GHY Tradelines

(AFP)

A staggering 75 per cent of all fake goods seized worldwide from 2008 to 2010 were primarily from China, a report revealed on Tuesday.

The World Customs Organisation also said the booming industry accounts for some two per cent of world trade despite it being considered a “soft” form of crime.

And organised crime groups dealing in fake goods, drugs, human trafficking and illicit wildlife trade earn nearly $90 billion annually in East Asia and the Pacific, a separate UN report showed on Tuesday.

“Transnational Organised Crime in East Asia and the Pacific: A Threat Assessment” is the most comprehensive study of the subject, the UN Office on Drugs and Crime (UNODC) said. Read more here.
 

(Industry Canada)

New Legislation Introduces Strong New Protections

The Honourable Christian Paradis, Minister of Industry, and the Honourable Vic Toews, Minister of Public Safety, today introduced the Combating Counterfeit Products Act. This new legislation will protect Canadian consumers, Canadian manufacturers and retailers as well as the Canadian economy from the health and economic threats presented by counterfeit goods coming into Canada.

“Our Government is standing up for Canadian consumers and businesses, ensuring they do not fall victim to trademark counterfeiting. In today’s global marketplace, we need strong, modern rules to protect our economy and the health and safety of Canadians and their families,” said Minister Paradis. “Counterfeit products hurt our economy, undermine innovation, threaten jobs and expose consumers and their families to unsafe products.”

The Combating Counterfeit Products Act will provide the Canada Border Services Agency (CBSA) with the authority to take action against the commercial movement of counterfeit goods at the border, and will also include new criminal offences for commercial trademark counterfeiting. It will also allow Canadian businesses to file a request for assistance with the CBSA, in turn, enabling border officers to share information with them regarding suspect shipments.

“Counterfeiting poses health and safety risks to Canadians. Goods made using inferior or dangerous materials may lead to injury and even death. Proceeds from the sale of counterfeit goods may be used to support organized crime groups,” said Minister Toews. “This Bill will provide the CBSA and RCMP with new enforcement tools to better protect against commercial counterfeiting activities, both at the border and domestically.”

The value of counterfeit goods seized by the Royal Canadian Mounted Police surpassed $38 million in 2012, a five-fold increase since 2005. As Canada continues to negotiate new trade agreements and expand trade links to new markets around the world, it is imperative that Canadians have an effective regime to protect against counterfeit goods coming into Canada.

“As outlined by the Prime Minister, our Government is focused on the priorities that Canadians care most about including their families and the safety of their streets and communities,” concluded Minister Paradis.
 

(STR Trade Report)

U.S. Customs and Border Protection has released statistics showing that the number of its intellectual property rights seizures fell slightly in fiscal year 2012 but that the value of those seizures increased. Handbags continued to be the most seized commodity by value, China expanded its share of total IPR seizures to 72%, and there was a decline in seizures of consumer safety and critical technology goods.

Value and Volume of Seizures
The number of IPR seizures was down 7.8%, from a record-high 24,792 in FY 2011 to 22,848 in FY 2012. CBP attributes this decline to the expiration of a commonly enforced patent and the elimination of Section 337 exclusion orders from IPR seizure statistics. CBP notes that 68 exclusion order enforcement actions were taken in FY 2012.

The value of IPR seizures in terms of the manufacturer’s suggested retail price rose 13.5% to $1.26 billion, with the average value per seizure jumping 45.3% to $10,450. However, the domestic value of seizures of IPR infringing goods (i.e., cost when last purchased plus duties, fees and other charges) fell 12.2% to $156.5 million.

Commodities Seized
Handbags and wallets against topped the list of commodities seized by MSRP in FY 2012 at $511.2 million (40% of total seizures). This figure represents a 142.2% increase from FY 2011, which CBP attributes to “successful interagency-coordinated enforcement operations.” Other categories ranking high in this area included watches and jewelry ($187.0 million, 15% of the total), wearing apparel and accessories ($133.0 million, 11%), consumer electronics and parts ($104.4 million, 8%), footwear ($103.4 million, 8%), and pharmaceuticals and personal care items ($83.0 million, 7%). Read more here.
 

(IndustryWeek – AFP)

Sites were allegedly selling a wide range of fake products with such brand names as McAfee, Symantec, Armani, Guess, Burberry, Chanel, Dior and Tommy Hilfiger

U.S. and European authorities said Monday they seized 132 websites in a transatlantic law enforcement crackdown on online sellers of counterfeit merchandise. The seizure was the latest in a string of efforts by U.S. officials to shut down online forgers, but the first joint effort with EU officials.

