod models. The photo angles and quality make Wise's case somewhat inconclusive, but if true, Wise's assertion is richly ironic.

History is Written by the Winners

A comprehensive look at the recent Tiffany v. eBay decision by R. Bruce Rich and Mark J. Fiore, eBay's outside counsel from the deluxe legal salon Weil, Gotshal & Manges, who successfully defended eBay in the suit.

Another Vodka Shot

Here is an interesting entry from the sporadically updated yet highly intelligent Trading in Words blog detailing the counterfeit vodka economy. Because high-end vodka tastes so smooth and low-end vodka tastes so awful, counterfeiting the low-end booze is more common than counterfeiting the higher-cost product, because consumer expectations for the cheap stuff are so low.

Unlike the case with other counterfeit products, consumers don't see much of a price difference between real low-end vodka and fakes. Retailers and bootleggers, on the other hand, do see the difference and rake in the money. The lack of price differential between real low-end vodka and its fake counterpart is a real problem for discerning consumers, who often use out-of-line price signals to discern between real and fake products. And consumption of fake vodka is unsafe and unwise at any price. With retailers purchasing from shady sources to achieve their windfalls, Trading in Words suggests automatic prison sentences for any retailer caught with a counterfeit bottle. Tough words, but a compelling case. Read the whole thing.

Heralding the Perils of Counterfeits

From the Calgary Herald, Paula Arab explains why buying counterfeits is such a bad idea. Using a recent Calgary police raid that netted over 7,200 counterfeit items as a starting point, Arab relates how buying counterfeits and knock-offs costs consumers in both long-term quality and consumer safety, all the while encouraging social ills such as child labor, organized crime and gang violence. It is a well-written piece - check it out if you can.

Authenticating Africa

Africa is a continent rich in beauty, culture and natural resources but plagued with poverty, war, famine and disease. Lately, Africa has found itself ill-equipped to combat a new torment - counterfeit products. With so many problems to address, the temptation for Africans to find bargains in everything from drugs to electronics can be overwhelming. However, Africans are beginning to understand the scope of the counterfeiting problem, and calls for more rigorous enforcement is a good first step to helping fight counterfeiting in Africa.

Blind Drunk

The counterfeiting scourge is a global trade phenomenon by and large, but its applications are always local. Someone in your community has purchased fakes and knock-offs, and while most fakes do not cause danger to their purchaser, many do.

In Britain, the Cheshire Trading Standards Office has issued a warning concerning fake Imperial Vodka. The counterfeit vodka contains methanol, a fuel causing warming of a very different and fatal sort.

The last line of the news item hints at one cause of the problem - murky supply chains. Purchasing vodka from supermarkets is safer than from small liquor stores or bodegas. No reason is given regarding why, but supermarkets buy in bulk, meaning that they can often command superior wholesale pricing directly from the manufacturer. This relationship ensures authenticity in the products supermarkets sell.

Smaller stores, alas, often cannot buy on the same terms. To compete with the bigger outlets, these stores sometimes enter the shadowy secondary market to purchase consumer goods.

And even when wholesale pricing terms are the same, a large supermarket will have corporate marketing and legal departments that are typically more risk-averse than their entrepreneurial counterparts. This caution is for good reason. One news item about counterfeit consumer products at a supermarket could destroy millions of dollars of supermarket brand equity, a problem not faced by anonymous bodegas and smaller retailers.

Video - How to Tell a Real Golf Ball from a Fake

Courtesy of the Boston Globe, a video and accompanying article that neatly encapsulates the problems of fake golf equipment. Globe reporter Jenn Abelson looks at the counterfeiting issue through the prism of Acushnet, the Massachusetts-based manufacturer of Titleist golf balls and equipment. Acushnet spends more than $2 million per year on an enforcement division that expends considerable time and resources in China investigating golf equipment counterfeiters.

The article explores the difficulty in enforcing rights in China, where counterfeiting operations often only temporarily close down. And those are the good outcomes - prosecutors often decline to prosecute, and factories are often tipped off before raids and investigators approach.

In addition, the article mentions the accelerating trend of using online marketplaces to ship counterfeit goods into the United States, bypassing customs and inspections. The risk of obtaining a counterfeit in such a transaction is still either discounted or not perceived yet by the consumer.

To me, the most interesting part of the article was the trend in some Asian markets to sell fakes alongside genuine golf equipment, showing the price differential between the two. If brands are the hallmark of quality, why would a consumer pay any value for a fake Titleist rather than a no-name brand?

And check out the video for a quick guide on how to tell a real Titleist V1 golf ball from a fake. Like a great smile, it's in the dimples.

Diplomats on Drugs

Not what you think, but the august and aptly-named Foreign Policy details some foreign policy implications of counterfeiting (paid registration may be required).

The article details the culprits (China and India are the biggest) and introduces the reader to several law enforcement figures who are simply overwhelmed at the sheer volume of the problem. Some enforcement may also require individual acts of heroism. In Nigeria, Dora Akunyili, a 54-year-old pharmacy professor, took over Nigeria's drug watchdog industry in 2001 and fought hard to reduce the percentage of counterfeit drugs in Nigeria. Akunyili succeeded. The Nigerian drug supply chain from 70% in 2001 to close to 10% today. Her efforts are helping to prevent counterfeit drugs from killing innocent Nigerians, like her own sister who died after taking fake diabetes medicine in 1988. These efforts have also endangered Akunyili, who narrowly escaped assassination, had her office blown up, and now lives with round-the-clock bodyguard protection.

