How to fight the fake trade with limited resources? The Milwaukee Police Department and Nike may have an answer.

February 3, 2010 § Leave a comment

When the topic of counterfeiting is brought up in law enforcement offices across the country and around the world, one of the first questions that senior staff has to ask is whether or not they have the resources to fight the problem.

In a cheerless economy, the effort to find funding for the fight against fakes is like sending a pig out to hunt truffles in the forest with its snoot stuffed full of fabric softener sheets that were dipped in gasoline.

In this environment, you have to be smart about your resources.

What’s the better choice, do you go after the big takedowns of the distribution operations that grab headlines or do you arrest the local counterfeit vendors? A case can be made for either one. Knocking around the small vendors disrupts the money flow to the sham overlords, and the bigger busts can discourage the entire counterfeit industry.

Either way, without the funds to pursue the full spectrum of enforcement, it’s not easy to know the best course of action. But, just as the criminals are innovative, enforcement efforts are evolving too.

A recent joint effort by Nike and the Milwaukee, WI police force may have given us a workable solution.

Working together in an ongoing operation, the police department and federal agents have been performing controlled buys of fake Nike goods from local merchants using marked bills and confidential informants. Their efforts have produced several arrests and seizures .

With annual revenues of around $19 billion, you have to wonder why Nike would get involved in a smaller campaign in the first place. Is this the best uses of scarce resources?

Two factors motivated the effort. First off, Nike’s trademark is held in Wisconsin. Secondly, despite the relatively small seizures, the sale price of the fakes and a pair of legitimate sneakers (around $40 for the fakes and $120 for the real version) is close enough that a customer who could afford the real version might go with the forgeries instead. Someone who buys a faux Louis Vuitton wouldn’t necessarily pay ten times the price of a fake for the real deal.

The operation is a fine example of how law enforcement and a trademark holder can work together in the fight against fakes. And while the results might seem miniscule in the face of a $200 billion dollar counterfeit industry, this shared initiative represents two of the three prongs needed to defeat the epidemic: (i.) savvy law enforcement and (ii.) a brand committed to protecting its interests.

You, the educated citizen, are the third prong. You understand the real cost of fakes. Gail Montenegro, a spokeswoman for U.S. ICE, was quoted in the article as saying “the victims [of counterfeiting] are American businesses, trademark holders and people who make and distribute the authentic products,” was on the right track, but only got it partially right.

Never forget that the victims are not only the trademark holders, but real people whose lives are ruined by forced labor and abuse.

The problem is bigger than revenue and line items. It’s about basic human rights.

That said, we encourage you to become a passionate member of the third prong. Spread the word and join the fight.

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