Monday’s announcement was the result of a joint probe by U.S. Immigration and Customs Enforcement (ICE) with authorities from Britain, Belgium, Denmark, France, Romania and the European Police Office (EUROPOL), according to a statement released in Washington. Read more here.
 

(Reuters)

Chinese police, working with U.S. authorities, have arrested 73 people for manufacturing and exporting fake international brands including Hermes, LVMH’s Louis Vuitton and Coach Inc, state news agency Xinhua said.

Police also confiscated more than 20,000 counterfeit bags and closed 37 illegal sites used for the production and sale of the bags, Xinhua said late on Sunday, citing a Ministry of Public Security statement.

The gang had manufactured and sold more than 960,000 such fake bags, it added.

Officials in the southern export hub of Guangdong province began uncovering the ring in January which was producing and exporting huge amounts of fake goods, the report said. Read more here.
 

(CBC News)

Why is there a global law on counterfeit bills but not counterfeit drugs? author asks

Fake and substandard medicines harm and kill patients in developed and developing countries, say Canadian and international researchers calling for an international treaty to tackle the problem.

The deadly meningitis outbreak in the U.S. from contaminated steroid injections highlights the consequences of fake medicines that contain little or no active ingredients and substandard drugs that don’t meet regulatory quality control standards, experts said in this week’s issue of the British Medical Journal.

U.S. authorities are investigating connections between the Canadian owner of an internet pharmacy firm and the sale of counterfeit versions of bevacizumab, an injectable cancer medication that goes by the brand names Avastin and Altuzan.

“Why is it that global law on money counterfeiting a fake 10 dollar bill is tougher than global law on a fake cancer treatment that can kill you?” asked Amir Attaran, Canada Research Chair in law, population health, and global development policy at the University of Ottawa, an author of the report. Read more here.
 

(Jennifer Baker — PC Advisor)

Leaked documents reveal fear of an ACTA-style fallout

Following a meeting of the European Union member states on Oct. 5, leaked documents have shown this week that the E.U. plans to back away from criminal sanctions in its copyright agreement with Canada.

CETA, the Canada-E.U. trade agreement, is currently being negotiated. It initially included many paragraphs lifted directly from the controversial ACTA (Anti-Counterfeiting Trade Agreement) pact that was shot down spectacularly by the European Parliament earlier this year. ACTA triggered widespread protests from citizens concerned that it would breach their online civil liberties.

Now, according to documents from the Cyprus Presidency of the E.U. seen by IDG News Service, the CETA text has been greatly watered down in order to avoid a similar outcome. The intellectual property protection chapter is now understood to say that countries “may” provide for criminal procedures and penalties. Read more here.
 

(The Canadian Press)

Fake jackets had raccoon, dog fur instead of coyote

Outerwear manufacturer Canada Goose Inc. has won what it calls a “significant” case against counterfeiters in a Swedish court.

The Toronto-based maker of clothing for extreme conditions said Tuesday that the court found five Swedish nationals guilty of felony fraud, trademark infringement and customs offences in the case.

Two of the defendants have been sentenced to prison time and Canada Goose has been awarded 701,000 Swedish krona in damages, a sum equivalent to about $105,000 Canadian. [...]

Purchased in Thailand and repackaged in Sweden, the fake goods were found to be of poor quality in fabric and detailing and used raccoon and dog fur instead of coyote around the jacket hoods. Read more here.
 

(CBC News)

Customs agents in Los Angeles have seized about 20,000 pairs of counterfeit luxury shoes they say could have generated $18 million in sales.

The shoes, bearing the trademark red sole that Christian Louboutin originals are known for, were shipped from China, according to officials at the Los Angeles/Long Beach seaport complex.

Four shipments were seized on Tuesday, while another shipment was seized July 27, says U.S. Customs and Border Protection (CBP) spokesman Jaime Ruiz. Read more here.
 

(Agence France-Presse)

China, emerging economies push pirated software use to an all-time high.

Software piracy cost the industry a record $63.4 billion globally in 2011 with emerging economies listed as the main culprits, an annual study said Tuesday. This was up nearly 8% from the previous record of $58.8 billion in 2010, the Business Software Alliance (BSA) said in the study.