On the demand side, humanitarian groups seeking to provide drugs to treat third world health problems are left with a stark choice. Either these groups purchase expensive medications through legitimate sources, or they go through more shadowy channels to purchase drugs that may be counterfeit and do not work.

And publicizing the counterfeiting of any drug is often a losing proposition for these drug companies: when counterfeiting of particular drugs is publicized, the public demand for the drug drops even through legitimate channels.

The World Health Organization (WHO) has taken a lead in trying to stem the tide of counterfeit drugs in the world pharmaceutical supply chain. They face real opposition - often, the governments they attempt to influence are also directly involved in profiting from the trade of counterfeit drugs. And even a powerful and influential organization like the WHO is not immune to political pressure. Quoting from the article:

The WHO has been vocal about combating fakes, but even it hesitates to embarrass member countries who allow fake drugs to enter the market. Unfortunately, many observers believe it may take large-scale casualties for real action to occur. As one British drug-security expert put it to me in April, “Action against al Qaeda really only took off after September 11.”

Scary stuff. Read it if you have the chance.

Fake My Ride, Part II

From Autoweek, the Authentic Foundation's Chairman, Frederick Mostert, describes some drawbacks of owning a fake Ferrari. Besides the peeling paint (a malady not typically endured by owners of real Ferraris), fake Ferraris have the unfortunate and deadly weaknesses of exploding gas tanks and failing brakes.

It would be a painful lesson to learn firsthand, but fake sports cars can be real death traps.

Fake My Ride

From PR Newswire, a recent report that the counterfeit auto parts industry is worth $16 billion and is growing at 9-11% per year. Some information on how to spot counterfeit auto parts can be found at Autotrends.

Allegations...

Via Liliana at Harper's Bazaar, the United States government is adding a new tool to its counterfeit-fighting repertoire - e-Allegations. By submitting an online form or by calling 1-800-BE-ALERT, a person with knowledge of counterfeit activities can alert U.S. Customs of the shadowy activities.

e-Allegations operates as something of a catch-all, its nets cast broadly for other trade, health and safety violations in addition to intellectual property crime. Given the level of organized crime involved in counterfeiting, the site offers a nice anonymity options for online submissions. Unfortunately, the heavy disclaimer (including an explicit warning of government monitoring of traffic and submissions) may well dampen the anonymity effectiveness. Check it out if you have the chance (or, if you know of some counterfeiters).

More Belgium Waffles!

Actually, waffles is not an accurate headline. More accurate would be a headline describing a split in the EU between the friendly decisions for rights holders (France) and for online marketplaces (Belgium). The judicial split is reminiscent of how different state and district courts in the United States can disagree, which promotes a de facto experimentation between regions but is also messier (and more profitable) for the lawyers. Seems like an issue big enough for the EU to grapple with legislatively.

Perhaps instead of waffles, the European decisions are more like a double-layered cake.

Summaries of the decision can be found here, here, here, and here.

Belgium Waffles on EU eBay Stance

A court in Belgium has ruled that eBay was not required to police its website for counterfeit goods. L'Oreal had sued eBay in Belgium for damages relating to counterfeit L'Oreal products being sold on eBay. The Belgium court ruled that eBay had no duty to keep its users from selling counterfeit items apart from the measures it has already taken.

This stance puts Belgium in agreement with the recent American decision in Tiffany v. eBay, but opposite the stance taken by a French tribunal in awarding damages to LVMH against eBay.

Developing.....

Tiffany appeals eBay Decision

Tiffany vowed to appeal its loss in federal district court, and made it official on Monday.

Can't Be Careful Enough

Some fakes are just darn scary.

Gold Medal Counterfeiters

Even with increased law enforcement, knock-off shops flourish at the Beijing Olympics.

UPDATE: Counterfeiting the Nazi Olympics.

Food Adulteration

Radio Mensa offers this podcast about the history of food adulteration, a sibling of today's counterfeiting. The podcast focuses on 19th century Britain, where the foolishly class-obsessed masses aspired "to eat the white bread of the rich and to feed their children an array of multi-colored candies once the preserve of the wealthy, but where almost no one asks how their bread could be so cheap yet so white or why their children's sweets can be colored in shades not known to nature."

Consuming the counterfeits of such luxuries was often fatal. Adulteration of beer was also a major problem, and it wasn't until after 1820 when the Western World made a concerted effort to combat the "swindlers" of food adulteration.

Fakeup

A blog post from Makeup Blog illustrates the confusion sown by counterfeit makeup products.

Counterfeiting May Be a Crime!

Courtesy of Counterfeit Chic, a billboard on the eve of the Olympics in Beijing.

'Hey, it's a start."

Counterfeit Olympics

The Olympics Ceremonies have shined a media spotlight on China, and this Sky News piece illustrates the counterfeiting occurring on the streets of Beijing.

The article illustrates two main points - first, that the Chinese government treats its own intellectual property (the Olympic mascots) with greater care than other countries' intellectual property, levying stiff fines and jail sentences for violators of its own IP while mostly turning a blind eye towards other infringement. And second, that these harsher penalties barely make a dent in the trade of counterfeit goods, with Beijing street vendors openly selling fake Olympic wares.

The irony is that through routine lax intellectual property enforcement, the Chinese government has created an environment where its own intellectual property is routinely violated.

