Counterfeits Infiltrate The Military, Government Takes Charge

At a press conference last month, U.S. Senate Armed Services Committee Chairman Carl Levin reported that counterfeits had infiltrated the Pentagon’s supply chain. According to TTIINC.com, this includes microprocessors for fighter jets and microcircuits for Missile Defense Agency hardware. A new bill was proposed to target “malicious offenders– those who already are guilty of trafficking in counterfeit goods and know that they are selling military counterfeits.” It is supported by three major groups: the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Semiconductor Industry Association.

In response to counterfeits the Interagency Task Force on Electronics Stewardship released a report detailing the necessary steps the government needs to take in order to monitor the management of electronics more carefully. These four goals are listed in the report:

1. Build Incentives for Design of Greener Electronics, and Enhance Science, Research and Technology Development in the United States (e.g., launch prize competitions to stimulate innovations in green product design, recycling solutions, and other phases of the electronics lifecycle).
2. Ensure that the Federal Government Leads by Example (e.g., encourage electronics manufacturers to expand their product take-back programs, and use certified recyclers as a minimum standard in those programs, by expanding the use of manufacturer take-back agreements in Federal electronics purchase, rental and service contracts).
3. Reduce Harm from US Exports of E-Waste and Improve Safe Handling of Used Electronics in Developing Countries (e.g., support ratification of the Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes and their Disposal and provide technical assistance and establish partnerships with developing countries to better manage used electronic equipment).
4. Increase Safe and Effective Management and Handling of Used Electronics in the United States (e.g., launch voluntary partnerships with the electronics industry and provide guidance to electronics recycling employers).

These are all great goals as well as necessary steps in order to improve the management of electronics and stop counterfeits from getting into the supply chain. Bloomberg even joined with several top agencies last month in “Operation Chain Reaction” to intercept counterfeit military parts sold to the government. Counterfeit electronics are dangerous. Whether it be fake batteries, curling irons, cell phones or computer chips, they all can be faulty and some have the potential to explode. Make sure you purchase products from reputable retailers and trusted websites.

Round up: This Week In Anti-Counterfeiting

The week started off with the hearing for the IDPPPA (ID3PA). Witnesses included Lazaro Hernandez, designer for Proenza Schouler, Jeannie Suk, Professor of Law at Harvard Law School, Christopher Sprigman, Professor of Law at the University of Virginia Law and finally Kurt Courtney, Manager of government relations at the American Apparel & Footwear Association.

Memorable quotes during the hearing included:

• “We are helpless against copyist who prey on our ideas. Fashion design is intellectual property that deserves protection.” -Lazaro Hernandez
•  ”We need to stop knockoffs which directly undermine the market for the original designs.” -Jeannie Suk
•  ”[The IDPPPA] contains protections to ensure designers can seek inspiration & harness fashion trends w/out frivolous lawsuits.” -Kurt Courtney

Later in the week, the fortunate ones who were fast enough to scoop up a CFDA/eBay “Can’t Fake Fashion” tote posted on their blogs about their one-of-a-kind purchase. The lucky ones include: BryanBoy, Chi City Fashion and Founder of e Drop-Off, Corri McFadden. Some bought the simple tote and designed it themselves. Check one out here.

No matter what designers do, Forever21 seems to keeps copying their products. Feral Childe is the newest victim of Forever21 and this week it was announced that they are suing the retail giant for copyright-infringement.

For more news on counterfeits and luxury fashion, follow us on Twitter and Facebook!

The CFDA and eBay Agree, “You Can’t Fake Fashion”

On Monday the CFDA and eBay launched the anti-counterfeiting campaign, “You Can’t Fake Fashion.” The two are collaborating to raise awareness against counterfeit goods and celebrate original design within the fashion industry. eBay and the CFDA produced a collection of 50 exclusive totes customized directly by America’s foremost designers and sold exclusively on eBay. All proceeds benefited the CFDA Foundation.

The one of a kind bags sold for $150 and were sold out in a matter of hours. Designers included Phillip Lim, Anna Sui, Calvin Klein, Catherine Malandrino, Coach, Diane Von Furstenberg, Donna Karan, Judith Leiber, Narciso Rodriguez, Peter Som, Rachel Roy, Rodarte, Tory Burch and Vivienne Tam just to name a few. We know BryanBoy snagged the Peter Som original.

Here is a great video of all the participating designers talking about counterfeiting; how it impacts the economy as well as fashion:

This is a great awareness campaign for American designers. The CFDA has been making great strides against counterfeiting recently. We look forward to seeing what’s next!

A Closer Look Into The “Art” Of Faking It

It’s no secret that it is becoming incredibly difficult to spot a fake. With counterfeiters using real leather, impressive logos and similar stitching, you’re going to have to really know the product in order to know if it is authentic or not. Last week Elizabeth Holmes of the Wall Street Journal interviewed key players in the fight against counterfeit fashion and what they are doing to stop fakes. Tom Onda, Chief Intellectual Property Counsel at Levi Strauss & Co. was quoted saying, “Online sales of counterfeit goods make fighting back a much more complex task than it used to be… trying to monitor the Internet is a Herculean task.”