In the Asia Pacific, which comprises several emerging economies including China, bootleg software usage also cost the industry an all-time high of $21 billion last year, up 12% from 2010, BSA said. Read more here.
 

(Electronics Feed)

Stringent new counterfeit-part regulations contained in the 2012 U.S. National Defense Authorization Act (NDAA) may have broad international implications, impacting hundreds of overseas companies that have supplied billions of dollars’ worth of items to the American government.

Non-U.S.-based suppliers accounted for more than $2 billion during the five-year period from 2007 to 2011, with European Union (EU) and Middle Eastern companies accounting for the bulk of the American government’s procurement spend, according to information and analytics provider IHS (NYSE: IHS).

“There’s a perception that U.S. regulations such as 2012 NDAA, Section. 818. Detection and Avoidance of Counterfeit Electronic Parts,is only an issue for American companies, and that they don’t impact firms in Europe, the Mideast and elsewhere,” said Greg Jaknunas, senior product manager, supply chain solutions, at IHS. “However, the impact is beginning to be felt worldwide, as many international companies and global manufacturing facilities can directly participate in the defense supply chain and begin to see customer requests for counterfeit detection and avoidance measures that are flowed down through the supply chain.” Read more here.
 

(Forbes – Elise Ackerman)

A new GAO report published on Friday warned that the global supply chain of IT products could be putting national security at risk.

“Federal agencies rely extensively on computerized information systems and electronic data to carry out their operations,” the 45-page report stated. “The exploitation of information technology products and services through the global supply chain is an emerging threat that could degrade the confidentiality, integrity and availability of critical and sensitive agency networks and data.” […]

Concern about the supply chain have been rising among both corporate and government officials. A single piece of equipment, such as a laptop, can include components from all over the world—Canada, China, Czech Republic, Ireland, Israel, Italy, Japan, Malaysia, Philippines, Poland, Singapore, Slovak Republic, South Korea, Taiwan, Thailand and Vietnam. Threats to the supply chain range from the installation of malicious code in either hardware or software to the installiation of counterfeit equipment and the disruption of the production of critical components. Read more here.
 

(Bloomberg/Business Standard)

US authorities charged 29 people with smuggling $325 million in counterfeit consumer goods from China, including phony Nike sneakers and Coach handbags, through a New Jersey port.

The bust was one of the largest counterfeiting probes in US history, and it involved smuggling cigarettes, handbags and sneakers through the Port Newark-Elizabeth Marine Terminal as US agents secretly watched and listened, US Attorney Paul Fishman said. Agents infiltrated two overlapping criminal rings and lured them to use a front company run by the government.

Authorities arrested 23 people in New York, New Jersey, Texas and the Philippines. Six are at large. Most are Chinese and lived in New York. Prosecutors said they used phony paperwork to import goods in corrugated shipping containers, used distributors and wholesalers, and laundered illicit proceeds. Read more here.
 

(NBC Chigago)

National Association of Boards of Pharmacies maintains list of approved online pharmacies

It’s almost too easy: With a couple of clicks of a mouse and a credit card, anyone can order prescription drugs online. Scores of online pharmacies offer easy access to an array of medications – often at bargain prices – delivered right to your mailbox.

These days, it’s estimated that one out of every six people in the United States are filling their prescriptions online.

But do you really know what you’re getting?

Unit 5 took an exclusive look inside the world of counterfeit medicine: Drugs made to look exactly like real Xanax, Cialis, Valium or Viagra – but which actually contain anything from baking soda, paint and dirt, to amphetamines, or even poison. Read more here.
 

(ST&R Trade Report)

European Union Trade Commissioner Karel de Gucht announced last week that the Anti-Counterfeiting Trade Agreement will be sent to the European Court of Justice for a ruling on whether the pact is “incompatible in any way with the EU’s fundamental rights and freedoms.” Recent weeks have seen tens of thousands protesting across Europe against ACTA, which opponents fear could result in censorship or other restrictions of civil liberties. Similar concerns in the United States appear to have all but doomed legislation seeking to strengthen online piracy enforcement efforts.

De Gucht noted that the European Commission has passed ACTA to national governments for ratification as well as to the European Parliament for debate and a vote, which is expected this summer. The European Council also adopted ACTA unanimously in December and authorized EU member states to sign it. Press sources note that while 22 of the 27 members have done so, the others have said they will not sign the agreement in its current form, and all members must sign for the EU as a whole to formally become a party.
 