Counterfeit Corleones

The rise of British organized crime is documented in this piece from the London Times. Note the prominence of smuggling in these criminal organizations whether it involves guns, cannabis, or counterfeits.

Ink-Stained Wretches

I speak not of fellow journalists (many of whom have clean hands in this New Media age), but of counterfeiters who have been counterfeiting pens. Haco Industries of Kenya manufactures Bic pens, and has been victimized by Chinese-based counterfeiters. Haco claims that its sales of pens are down 40%, primarily due to counterfeiting activities.

This story illustrates an important point - counterfeiters don't only hurt developed countries, but in particular, hurt developing countries. In fact, they often hurt developing countries more, as they are usually burdened with some combination of weaker laws, corrupt law enforcement, limited resources, less developed supply-chain security infrastructure, and a less-informed population and business class.

Africa has long been a cause célèbre with anti-poverty crusaders. The cradle of civilization has been torn apart by war, poverty and famine, and its people have suffered a great deal. A primary goal of good anti-poverty programs is to create self-suficiency - not merely to "give men fish," but to "teach men to fish." This self-sufficiency would allow Africans to create real wealth that in turn reduces famine and the desperate conditions often necessary to stir conflict. Enterprises such as Haco Industries contribute to Africa's tax base while employing scores of young men who might otherwise be fighting and dying. The counterfeiters here are not merely duping unknowing consumers, but helping to destroy the fragile economic ecosystem that has been developing into Africa's best hope for a prosperous and peaceful future. For these counterfeiters, it is not ink that stains their hands - it is blood.

Joining the Wrong Club

Among other things, Novia Scotia is known for its rugged Canadian seascape and scenic golfing vistas. Add golf club counterfeits to the mix, although to be fair, the problem is widespread.

UPDATED: Callaway provides tips to avoid fakes, with TaylorMade adding their own advice here.

Video - Dangers of Counterfeit Drugs

Outstanding video from the European Federation of Pharmaceutical Industries and Associations (EFPIA):

Chinese Counterfeiting Culture

Writing in the Asia Times, Peter Navarro takes a fascinating look at factors contributing to the pervasive Chinese counterfeiting problem. Using the problem of faulty chargers causing fires and electrical hazard, Navarro catalogues the widespread problem, from chargers to handbags to counterfeit drugs. Ending Chinese counterfeiting would be almost impossible, as he cites estimates that counterfeiting activity accounts for 20% of the total Chinese GDP growth, with significant curtailment likely to cause economic instability or collapse. But the problem is even deeper - it is cultural. The kicker:

These economic and political motives for Chinese piracy are strongly reinforced by a set of cultural norms that flow from an amoral fusion of a 60-year old Maoism and a centuries-old Confucianism. The core problem is that the government of the People's Republic of China was founded in 1949 on the abolition of private property. Thus, there exists several generations of Chinese executives who truly believe that, as former US ambassador James Lilley has noted, "any technology in the world is the property of the masses."

When one adds to this Maoist version of property rights a large dose of Confucianism, the counterfeiting and piracy picture comes much more sharply into focus. Since ancient times, Confucianism has revered, rather than reviled, imitation. The result is the perfect economic, political, and cultural laboratory for a counterfeiting and piracy boom.

Read the whole thing.

Punk'd

This blog doesn't usually follow counterfeiting in collectibles, but we'll make an exception for this story.

Punk rock. If any music genre could be more attuned to the misguided romantic notions that counterfeiting is sticking it to the Establishment, punk rock would be it. So a richly ironic story has emerged where former Sex Pistols manager Malcolm McLaren is teaming with British art kingpin Damien Hirst to battle counterfeiting.

The story occurs in England, where Hirst bought £80,000 worth of original Sex Pistols clothing allegedly handmade by McLaren in the late 70's. But then McLaren spotted the clothing, and knew Hirst had been had.

Hirst purchased the punk clothing from Simon Easton, proprietor of Punk Pistol. In a twist, McLaren had agreed to write the introduction to Easton's forthcoming book, and is now battling in court to remove the introduction.

Real Time Rolex

From DJB Watches, a particularly good tutorial on how to distinguish between real and fake Rolex watches.

Laying a Trap

Frustrated by light sentences for counterfeiters who scamper back into the dark forest after wrist slaps for counterfeiting, Louis Vuitton laid a trap in Canada and netted itself some big game.

Counterfeiting law in Canada resembles much of criminal law - light sentences for first-time offenders, with heavier sentences imposed for those who show a willful disregard for the law. Louis Vuitton took advantage of this escalating punishment system and human nature. According to this account found on IPBlog.ca, Louis Vuitton entered a settlement agreement with several proprietors of counterfeit goods in Vancouver in 2006. The amounts of the settlement barely amounted to wrist slaps - fines of $6,000 against each of three defendants (two corporations and one individual). After the settlement, though, Louis Vuitton kept paying attention to the defendants, who all reverted to their old counterfeiting ways. Armed with this previous settlement agreement, Louis Vuitton struck again, and obtained judgments nearing $1 million total. And, the judge allowed a "piercing of the corporate veil", enabling Louis Vuitton to hold the directors of these corporations personally liable for these bad corporate acts. Ouch.

The good news for the defendants? At least the presiding judge (the Honourable Madam Justice Mary Ellen Boyd) refrained from granting Louis Vuitton findings of contempt of court against the defendants. Which means that, if they decide to go to drink from that well again, the punishment could be worse.

UPDATED 08/08/08: More on this case here. The one defendant who did show up at trial left during a lunch break on the first day of trial and did not return.