Makers of counterfeit goods are getting ever more sophisticated with the quality of their copies. Portero Accessories Director Elizabeth Bernstein spoke with the Wall Street Journal about how to spot fakes in a video online:

With so many websites selling counterfeits popping up on the internet daily, it is hard to keep track of them and shut them down. As a consumer, the best thing you can do is to educate yourself. Check out these great tips the Wall Street Journal gives on how to spot a “good fake:”

• Buy directly from the brand. A sure-fire way to buy an authentic product is to purchase a new item at the brand’s own boutique.
• Find an authorized retailer. If you cannot buy something from the brand directly, ask for a list of its approved sellers. Department store chains, such as Saks Fifth Avenue and Neiman Marcus, are reputable points of sale as well.
• Check the authenticity policy when buying second hand. If buying a used luxury item from a website or a consignment store, carefully read or ask for its sales policy. Make sure the seller guarantees its products’ authenticity.
• Be wary of discounts. Top luxury brands rarely offer deep price cuts on their merchandise. Be suspicious if a luxury item is marked more than 25% off the retail price.
• Scrutinize websites selling the product. Counterfeiters have gotten more sophisticated in selling goods online. Examine the website for its validity, including product images—and price points. Another clue: often times the Frequently Asked Questions area contains grammatical errors.

Don’t be duped!  Go to www.fakesareneverinfashion.com for more information on how to spot a fake.

Fake Cosmetics Seized From Philly Flea Market

A FBI investigation into fake cosmetics lead agents to Rice’s Flea Market in Philadelphia this week. Local police and customs officials were present as they raided booths at the market and seized boxes of counterfeit cosmetics. All vendors are told that they are not allowed to sell counterfeits, but some decided to take the risk. Unfortunately those selling the counterfeit cosmetics were not arrested that day, only given a slap on the wrist. Fake beauty products from cosmetics to fragrances can contain harmful bacteria, toxins and even anti-freeze. It is not uncommon for consumers to have severe allergic reactions to these types of counterfeits.

“It’s potentially dangerous, and I know a couple stories of people who’ve gotten rashes from putting counterfeit perfumes on,” said one vendor, Vicki Cychowski. “The colors of the boxes are different and, a lot of the time, you can tell the color of the liquid is the wrong color,” she said.

The best way to spot fake products is to do your homework. Know what the packaging looks like. Should it have a shiny or matte finish? How is the logo placed? Are the products supposed to be named or numbered? Did the brand even make a color with that name? These are all question you should ask yourself when shopping for cosmetics at locations other than the brand’s official stores. Of course the easiest way to steer clear of fakes would be to shop directly from the brand or it’s trusted retailers every time.

This Week In IP: The CFDA Goes to Washington & Counterfeit Military Parts

This week has been a busy one in the fight against counterfeits. CFDA President, Diane Von Furstenberg and CFDA Executive Director, Steven Kolb took a trip to Washington to speak to Congress about the importance of design protection. (The Senate Judiciary Committee unanimously passed the Innovative Design Protection and Piracy Prevention Act in December). Steven Kolb posted to twitter as Furstenberg spoke to legislators: “We need to value creativity. Not having protection is embarrassing — @dvf.”

(Image From Steven Kolb’s Tumblr of Furstenberg, Kolb & Rep. Nancy Pelosi)

Another big story to hit the press this week was the probe into counterfeit military parts that have been sold to the Unites States government from China. The Senate Armed Services committee began to investigate counterfeits in March, but the Chinese have refused to provide Visas to investigators trying to locate the source of the counterfeits. According to a recent article on Bloomberg.com, the DCIS also is investigating over 200 allegations of substandard or non-conforming parts that do not meet military specifications. Senate Armed Services Chairman Carl Levin and Arizona Senator John McCain sent letters to the Chinese consulate in Washington to request the visas, but Chinese officials had asked them to postpone the investigators’ trip.

Tory Burch: A Big Win for Fashion in the Fight Against Fakes

Today was a big win in the fight against fake designer products. Initially reported by WWD, Tory Burch has won a $164 million lawsuit against over 230 websites who have been cybersquatting and selling counterfeit Tory Burch products online. The term cybersquatting refers to a website who uses a designer or brand’s name in the domain name (URL) in order to deceive shoppers into believing their site sells legitimate merchandise.

Burch spoke out against fakes to Women’s Wear Daily saying, “Many people think that buying a fake product is harmless, but counterfeiting is estimated to result in annual losses of over $20 billion to American companies.”

And that is just in the United States. Counterfeiting is a global problem that effects more than just corporations, brands and designers. Besides contributing to criminal acts, counterfeits deprive jobs from hard working citizens as well as contribute to down economies.

Key numbers to know:

• Estimated $600 Billion annual sales in counterfeit products worldwide
• $512 Billion global sales lost to counterfeit goods
• $1 Billion estimated annual loss in New York City tax revenues due to counterfeiting
• 750,000 jobs lost due to intellectual property theft in the United States

It could be seen this morning that the fight against fakes is only going to get stronger. Executive Director of the CFDA, Steven Kolb, who was also quoted in the WWD article, tweeted this morning:

@StevenKolb  “#fightBack. Major. Good job @toryburch! in winning $164M cybersquatting Suit – WWD.com http://t.co/jFlogxT @womensweardaily.”

