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.
Thursday, August 21, 2008
Tuesday, August 19, 2008
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 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.
It would be a painful lesson to learn firsthand, but fake sports cars can be real death traps.
Monday, August 18, 2008
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.
Friday, August 15, 2008
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).
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.
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.
Wednesday, August 13, 2008
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.....
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.
Monday, August 11, 2008
Sunday, August 10, 2008
Gold Medal Counterfeiters
Even with increased law enforcement, knock-off shops flourish at the Beijing Olympics.
UPDATE: Counterfeiting the Nazi Olympics.
UPDATE: Counterfeiting the Nazi Olympics.
Saturday, August 9, 2008
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.
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.
Friday, August 8, 2008
Counterfeiting May Be a Crime!
Courtesy of Counterfeit Chic, a billboard on the eve of the Olympics in Beijing.
'Hey, it's a start."
'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.
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.
Thursday, August 7, 2008
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.
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.
Wednesday, August 6, 2008
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.
UPDATED: Callaway provides tips to avoid fakes, with TaylorMade adding their own advice here.
Tuesday, August 5, 2008
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."Read the whole thing.
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.
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.
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.
Friday, August 1, 2008
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.
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.
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