Blogging Shades

Per the Los Angeles Police Department, a blog entry detailing a recent capture of 43,000 counterfeit sunglasses, a bust worth a cool $8.5 million.

This blog entry by the LAPD is worth noting for reasons beyond the seized sunglasses. For one, Los Angeles is a world capital of creative intellectual property, and the blog specifically states that the Anti-Piracy unit within the LAPD is one of the few operating anywhere. Also, the entry claims that the Anti-Piracy unit has a close working relationship with the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) - both headquartered in Los Angeles. This fact is not tangential - the LAPD is responding to the specific needs of its constituents in enforcing intellectual property laws. Those constituents suffer enormous harm from counterfeiting every day, while the city endures organized crime and other side effects of counterfeiting. And while the Los Angeles market is relatively small compared to the worldwide audience for counterfeits, the LAPD nevertheless devotes five detectives and one officer in its Anti-Piracy unit full time to combat intellectual property crimes such as counterfeiting.

Good for the LAPD. Now, with intellectual property a key component in the service industry that forms the backbone to the U.S. economy, perhaps other police departments across the country and even globally can emulate what the LAPD has done and start their own dedicated enforcement efforts against counterfeiting.

A Tisket, A Tasket, A Counterfeited Casket

The counterfeiters thought that their products were dead ringers for the real thing. But their products ended up bringing a lawsuit to life instead.

News out of Houston took on a macabre tone as the York Group, a Pennsylvania-based manufacturer of caskets, sought a temporary restraining order against the Wuxi Taihu Tractor Co. for sales of imitation caskets. The caskets for sale by the Chinese company mimicked the York caskets in "hardware, design lines and paintjobs." This is not the first time the York Group has tangled with this Chinese company. In 2006, the York Group brought a similar and successful suit against Wuxi Taihu Tractor Co. in which the Chinese company was ordered to stop distributing counterfeit caskets and to start putting a "Made in China" label as required by federal law for items made in China.

The article heavily quotes defendants and competitors of York in the Houston area, who disparage York's claims. Patrick Mancini, a wholesale seller of the Chinese coffins, says that he has received no complaints about the knockoff caskets from customers.

Of course, it would be difficult for many of the customers to complain.

eBay to Meet with Walpole

eBay will be sitting down with British luxury goods association the Walpole Group on July 28 to hash out possible "middle ground" solutions to the problem of counterfeiting.

Pride of Ownership

A piece in today's Financial Times of London from our own Frederick Mostert, Chairman and Co-Founder of the Authentics Foundation.

eBay vs. Tiffany Roundup

We will continue to monitor the press for impressions and interpretations of this landmark decision, but articles can be found here, here, and here.

Declan McCullagh notes that given Amazon's success in working with large sellers, eBay's strategy would have likely been different had Tiffany filed suit today.

Mark Hamblett of New York Law Journal has a particularly comprehensive analysis here.

Martin Schwimmer at The Trademark Blog posts his first impressions here.

My first impressions – It is clear that Judge Sullivan hewed closely to current trademark law.

While Tiffany attempted to argue that eBay’s direct infringement was analogous to the liability a store would incur should a store employee sell infringing items on its premises, Judge Sullivan disagreed. Judge Sullivan noted that eBay never took possession of the items sold on its website, and never directly sold counterfeit items to Tiffany buyers.

On the issue of contributory rather than direct infringement, Sullivan rejected measures proposed by Tiffany that presume trademark infringement, including a “five or more” rule that would prescribe listings of five or more Tiffany items on eBay as presumptively infringing. He instead maintained that eBay needed specific knowledge of infringement before being required to act, not a more generalized knowledge that infringement might be occurring on any class of listings. And Judge Sullivan noted that eBay took efforts to prevent repeat infringement offenders from setting up shop on eBay’s website.

Judge Sullivan seemed uncomfortable in delving into the policy arena, even if warranted. He does, in fact, imply that Congress could make policy in this arena, noting that the current law does not allow him to weigh the relative burden or efficiencies between Tiffany or eBay for policing counterfeits in eBay’s marketplace.

On the facts, Judge Sullivan noted that while eBay earned over $4 million from fees generated from the listing of Tiffany items on its website between 2000 and 2004,
eBay’s efforts to combat counterfeiting were extensive. These efforts included eBay’s Trust and Safety Department, its Fraud Engine that uses complex models to automatically searches its website for auctions violating eBay’s Terms of Service, and eBay’s Verified Rights Owner (VeRO) program that provides a mechanism for trademark owners to flag potential infringement in auctions not yet closed.

Sullivan also noted Tiffany’s relative lack of effort in policing its trademarks on eBay. Beginning in 2003, Tiffany has used a non-dedicated motley of security personnel, paralegals and temps that amounted to less than two full-time employees per month dedicated to policing Tiffany trademarks on eBay. Judge Sullivan also cited the budget outlays made by Tiffany for enforcement of its trademarks were consumed in large part by the litigation between Tiffany and eBay.

The Bottom line: Judge Sullivan maintained current American trademark precedent by ruling that trademark owners are the parties primarily responsible for policing their own trademarks.

Tiffany v. eBay Decision

Judge Sullivan rules for eBay. Developing.....

Another Wrist Slap

Some more news of enforcement against dealers of counterfeit drugs. Here, British authorities got convictions against Mr. Shabbir Hussain and Mr Mohammed Yasser Zaidi and seized just under half a million British pounds worth of counterfeit drugs.