To which Burch responded: @ToryBurch “Just starting!”

Round up: A Week In Anti-Counterfeiting

This week in the fight against counterfeiting led to multiple arrests, seizures and partnerships:

• Atlantic City, New Jersey law enforcement seized $150,000 worth of counterfeit merchandise from boutiques along the Atlantic City boardwalk. A total of 3,530 purses, wallets, clutches, bags, belts, shoes, scarves, belt buckles, jewelry, watches and leather goods also were seized. Via Press of Atlantic City.

 

• Unilever announced it has pledged to support National Agency for Food Drugs Administration and Control (NAFDAC) in the fight against counterfeit products in the Nigerian market. Via Business Day.

 

• Police arrested and charged a man for unlawful use of unidentified sound recordings. 3,100 illegal DVDs valued at $7,800 were recovered. Via Plainfield Blotter.

 

• Counterfeit alcohol served on a cruise in Turkey led to the hospitalization of 30 Russian tour guides and one killed. Doctors said the poisoning was from highly toxic methanol, or methyl alcohol. Via Bloomberg News.

 

• The Kenya Anti-Counterfeit Agency asked the Kenyan government for more funds this week to up its staff and intensify research, which would help deal with counterfeit cases and thwart counterfeiters in Kenya. Via The Standard.

 

• Toyota in Nigeria launched an anti-counterfeiting campaign against fake automobile parts. Counterfeit spare parts could result in short life span of engines due to wear, frequent visits to a mechanic, high maintenance costs and unguaranteed safety and security of the vehicle. Via PM News.

 

Protect IP Act: Will It Pass?

The Senate Judiciary Committee is voting on the Protect IP Act today, but will it pass? Outlined in the latest FANIF blog post, Senator Patrick Leahy reintroduced Protect IP about two weeks ago. Leahy is confident the bill will pass as AdWeek reports 12 of the committee’s 18 members are co-sponsors of the legislation.

Supporters of the bill include Microsoft, whose counsel Brad Smith, speaks out about their support of the potential new law on their blog:

“Microsoft is a company built on innovation and its protection through intellectual property rights, and we are committed to helping ensure that copyright is respected in the online environment. We look forward to working with others as this bill advances toward enactment.”

Since the beginning of the reinstated bill, Google has been very vocal about not backing the legislation. Google’s executive chairman, Eric Schmidt, spoke out saying the bill could set a “disastrous precedent” for freedom of speech. “I would be very, very careful if I were a government about arbitrarily [implementing] simple solutions to complex problems,” he said. “So, ‘let’s whack off the DNS’ (domain name systems). Okay, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.”

Twitter is a buzz about the bill tweeting with hashtag #ProtectIP:

“@UnderBill Censorship: the slipperiest slope? #protectip“
“@marauderz I feel that Google is contesting the #protectip act because it can endanger Google Music.”
“@FashionCloture How will Google’s opposition affect #ProtectIP Act?
“@PRGPatentLaw@neverfakes @FashionCloture People seem to be nervous about any government authority to shut down websites, even sites with illegal content.”
“@SimoneBtrfly It’s fab the amount of support they’re getting!”

We are interested in the outcome of the vote today and its opposition’s efforts to stop the legislation.

Say Hello To The “PROTECT IP” Act

(Image Taken From Wired.com)

Last week Senator Leahy introduced his revision to the controversial Combating Online Infringement and Counterfeits Act (COICA). The bill now stands in its new form, the PROTECT IP Act, short for “Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property.” According to Wired.com, “under the new proposal, search engines, internet providers, credit card companies, and ad networks would all have cut off access to foreign “rogue sites”– and such court orders would not be limited to the government. Private rightsholders could go to court and target foreign domains, too.”

What we are most particularly interested in is the effect on search engines, such as our previous discussions surrounding Google AdWords. The PROTECT IP Act  “responds to concerns raised that search engines are part of the ecosystem that directs Internet user traffic and therefore should be part of the solution.” We agree, Google must help in being part of the solution.

Some key points of the PROTECT IP Act via Wired:

• The bill is an attempt to deal with foreign sites which can be difficult for US enforcement to reach.
• It does provide a more limited definition of sites “dedicated to infringing activities.”
• Ad networks and payment processors will be protected if they “voluntarily cease doing business with infringing websites, outside of any court ordered action.”
• Copyright and trademark holders are allowed to seek court orders directly, though these orders would only apply to payment processors and advertising networks (not to ISPs or search engines).
• A search engine can simply cut off advertising for that reason and be immunized under the law.
• Encourages everyone—domain name registries, search engines, payment processors, and ad networks—to cut off access to infringing sites that “endanger the public health.” That is, online pharmacies (which are often hotbeds of counterfeiting).

What are your thoughts on the new bill? Do you think it will further the government’s attempts to take down foreign rouge websites selling counterfeits?