Debunking Common Myths About Counterfeits

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In July 2009, a VietNamNet reporter followed a technician to witness how a "BlackBerry dolly," a knockoff of Research In Motion's (RIMM) BlackBerry, is reproduced in Vietnam. In some 10 minutes, a phone was fully assembled for about $110 in components. In April 2009, Hewlett-Packard (HPQ) disclosed that it had discovered fake ink cartridges in Bahrain, Yemen, and Saudi Arabia.

Africa: China fakes' prime corridor

HP's revelation gives the lie to another myth about counterfeiting—that enforcing intellectual property rights in developing countries is a waste of time and resources and just creates negative publicity. Many brand owners may perceive enforcing intellectual property rights in some countries as a waste of time because of legislative and administrative hurdles. Some hesitate to take action because they fear publicity.

Take the continent of Africa, for example. The World Customs Organization now regards African countries as the main concern in Europe's fight against unsafe and counterfeit goods. Most fakes still originate in China, but Africa is now the main transit route to Europe.

Brand owners have opportunities to help shape legislation, especially in developing countries, to remove trade barriers that trigger counterfeiting. While doing so, they can create positive publicity and brand awareness. Regional organizations can be instrumental because they wield significant influence over regional governments. No effort is wasted in trying to stop counterfeiting.

Users and purchasers who believe it can't happen to them have fallen for what may be the most prevalent counterfeiting myth. Because counterfeits are sold through the same channels as secondary market and gray market goods, any buyer who purchases outside a vendor's authorized distribution chain faces a much higher risk of acquiring counterfeits. According to a study by the U.S. Commerce Dept. Bureau of Industry & Security, the number of counterfeit incidents reported by survey participants (including original component manufacturers, distributors, brokers, circuit board assemblers, prime contractors and subcontractors, and Defense Dept. agencies) climbed from 3,868 in 2005 to 9,356 in 2008, an increase of more than 140%.

Many brand owners offer verification tools to buyers and end users—including Web-based serial number verification, reseller authorization verification, and software product-key verification. Buyers should purchase only from suppliers authorized by the manufacturer. Authorized channels generally don't sell via online auctions because their authorizations often prohibit them from doing so. Not least, the biggest indication that a product might be fake is its price. If a product is being sold at a rock-bottom price, something may well be different.

If you don't take precautions, it can happen to you.

Hlavnicka is treasurer for the Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit organization founded in 2001; AGMA's mission is to address gray market fraud, parallel imports, counterfeiting, software piracy, and service abuse of technology products around the globe.

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