Again, that the authorities are devoting resources to enforcement of anti-counterfeit drug laws is good news. The publicity brings attention to the problem. Unfortunately, the attention also allows the public to weigh costs and benefits of the criminal activity, and such weighing is obviously not good. Mr. Hussain did receive a four year sentence, while his co-conspirator Mr Mohammed Yasser Zaidi received a suspended sentence plus community service.

Let's take a look at drug laws in the United Kingdom.

Penalties for possession and dealing

		Possession:	Dealing:
Class A	Ecstasy, LSD, heroin, cocaine, crack, magic mushrooms, amphetamines (if prepared for injection).	Up to seven years in prison or an unlimited fine or both.	Up to life in prison or an unlimited fine or both.
Class B	Amphetamines, Methylphenidate (Ritalin), Pholcodine.	Up to five years in prison or an unlimited fine or both.	Up to 14 years in prison or an unlimited fine or both.
Class C	Cannabis, tranquilisers, some painkillers, Gamma hydroxybutyrate (GHB), Ketamine.	Up to two years in prison or an unlimited fine or both.	Up to 14 years in prison or an unlimited fine or both.

Contrast these laws in the UK for dealing narcotics with the penalties imposed against Mr. Hussain, who operated his business dealing counterfeit drugs. Four years can be a long time, particularly for someone of his age, 55. However, the penalties for counterfeit drug distribution pale in comparison with penalties for Class A and Class B drug distribution.

These laws need to be updated.

Considering that consumers who take counterfeit drugs are most often doing so without knowledge that the drugs taken could be counterfeit or dangerous, one could make a case that the pusher of counterfeit drugs needs to be punished as much as the pusher of narcotics, whose victims are at least informed about the risks they take (albeit, often influenced by addiction).

Quoting Mick Deats, Group Manager of Enforcement at the MHRA, MedicalNewsToday said,

"Counterfeit medicines are dangerous, these medicines would have found their way into high street pharmacies and onto the internet. Counterfeit medicines contain impurities, wrong ingredients and are not manufactured to the exacting standards required to safeguard public health. This is the latest in a series of successful prosecutions which should serve as a clear message to those contemplating involvement in this serious criminal activity that the MHRA is determined to take the strongest possible action against any person involved in the sale and supply of counterfeit medicines."

Mr. Deats is correct. The problem is, publicizing light punishment for lucrative enterprises could well do more harm than good.

Fake Discounts in Brooklyn

From Gawker, a story close to my Brooklyn-born heart, literally. The Brooklyn Museum has been hosting the © MURAKAMI exhibit in which Louis Vuitton handbags designed by Japanese artist Takashi Murakami appear.

The exhibit also contains a fully functional Louis Vuitton store. Now, agent provacateur Filip Noterdaeme has decided to print flyers suggesting patrons ask for special discounts on all Murakiami-designed Louis Vuitton products. The flyers are fake - there is no discount.

What does this have to do with counterfeiting? Well... the Murakami exhibit opened this spring with actors pretending to hawk counterfeit Murakami Vittuons on a mock Canal Street set. The only different was that the bags "hawked" were real.

And what does all this prove? Maybe that conceptual art is over my head.

Check out the comments for some funny snark.



(Hat Tip: Counterfeit Chic)

Enforcement Roundup

Some news from around the world in the last few days concerning police busts of counterfeit rings:

• Clothing in Australia
• Counterfeit CDs and DVDs in Ireland
• A grab bag of fake goodies in my hometown of Brooklyn, NY

Plus,

• Canal Street counterfeit scammers going mobile (hat tip: Racked)

News of this kind of enforcement is nice, of course, but with counterfeiting so pervasive, continued and increased efforts on multiple fronts will continue to be needed.

Wrist Slap

Here is a disheartening story that just came over the wire - Viraj Shah was caught with 1.8 million pounds/ over $2 million worth of counterfeit drugs in London, and received a 51 week suspended prison sentence.

Any person possessing that much counterfeit medication is likely to have considerable assets, if only to purchase and sell at his point on the supply chain. He would also likely possess at least some information relating to his supply chain, such as who bought counterfeit drugs from him and who may have sold counterfeit drugs to him. And yet, there is no talk of a fine or even any certainty of Mr. Shah serving one day in prison. And, it does not appear from the article that Mr. Shah relayed any useful information concerning his cohorts to prosecutors.

Now maybe there is information on this case that the public is not aware of yet. Perhaps this man did inform on his partners in crime sotto voce, or maybe the state's case had a fatal flaw. But there is no evidence that any deal was made - the man was prosecuted, tried, convicted and sentenced.

The dangers of counterfeit medication are manifest and well-documented. Aside from possibly being ineffective and causing indirect harm, counterfeit medicines may well contain incorrect dosages or be made out of substances like cement powder - or worse.

The goals of criminal law enforcement are to mete out justice, rehabilitate the criminal and provide disincentives for the criminal and the public to engage in similar future behavior. Given the reckless dangers involved in dealing fake meds, it is clear that the crime well exceeded the very light punishment. There is also no evidence that Mr. Shah has been rehabilitated or even feels remorse for his actions. And as far as providing disincentives, the public has now been made aware of a lucrative career with extremely limited downside. So until the state gets serious about getting tough on people like Mr. Shaw, this problem will not get better.

With this publicity, it will likely get worse.

