Is this good news for American manufacturing? According to an article in today’s WWD, a federal crackdown on counterfeit imports could be driving an increase
in US domestic output of fake merchandise.
Apparently the New York Police
Department conducted a raid Monday of a commercial building in the College Point
section of Queens which resulted in 13 arrests and the seizure of an
estimated $4 million in counterfeit apparel. There were logos of brands
such as The North Face, Polo, Lacoste, Rocawear, Seven For All Mankind
and Fubu. The raid also uncovered tags, buttons and labels
of brands such as Apple Bottoms, Baby Phat, Tommy Hilfiger, Nike,
Adidas and Enyce.
While the seizure of three tractor trailers
worth of counterfeit merchandise was significant in itself, more so was the
discovery that the location was being used as a finishing facility for
fake goods. This has has raised new concerns that counterfeiters may be
shifting their tactics in an effort to circumvent U.S. Customs. Four embroidery machines, each
capable of putting trademarked logos on up to 18 garments at a time were also found during the raid.
The alleged leaders of the ring, Jung-Ho Ryu and
his wife, Ji Young, were arrested Monday and are accused of importing
blank shirts, jackets and jeans — primarily made in China — and then
finishing the goods with trademarked embroideries, buttons and labels.
A spokesman for the NYPD said the Ryus and their workers will face
charges ranging from felony trademark counterfeiting to criminal
possession of forged instruments.
Finishing goods in the U.S.
to avoid Customs seizures isn’t a new strategy for counterfeiters, but
it’s one some private investigators and intellectual property lawyers
are beginning to see more frequently.
an intellectual property lawyer and partner with Dreier LLP in New
York, acknowledged that finding finishing facilities was "not an
everyday occurrence," but said he has regularly run into it during his
years of practice. He also doesn’t necessarily believe there is a wholesale shift in tactics among counterfeiters going on. "I think it’s always been there….There’s always been an illegal element that would invest in the machines," he said.
Gursky does believe it’s easier to import
the blanks and it doesn’t take skilled labor to run the machines. Gursky also noted an
economic downturn could spur legitimate businesses to run a night shift
on their machines that handle counterfeit goods, or a legitimate
business may go under and have to liquidate its assets, forcing the
firm to sell its machines at low prices.