(Alison Crawford — CBC News)

Knockoff makeup has caused allergic reactions and posed bacterial threat, says industry

It started with purses and sunglasses.

Now Canadians are buying counterfeit makeup, perfume, shampoo and other health and beauty products the RCMP warns could endanger the public. In the last six months, the RCMP in the Toronto area has seized tens of millions of dollars worth of knockoff goods.

“We’ve estimated that counterfeiters would quadruple their money on a load of counterfeit goods. And that’s a conservative estimate,” said RCMP Insp. Todd Gilmore. He said almost half of all knockoff goods seized are health and beauty products that people apply to their hair and skin or rub around their eyes, nose and mouth.

“Counterfeiters have no regard for your health and safety. They just want to maximize their profits. Who knows how this was produced.” Read more here

Related: Should Border Agents be Able to Seize Counterfeit Goods? (Online CBC Poll)
 

(Legal Times)

It was a banner year for intellectual property enforcement, with U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement agents seizing nearly 25,000 shipments of infringing goods from abroad in fiscal year 2011.

The number one source country for knockoff products continues to be mainland China, which accounted for 62 percent or $124.7 million of the total domestic value of seizures. Hong Kong was second, with 18 percent, followed by India, with 3 percent.

For the first time since 2005, copycat footwear did not top the list of seized goods. Instead, shipments of consumer electronics — especially cell phones — were the most valuable products seized, with about $39 million worth of fake electronics halted at the border. Also on the top 10 list of seized products: pharmaceuticals, optical media, clothes and perfume. Read more here.
 

(Lexology – Jacqueline Chernys, Blaney McMurtry LLP)

Counterfeit goods have long been a concern of businesses which invest heavily in product research, development and branding with hopes of gaining market exclusivity. With the movement of manufacturing to cheaper labour markets overseas, counterfeiting has steadily increased over the last number of years. Fortunately, there may be some strategies for businesses to help prevent counterfeiting and a related problem, referred to as grey marketing.

Counterfeit goods – “knock-off” purses and DVDs that you see on street corners, for example – are sold on what is sometimes referred to as the “black” market. The goods in the black market are illegitimate in that they are not produced by the authorized manufacturer and they infringe on the copyright and trademark rights of the brand owner.

While most consumers are aware of the black market, fewer consumers are aware of the “grey” market. Unlike counterfeit goods, which are of inferior quality, grey goods are the real thing in that they are produced by an authorized manufacturer. However, grey goods are brought into the domestic market by unauthorized dealers. Grey goods are referred to as “grey” because their presence in the market is clouded, or “grey,” in that they may infringe intellectual property rights. Because grey goods are genuine goods, the grey market presents unique challenges for businesses seeking to enforce their intellectual property rights. Read more here.
 

(Robert Hiltz — Postmedia News)

If a piracy and counterfeiting report to be released Tuesday reminds MPs of something they’ve seen before, it should – the recommendations were first put forward in March 2007.

Postmedia News has learned the Canadian Anti-Counterfeiting Network will be releasing a list of recommendations to crack down on fraudulent goods — from music to auto parts and even to medication — with only minor changes from the previous iteration because the government has followed through on few of the group’s proposals.

According to John Cotter, chair of the CACN, the government, despite taking some small steps forward, still needs to do more, four years after the first report was released.

“In general terms, and there are a couple of exceptions, the various recommendations in the initial road map still stand today. There are a couple where action has been taken,” Cottar told Postmedia News. “The problem hasn’t gone away, in fact the counterfeiting and piracy problem has grown (since 2007).” Read more here.
 

(Chris Holmstrom — KOLD News)

Golfers beware!  U.S. Customs and Border Protection says its seizing an increasing number of counterfeit golf products by consumers over the Internet.

Bobby Saavedra, PGA Apprentice and Manager of Practice Tee in Tucson, knows a lot about golfing.  Besides being really good at the game, he has a sharp eye for fake equipment.

“They are making them pretty good these days, I mean I’ve seen a few of the sets to where, you know the guy paid $300, it was supposed to be a $900 club set and they are great clubs,” he said.

Saavedra says many times knock-off equipment will have the name of the manufacturer misspelled or a different logo.  Everything will look similar, but it’s a fake.

U.S. Customs and Border protection is putting consumers on alert.  It says counterfeit golf products being sold online have increased recently and Saavedra agrees.

“We do a lot of our ordering off of EBay and we’ve noticed over the past couple years that counterfeits have definitely gone up.” Read more here.