UPDATE: The press release from the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) describes how Mr. Shah got caught (inspection of consignments at Heathrow Airport) and the sentencing process (Mr. Shah plead guilty, and will perform community service in addition to his suspended sentence).

Negative Feedback

The Financial Times weighs in today with a nuanced look at the recent French court ruling against eBay. Taking the middle road, the Financial Times argues that while eBay cannot strictly be held accountable for the actions of its users, eBay must try to do more to combat the counterfeiting threat. Such measures, the Financial Times adds, would benefit eBay as well, lest it becomes seen as merely a gallery of rogues, counterfeiters, and cheats.

Commenting specifically on one aspect of the court ruling, the Financial Times takes issue with the finding of eBay's liability for legitimate goods sold on eBay that violate exclusive distribution agreements. Leaks in the supply chain, says the Financial Times, should be the sole responsibility of the manufacturer.

eBay's European PR Offensive

PR Week reports on eBay's public relations counteroffensive in the wake of this week's legal setback in France. The article notes eBay's involvement with the Knock Off Nigel initiative, as well as its teaming with various organizations to fight online fraud (including The Authentics Foundation, which sponsors this blog and the myauthentics.com website).

Cleaning Up for the Big Show

From Industry Week, an article about Beijing's efforts to clean up counterfeiting before hosting this year's Summer Olympics. Essentially, the article implies that the Chinese Government's desire not to be embarrassed on the world stage by dodgy counterfeit operations exceeds the power of local muckety-mucks to bribe their way into lax enforcement on the local level. The implication, of course, is that the Chinese government can do more in normal times to stop counterfeiting.

eBay Verdict Roundup

Pundits and prognosticators are weighing in on the Paris' Tribunal de Commerce's verdict in which it ordered eBay to pay LVMH Möet Hennessy Louis Vuitton and sister company Christian Dior SA $63.1 million of damages relating to eBay's sales of counterfeit and unauthorized LVMH goods.

Law.com
New York Times
Time (with a focus on French internet provincialism in the wake of the LVMH decision and an earlier French court judgment against eBay in favor of Hermes).

Citing the unusually large damages, the Wall Street Journal Law Blog wonders whether the victory and staggering damages were a product of "home cooking," with a French court ruling for a French company (and against an American company).

Women's Wear Daily notes a less noticed aspect of the decision - a separate award of $4.7 million to LVMH for eBay's selling of brands Parfums Christian Dior, Kenzo Parfums, Guerlain and Parfums Givenchy through unauthorized distribution channels. The French court also ordered eBay to stop selling these brands or face a fine of $79,000 per day.

On the other hand, Richard Waters, writing in the Financial Times, says that focusing on the distribution channel aspect of the decision is an attempt by eBay to distract from the meat of the anti-counterfeiting holding. Waters also draws parallels between eBay's legal challenges in the trademark sphere and copyright challenges facing YouTube.

Meanwhile, BusinessWeek looks at the totality of the eBay ruling and speculates on whether it might be a precedent for the Tiffany v. eBay case currently being decided in New York. BusinessWeek also speculates on the effects of these cases on eBay's bottom line and business model.

BREAKING NEWS - LVMH Wins Judgment Against eBay

Luxury goods holding company LVMH, maker of luxury brands such as Louis Vuitton, wins $61 million judgment against ebay for the sale of counterfeit LVMH goods on ebay's website.

Developing.....

Counterfeiting Causes Fires

From the Electrical Safety Foundation International, a blurb about the dangers of buying counterfeit electrical appliances. Not only do counterfeiters often skimp on the safety measures included in the original product design, but who could you possibly hold responsible for a fire caused by a fake product? The original manufacturer? Probably not. Fly-by-night counterfeiters? Maybe, if you can find them. But even then, do they have the resources to withstand a lawsuit?


(Hat tip: Digital Silence)

Nuclear Silver Lining?

From Russia and the art world, news of a museum curator who has found what she terms to be a foolproof method of determining whether a painting is fake. Isotopes from exploded nuclear devices wind up back in nature in traceable amounts. Paintings use plant and mineral elements that contain traces of these isotopes. Since these isotopes are only known to be found in nuclear fallout, detection provides conclusive proof that the fakes were made after 1945.

Ingenious. Read the whole thing.

High Tech Labels to Combat Counterfeiting

Underwriters Laboratories hosted the 2008 International Law Enforcement IP Crime Conference that wrapped up today, and unveiled a new labeling technology utilizing a holograph with color-shifting ink that it says will be extremely difficult to duplicate.

Counterfeit Triangle?

The triangle region overlapping the South American countries of Argentina, Brazil and Paraguay is known for its unbridled capitalism, unlawfulness, and even more alarmingly, its rumored harboring of suspected terrorists. And with criminal activities afoot, counterfeiting is not usually far behind. Writing on Gadling.com, Jeremy Kressman describes this triangle as a “A vast bazaar of illegal weapons, counterfeit goods and illicit substances,” while IP Tango deduces the difficulty for IP owners to enforce their rights when law enforcement is weak in any particular area.

Check out both articles for a look at how criminal counterfeiters fill the void left by weak governments and lack of rule of law.

June 12 is World Day Against Child Labor

The Authentics Foundation
Partners with
CARE USA
Supporting the Global Launch of the
Pasty Collins Trust Fund Initiative
Advocacy Grants Program

Quality Education: Unlocking the Power Within
Liberated from Exploitation, Empowered to End Poverty

World Day Against Child Labor
12 June 2008

In observance of World Day Against Child Labor (WDACL), the Authentics Foundation is pleased to announce its partnership with CARE USA’s global launch of the Pasty Collins Trust Fund Initiative (PCTFI) Global Advocacy Grants Program (AGP) focused on increasing the educational attainment for girls marginalized by hazardous and exploitative child labor.

