Posts Tagged: "counterfeiting"

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.

The United States Patent and Trademark Office (USPTO) will host the 2011 National Trademark Expo on Friday, October 14th, and Saturday, October 15th, at the USPTO’s headquarters in Alexandria, Virginia. The free two-day event is designed to educate the public about the value of trademarks in the global marketplace. If you have young children and are looking for something exceptionally fun, and free, I highly recommend the Trademark Expo. While there are seminars aimed at adults, which are quite good, children will have a blast because costumed characters will be walking about and mugging for photos with children, families and adults too!

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.

Counterfeiting is a far bigger story than loses to big companies and the associated loss of downstream economic activity. Those that support counterfeiters by buying knock-off goods are also increasingly supporting organized crime, including drug cartels, who are increasingly looking to the generous profits that can be earned and exceptionally low jail terms even if they do get caught. In fact, the largest Italian organized crime group is estimated to receive 10% of its annual $25 billion from counterfeited and pirated goods.

Criminals 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 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. In fact, one of the most vicious drug cartels in the world makes an estimated $2.4 million per day selling counterfeit software.

The China Road Show is a series of two-day China IP events that the USPTO is hosting across the country to help educate businesses about the realities of piracy and counterfeiting—which cost the American economy approximately $250 billion annually. Day 1 is largely devoted to understanding the patent, trademark and copyright laws in China, as well as enforcement of those rights. Day 2 of the seminar will address § 337 Infringement Investigations by the International Trade Commission (ITC), the challenges presented by counterfeiting and piracy on the Internet and the development of global IP strategies even for small businesses.

It is unfortunate for businesses, but China is becoming practically synonymous with intellectual property theft, piracy and counterfeiting. On top of that, many technology companies are learning that doing licensing deals with the Chinese means they turn over the technologies and as soon as the Chinese corporation is capable of employing the technology the sever the relationship and then compete against American companies with American technology, they just don’t have to recoup the research and development costs and they have a cheap labor force.

We shouldn’t fool ourselves and try and pretend that the lack of respect for intellectual property rights is limited to those who seek to share movies, music or make a buck selling knock-off products. Everyone who produces original content on the Internet is at risk of having that content stolen; simply cut and pasted onto some other website or blog. Even if it is not passed off as original content and you do get “credit” the copyist is using your work for their own benefit. They are stealing eyeballs, diverting traffic and likely costing you money. At the very least, they are free riding, which is a hard pill to swallow.

As explained by the Organisation for Economic Co-Operation and Development in a draft report draft report: “The overall degree to which products are being counterfeited and pirated is unknown and there do not appear to be any methodologies which could be employed to develop an acceptable overall estimate.” The OECD draft report goes on to explain that based on best estimates that international trade in counterfeit and pirated goods could well have accounted for up to US$ 200 billion in 2005, but that figure does not tell the entire story. This $200 billion figure does not include counterfeit and pirated products that are produced and consumed domestically, nor does it include the significant volume of pirated digital products distributed via the Internet.

For 2010 the US Trade Representative reviewed 77 trading partners for this year’s Special 301 Report, and placed 41 countries on either the Priority Watch List, Watch List, or the Section 306 monitoring list. The Priority Watch List for 2010 names the following countries:China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Pakistan, Thailand and Venezuela.