Posts Tagged: "counterfeit"

Near the end of her presentation Bartow asked a particularly enlightening question. If China can crackdown so thoroughly on its citizens why couldn’t they crackdown on intellectual property infringement and IP crimes? She explained: “Because it isn’t in their interest.” Bartow explained that in the Chinese view it doesn’t make sense to change their view of intellectual property rights because so many within the country are becoming wealthy as a direct result of widespread intellectual property infringement. Bartow ended by saying that as long as this is the view of intellectual property it will be difficult to attract the companies that they really want to attract.

It’s amazing how fast a successful product is counterfeited and how brazen the copying is. The figure above illustrates what counterfeiting looks like. Counterfeiters copy everything….except price and quality. They copy the shape, the color, and the style of the product. They copy the images straight from your Kickstarter campaign. They copy the packaging you designed and the name you developed. They cut your price anywhere from 10% to 1,000%. Their quality is at best sub-standard and at worst dangerously defective. I’ve personally purchased counterfeits that have broken on first use and I’ve read reports of counterfeits catching on fire when plugged in.

Over 850 delegates from more than 100 countries are attending the three-day meeting from 24 to 26 April that is being chaired by the World Customs Organization (WCO) and hosted by Turkish Customs with the support of the Union of Chambers and Commodity Exchanges of Turkey. United around a common goal to stop the trade in counterfeit and pirated products, the organizers and participants aim to share experiences and devise strategies to counteract this global phenomenon and the harm these goods can have on consumer health and safety, as well as intellectual property rights (IPR).

This should have been an open and shut case. But then Costco decided to aggressively defend what seems indefensible. Costco is basing its defense on the belief that the “[t]he word Tiffany is a generic term for ring settings comprising multiple slender prongs extending upward from a base to hold a single gemstone.” See opening paragraph of the Costco Answer and Counterclaim. In support of this position Costco submitted dictionary definitions, pages from Wedding Planning for Dummies discussing rings, online articles (such as from About.com), online sales pages (such as from Amazon.com) and other materials.

The dispute between Tiffany and Costco first came to light in November 2012 when a customer alerted Tiffany to the sale of what was promoted on in-store signs as “Tiffany” diamond engagement rings at a Costco store in Huntington Beach, California. Tiffany immediately launched an investigation, and later learned that for many years, and without Tiffany’s knowledge, Costco had apparently been selling different styles of rings that it has falsely identified on in-store signage as “Tiffany.” The rings are not in fact Tiffany rings, nor are they manufactured by, approved by, licensed by, or otherwise in any way properly associated with Tiffany.

Crocs, Inc. (NASDAQ: CROX) announced earlier today that Chinese courts have sentenced 18 individuals to a total of more than 46 years in prison for producing and selling counterfeit Crocs goods. Seventeen individuals were convicted of counterfeiting, and two of the 17 also were convicted of offering bribes. Another individual also was convicted on bribery charges in connection with production of counterfeit Crocs™ shoes. In addition to prison sentences, the above men together face fines totaling RMB 2,832,500 (approximately $450,896).

Speck Products has obtained a judgment from a California Federal Court against Tsai & Shaw, a company that has been selling counterfeit Speck iPhone cases. The judgment includes a permanent injunction against Tsai & Shaw, as well as an award for the damages. The case against Tsai & Shaw is just one of the several judgments in the last year that equals over $1.2 million in damages against Tsai & Shaw and other counterfeiters.

The white paper outlines just how these counterfeit parts are entering the global supply chains. Even though there are government regulations and precautionary measures taken by the industry, there seems to be a growing problem with counterfeit parts that can cause damage and even fatalities. The introduction of the whitepaper claims: “The complex and distributed nature of supply chains has created vulnerabilities for companies and organizations. Governments and regulations can only go so far. As such, industry can benefit from taking a more proactive approach to protecting the supply chain from counterfeit products and pirated materials.”

Counterfeiting is now one of the fastest growing and profitable industries in the world. With an average of 5 – 7% of the world trade market, it is a $600 billion per year industry. The U.S. Customs and Border Protection (CBP) reports the total number of counterfeit goods increased dramatically in FY 2011 by 24% compared to the prior year, and has increased 325% over the past decade. The impact and cost across industries is quite staggering. The Federal Trade Commission reported that counterfeit automotive parts total approximately $12 billion and also result in 200,000 fewer manufacturing jobs. Additionally, electronics industry experts stated a loss of between $100 billion and $200 billion annually. Of particular concern is the pharmaceutical industry, which counterfeit drugs account for $75 billion dollars globally.

According to the FTC, coupons are a big business.  There are more than 3,000 manufacturers that annually distribute nearly 330 billion coupons that are worth an estimated $280 billion. With this type of marketplace it is easy to understand why opportunistic criminals would be interested in the industry, particularly given the economic plight of the moment caused by the Great Recession, which we cannot seem to escape.  Tough times cause people to be more cost conscious, but this also provides the perfect cover for con artists and scammers.  

Criminals on all levels — from opportunistic, small-time thieves to major drug cartels — are finding that the penalties for intellectual property crimes pale in comparison to the penalties they would receive for trafficking drugs and engaging in other illicit activities. At the same time, the profit margin for counterfeit software, as well as for other counterfeit goods, is extremely high. So the combination of great riches, relatively low penalties and a low likelihood of being caught and you can see why criminal enterprises, including terrorist networks, are becoming major players in the counterfeit software black-market.

The posting says that the purchaser will acquire a version of the course that was first purchased in March 2012 and includes 36 audio CDs, 8 video DVDs and Patware 9.0.  That is simply not possible because by March 2012 the courses being sold did not include any of this.  John White and I updated the course at the beginning of 2011 to take into account the then newly tested material, which included KSR rationales and guidelines, Bilski guidelines and the 112 guidelines.  At this time in the beginning of 2011 audio CDs and DVDs ceased to be provided, and Patware was no longer available in disk form. The last version of Patware on disk was indeed Patware 9.0, but that did not include any questions on KSR, Bilski or the 112 guidelines.  Simply stated, a course that included audio CDs, DVDs and Patware on disk had to have been purchased at the very beginning of 2011 or earlier.  The claims in this ad are simply false.

Changes were made in the copyright laws of the United States in order to ensure that what David LaMacchia did would be criminal in the future. Nevertheless, those changes to the copyright laws did not put an end to piracy on the Internet, nor could they have been realistically expected to do so. Corporations, entrepreneurs, artists and creators have lobbied the United States Congress for changes in the law to help them protect their copyrighted works, but they have also increasingly relied upon technological measures to protect their copyrighted works. While there is no legal requirement that a copyright holder take steps to secure or sequester material in order to avail themselves of the protection offered by U.S. copyright laws, there is no prohibition against copyright owners seeking to use technological means to preserve their rights. Prudence dictates content creators continually monitor to see if there is ongoing infringement, take steps to make such infringement more difficut and do whatever can be done to address infringement when (not if) it is discovered.