The Authentics Foundation recognizes CARE’s leadership and efforts in combating hazardous and exploitative children labor around the world and is pleased to be a part of this year’s WDACL observances. CARE is staging and participating in global observances in Indonesia, Tanzania, NW Balkans & Serbia, Togo, Ghana, Mali, Bolivia, Ecuador, Peru, Nicaragua, Honduras, Guatemala, El Salvador and the United States supporting this year’s WDACL theme “Education, the Right Response to Child Labor.”

Along with the financial support of the Authentics Foundation, CARE USA, the International Labor Organization-International Program for the Elimination of Child Labor (ILO-IPEC), and its national partners are working in tandem hosting national public awareness events around the world focusing on the importance of a quality education for children engaged in hazardous and exploitative child labor, especially girls. This advocacy initiative being launched today will give a voice to girls who are hidden, often along the margins of society quietly toiling away in isolation, never having the chance to realize the promise of an education-much less ever seeing the inside of a classroom for themselves. No longer will their voices go unheard. Central to their struggle of lifting themselves out of poverty is unlocking the power within through the provisions of a quality education.

The Authentics Foundation will be funding a four-year policy and advocacy program aimed at bring about lasting change for adolescent girl child laborers. By working towards a more conducive policy environment in favor of specific policies that liberate girls trapped by hazardous and exploitative child labor and that ensure the promise of a quality education, the Authentics Foundation envisions a world free from the exploitation of children, empowering the end of global poverty. Through specific interventions targeting sustainable change will this vision become a reality for 216 million child laborers around the world.

For more information on the Authentics Foundation, please visit www.myauthentics.com and to learn more about CARE’s efforts to eliminate hazardous and exploitative child labor please visit www.care.org and do your part by making a contribution today.

Drug Dealers are Hawking Counterfeits Too

" Police are urging people to provide more information about drug dealers in their community.

The call follows a successful recent raid on a house in Boyer Street, in which suspected crack cocaine and heroin were seized along with cash, counterfeit DVDs and jewellery.

Officers from Stockbrook Safer Neighbourhood Team and colleagues from Pear Tree targeted the property on April 28.

A man was arrested on suspicion of possession with intent to supply class A drugs and was bailed pending further inquiries.

Sergeant Matt Williamson, of the Stockbrook Safer Neighbourhood Team, said: "This demonstrates that, if we receive intelligence from the local community, we will take positive action wherever possible.

"We would urge anyone who has suspicions about drug-related activity in their neighbourhood to contact the police or Crimestoppers about it.

"We know drugs can have a detrimental affect on local areas and want to do what we can.""

Via Derby Evening Telegraph

Counterfeit Gang Exploited Workers

"Spanish police arrested five Pakistani men on suspicion of trafficking fake luxury goods and forcing people to work in illegal conditions.

Police say the gang was distributing around 2,500 fake items a day.

Clothing and accessories were made in Asia and imported to Spain to be "finished" and have fake designer labels attached. Police say the falsified brands included Burberry, Carolina Herrera and Chanel.

Police said in a statement Wednesday that the gang exploited four workers in a windowless warehouse in the southern Madrid suburb of Villaverde. The statement says the men are aged between 22 and 45 years old."


Photo Credit
Via Houston Chronicle

Danger of Fake Football Fan Gear

"Up to a fifth of the club replica shirts worn by fans at this month's Champions League, FA Cup final and Championship and League One and Two playoffs are likely to be fakes - but potentially sporting a serious or even deadly hidden danger.

Research shows a fifth of Britons buy fake goods - but one of the world's leading textile testing organisation is warning of a hidden danger in the estimated GBP500 million worth of fake football shirts that will be sold in the UK in 2008.

Manchester-based Shirley Technologies Limited (STL), which tests textiles for manufacturers worldwide, says that while the consumer's first thought is to bag a branded - if unlawful - bargain fake shirt from a market stall or online, the risk is not to the wallet, but to the health of thousands of people.

"Within days of Manchester United and Chelsea confirming their places in the Champions League final, unofficial merchandise - including shirts - was plain to see on TV coverage of fans at games on the Bank Holiday weekend," said Phil Whitaker of Shirley Technologies.

"There is no way the unofficial shirts could be fully tested in the period between the semi-finals and them first appearing. A fake sports shirt, no matter how convincing it looks, can contain a huge range of hidden dangers for the buyer and wearer - and be a death sentence for the maker.

"Only a few weeks ago, we saw the effect of an allergic reaction one woman had to underwear she bought from a high street store - and while something clearly did slip the textile testing net, it is unlikely that such a big name would buy from questionable sources.

"We test textiles and clothing for the major brands and retailers, and we know that some of the counterfeit shirts that will find their way into the possession of football fans are simply not tested for harmful content.

"A genuine branded shirt will be tested for its pH value - how much of an irritant the material can be, for harmful dyes - which may be allergenic or even carcinogenic, for extractable heavy metals - cadmium and chromium, and organo tin compounds and so on.

"That sort of content may show itself in a low profile way as a skin irritant to the wearer - or could possibly spark an allergic reaction in the worst cases.

