Do You Buy Counterfeit Products? What Your Money Is Supporting May Shock You. Second City Style Fashion Blog

October 10, 2006 • Magazine


By Teresa McUsic, Dallas Star-Telegram

Counterfeit goods have morphed beyond knockoff Prada handbags or Nike T-shirts peddled on street corners.

The manufacturing and selling of fake goods has become a $650
billion-a-year business worldwide and makes up 7 percent of world
trade, according to the International Chamber of Commerce. In addition
to brand-name clothing, counterfeit goods have expanded dramatically to
software, DVDs, music CDs, pharmaceuticals and auto parts.

"Anything made by man is being counterfeited," said Edward Kelly, a
partner with Tilleke & Gibbins International, a law firm
specializing in intellectual property rights.

Kelly spoke in Dallas this week at a conference sponsored by the
International AntiCounterfeiting Coalition. In his presentation, "Blood
Money: The Steep Human Cost of the Counterfeit Culture," Kelly
discussed how consumers help criminals when they purchase counterfeit

"Consumers have a role in this," he said. "If we shun goods that are
counterfeit, it will have much more of an impact than [efforts to shut
counterfeiters down] on the supply side."

Kelly, who has been based in Thailand since 1999, said he has staged
numerous raids and confiscated counterfeit goods for his clients. In one raid, his team confiscated 105,000 cartons of Marlboro cigarettes for Philip Morris. "There were 10 Chinese workers chained to the machines," he said.

Working conditions are often deplorable in the operations and include child laborers, he said. Even though the legal age of employment is 15 in Thailand, Kelly
said he has seen many younger children working in factories there.
Counterfeiters are often involved in drug trafficking, prostitution and
even terrorist activities, Kelly said. "Consumers can vote with their dollars every time they make a purchasing decision."

This year, the federal government passed the Stop Counterfeiting in
Manufactured Goods Act, which adds mandatory forfeiture, destruction
and restitution provisions to the criminal statute already on the
books. Those caught counterfeiting can receive prison terms of up to 20
years and fines of up to $15 million.

IACC President Nils Montan said the new law is an improvement but
enforcement is a problem. "We are facing the most powerful and
well-financed criminals in the history of the world," he said. But
"unless you have the willpower of the government to enforce the laws,
the laws just kind of sit there."

"The problem of global counterfeiting and piracy has far-reaching
consequences and must be reined in," said ICC Chairman Marcus
Wallenberg in a statement after the summit. "Organized crime networks
are fueled by it while consumers are put at risk, jobs are lost, and
government and business revenues are undercut."

Counterfeit goods can be found in many areas, with about 1 in 4
coming from home operations, according to the ICC. Mobile operations,
including street vendors, flea markets and auctions, account for 20
percent of knockoff sales. An estimated 14 percent of the sales are
made over the Internet.

Seizure of counterfeit goods at the U.S. borders has more than
doubled since 2000 to $93.2 million in more than 8,000 incidents in
2005, according to U.S. Customs and Border Protection.

However, the amount found is just a drop in the bucket compared with
the amount being brought into the country and sold, Kelly said.

Top 5 Counterfeited Brands:

1. Louis Vuitton
2. Nike
3. Microsoft
4. Gucci
5. Prada

SOURCE: International Chamber of Commerce

Ways To Spot a Fake:

Price. Do some research, and find the usual sales price range. Most designer knockoffs are sold way below regular prices.

Retail location. Authentic brands are not generally sold at
flea markets, mall kiosks, auction Web sites, "purse parties" or
neighborhood markets like Chinatown in New York or Santee Alley in Los
Angeles. If you buy in these places, your risk of being defrauded is

Packaging. If the shrink-wrap on the product is loose and sloppy, the product likely is not authentic.

Spelling. Check the front and back for misspellings. For
example, some knockoff items spell Calvin Klein as Calvin Kline. If you
see a misspelling, it’s fake.

Sales tax and credit cards. If the vendor does not charge a
sales tax, it’s an illegal transaction. Not accepting credit cards can
also signal a counterfeit operation.

Assembly required. If the vendor asks you to choose the type
of logo or brand name to place on a product, the vendor does not have a
legal right to it.

SOURCE: The International AntiCounterfeiting Coalition

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