"But as the consumer becomes more and more aware of organic and ecological issues, the key point is that the makers - and we have seen stories about illegal sweatshops on the Indian sub-continent - are exposed to a deadly chemical cocktail, all day every day, to produce uncertified and unofficial sports club merchandise.

"Many of these chemicals are shortcuts, and so too are the methods used to dispose of them as part of the manufacturing process: straight into watercourses and lakes.

"That is the extent of the hidden danger of counterfeit sports shirts," said Phil Whitaker.

(STL) is a UKAS (United Kingdom Accreditation Service) accredited laboratory providing competitive, independent, expert textile testing, certification, advisory and investigation services across the traditional and specialist textile industries.

STL is an independent subsidiary of BTTG Ltd, formerly the British Textile Technology Group. With more than 80 years experience, Shirley Technologies Ltd provides unrivalled and expert reassurance through its technical services to a global network of clients which include manufacturers, retailers, the legal profession, police, consumers and related interest groups including Trading Standards. Highly qualified and experienced technical staff work directly with clients to ensure that they receive the best advice and service in a wide range of technical areas."

Via M2 PRESSWIRE

Photo Credit

Fake Heparin Kills 19, Is Recalled

Often times, when considering the issue of fake pharmaceuticals, consumers like to believe that their own countries' stringent medical regulatory system prevent fakes from getting in their supply chain. Walt Bogdanich of the New York Times, who broke the 2007 story of counterfeit cough syrup being responsible for the deaths of 120 Panamanians, has broken a new story that should make those in the EU and America sit up straighter.

Counterfeit heparin.

Heparin is a blood thinner often used in surgery and dialysis, and this year, the United States Food and Drug Administration linked contaminated versions of the thinner to 19 deaths. After much testing, the truth came out--the heparin wasn't heparin at all, but a counterfeit attempting to mimic the effects of the real thing, with tragic results.

Bogdanich writes:
"What a difference a year makes.

After many near misses and warning signs, the heparin scare has eliminated any doubt that, here and abroad, regulatory agencies overseeing the safety of medicine are overwhelmed in a global economy where supply chains are long and opaque, and often involve many manufacturers.

“In the 1990s governments were all about trying to maximize the volume of international trade,” said Moisés Naím, editor in chief of Foreign Policy magazine and author of “Illicit: How Smugglers, Traffickers and Copycats Are Hijacking the Global Economy.” “I’m all for that, but I believe this decade is going to be about maximizing the quality of that trade, not quantity.”

Mr. Naím said the heparin scare is already having a “huge” impact, fueling worldwide anxiety over imported medicine and a growing demand for consumer protection."

In addition to the Times article, Sue Hughes of Medscape writes that 350 adverse reactions to Baxter (the company which produces the heparin) products have been reported, with at least 40% considered serious.

Read the full New York Times article here

FDA Recalls Heparin

For questions contact Baxter Inc.

Bad Drugs at a Pharmacy Near You





Photo Credit

Mayor Bloomberg Orders Counterfeit Triangle Closed

Those who believe Canal Street's abundance of counterfeits are a permanent fixture may be surprised to learn that the infamous "Counterfeit Triangle" has been disbanded, as 32 shops were ordered shut last Tuesday in a series of major civil lawsuits. Mayor Michael Bloomberg noted that the operation was one of his "biggest takedowns ever," calling the profits from counterfeiting "easy and sleazy."

After an undercover investigation spanning 40 shopping sprees, over $1 million in counterfeit goods were seized.

“Whoever you are, wherever you are, we are going to shut you down,” Mayor Bloomberg said at a news conference in the main hall of a mall on Canal St which housed some of the alleged offenders. Speaking among clear plastic bags chock full of hundreds of the confiscated counterfeits, Mr. Bloomberg spoke of money laundering and bloody gang wars over prime counterfeiting turf.

"It is organized crime," he said of counterfeiting--which saps $1 billion in taxes from Manhattan per year.

To read more about the takedown, visit the NYT "City Agents Shut Down 32 Vendors of Fake Items."

In the future, UK web pirates may be banned from net

Britons who illegally download mp3s or movies may have their internet rights revoked if legislative proposals introduced this week are passed. The new laws would require ISPs, or Internet Service Providers, to take legal action against any users known to be downloading, The Times of London reports.

The proposed policy follows the "three strikes you're out" mantra; Net users would be given a warning for the initial offense, a suspension of their contract for the second, and a compelet dissolution of their internet contract on the third illegal download. The government is also considering taking legal action against any ISPs who don't adhere to this policy.

With a piracy market reaching over 21.6 Billion GBP per year, talks between ISPs, the government, and the record industry have been ensuing for years.

“We welcome the signal from Government that it values the health of the creative industries and takes seriously the damage caused by widespread online copyright infringement," says
Roz Groome, vice-president of anti piracy for NBC Universal. "We call upon ISPs to take action now. They must play their part in the fight against online piracy and work with rights owners to ensure that ISPs’ customers do not use their services for illegal activity. Piracy stifles innovation and threatens the long term health of our industry.”

Personally, we feel there are so many innovative legal ways to get your music we don't see the point of risking it by going the other way. Free sites like Musicovery or Pandora allow users to create innovative playlists based on mood, song/artist preference, or even tempo. And companies such as eMusic sell records long since out of rotation, many of which are so obscure iTunes doesn't carry them. Even the structure of the record industry is changing, with the guys at Engadget and Downtown records launching Rcrd Lbl, an online resource that gives you the music free while still offering payment to the artists.

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