Moles, meet the molecatchers – officialdom takes on the counterfeiters

With the bulk made in China, the International AntiCounterfeiting Coalition estimates the global value of counterfeit goods at $1.77 trillion. Seven percent of the world’s total trade is counterfeit in nature, estimates the World Customs Organisation. The financial loss to companies threatens jobs, reduces national tax takes, and suffocates innovation. Fake goods can be unsafe, deadly even. Counterfeit goods are often made in run-down factories by exploited workers. Control of the most lucrative faked goods – such as pharmaceuticals – is often in the hands of criminal syndicates.

Buying a fake might be sticking it to the Man, but it’s not always a victimless purchase. There’s no suggestion that Cowboy factories employ child labour or get involved in people trafficking but it most definitely goes on in Asia.

“I remember walking into an assembly plant … a couple of years ago and seeing six or seven little children, all under ten-years-old, sitting on the floor assembling counterfeit leather handbags,” an investigator told Dana Thomas, author of Deluxe: How Luxury Lost Its Luster.

“The owners had broken the childrens’ legs and tied the lower leg to the thigh so the bones wouldn’t mend. [They] did it because the children said they wanted to go outside and play.”

Organisations and law enforcement agencies across the world are united in their fight against the fakers; here are some of them:

WORLD FEDERATION OF THE SPORTING GOODS INDUSTRY – WFSGI The World Federation of the Sporting Goods Industry is the world authoritative body for the sports industry. Based in Switzerland it was founded in 1978. The WFSGI has many bicycle industry members. Since 2013 these companies have been able to take advantage of an anti-counterfeiting service provided by Convey of Italy. Companies pay a joining fee of €2000 and then €2000 per month for the removal of 1000 counterfeit listings on B2C websites, such as Aliexpress.

The WFSGI’s secretary general Robbert de Kock told BikeBiz: “An important difference between the cycling industry and other industry areas we represent is that when a bicycle frame or wheel breaks people can get seriously hurt. Even textile counterfeit products may pose serious health risks due to the use of forbidden chemical substances in the production process.”

INTELLECTUAL PROPERTY OFFICE – IPO The Intellectual Property Office is housed within the Department for Business, Innovation, and Skills, and is responsible for the UK framework of Intellectual Property rights, comprising patents, designs, trade marks and copyright. The IPO has worked with the Anjie Law Firm in China, as well as technology transfer and IP licensing experts from both the UK and China, to develop a toolkit that helps UK and Chinese universities and industry manage IP in collaborative research projects. The aim of the toolkit is to help non-IP experts to quickly and simply handle issues relating to the ownership and exploitation of any IP rights generated in collaborations. Officials in the IPO have regular meetings with their counterparts in China.

Huw Watkins, the IPO’s Head of Enforcement, told BikeBiz: “The IPO is aware of a number of cases in which consumers have been sold counterfeit cycling equipment, from exploding bike lights to unsafe bike frames. We would like to work more closely with the cycling industry to help address this and would encourage them to engage with the IPO whenever counterfeits are discovered.”

Minister for Intellectual Property Baroness Neville-Rolfe DBE CMG said: “The production, distribution and sale of counterfeit goods have always had close links to serious organised crime, a fact often not considered by the everyday bargain-hunting or cash-strapped consumer.”

POLICE INTELLECTUAL PROPERTY CRIME UNIT – PIPCU The Police Intellectual Property Crime Unit is a specialist national police unit dedicated to protecting the UK industries that produce legitimate, physical goods and online and digital content from intellectual property crime. The unit was launched in September 2013 with £2.56m funding from the Intellectual Property Office. Led by Detective Chief Inspector Teresa Russell, PIPCU has a team of twenty detectives, analysts, and researchers, and is based within the Economic Crime Directorate of the City of London Police, the National Lead Force for Fraud.

“The police cannot tackle IP infringement alone, so partnership working is key,” said DCI Russell when she was appointed in April 2018.

“It is vitally important that we receive intelligence and information from the industry through the Intellectual Property Office or crime referrals to PIPCU. This will assist us greatly in highlighting and measuring the true scale of IP infringement and the economic and consumer harm caused by this crime.”

CHINA BRITAIN BUSINESS COUNCIL – CBBC The China-Britain Business Council works closely with the Chinese e-tail giant Alibaba. In October 2015, Intellectual Property Minister Baroness Neville-Rolfe told delegates at the UK-China Symposium that 25 UK businesses, including several large multinationals, have been able to get counterfeit goods sold on Alibaba removed. The symposium allows British and Chinese businesses to understand how they can protect their IP.

Baroness Neville-Rolfe said: “British products are in demand around the world because our firms invest heavily in creating highly original designs. The removal of £8m of counterfeit UK goods will protect the livelihoods of some of our most innovative firms and the jobs of British people. There is more work to be done, but I am pleased that the UK is collaborating closely with Alibaba to find constructive solutions.

David Ho, senior legal counsel, Alibaba Group said: “We are committed to the protection of intellectual property rights and the long-running battle to eradicate counterfeit merchandise that may appear on our marketplaces. We continue to work with rights holders to protect their IPR and welcome further collaboration with the CBBC and British companies going forward.”

A new agreement between Alibaba and the CBBC guides UK companies, including small ones, on how to use Alibaba’s “take-down” system.

WORLD INTELLECTUAL PROPERTY ORGANIZATION – WIPO The World Intellectual Property Organization is the global forum for intellectual property services, policy, information, and cooperation. WIPO – founded in 1968 – is a self-funding agency of the United Nations, with 188 member states.

INTERNATIONAL TRADEMARK ASSOCIATION – INTA The International Trademark Association is the global association of trademark owners and professionals dedicated to supporting trademarks and related intellectual property. INTA’s members are more than 6,700 organizations from 190 countries. Founded in 1878 and headquartered in New York City, INTA also has offices in Brussels, Shanghai and Washington D.C. and representatives in Geneva and New Delhi.

INTA’s position on counterfeiting is that Governments at the national and international level must strengthen anticounterfeiting laws and enforcement, and cooperate more effectively to eliminate linkages between counterfeiting and organised crime and serious threats posed by counterfeiting to the health and safety of consumers, economies, and national security.

INTA’s Anticounterfeiting Committee China Subcommittee said:

“The Internet allows criminals to remain anonymous, thereby avoiding capture and discovery. The global nature of e-commerce also means that many of the counterfeiters are located in different countries with different legal systems in which laws and interpretations governing online infringement are still developing. This only makes it more difficult to effectively address the counterfeiting network as a whole.

“Furthermore, to date, there has been relatively little cross-border cooperation between authorities to stop international online counterfeiting rings.”

The committee adds: “Although many challenges continue to exist, China is rapidly developing its legal and enforcement framework for addressing online counterfeiting with legislation and court decisions now strengthening penalties against sellers of counterfeits and clarifying the duty of care of intermediaries to much the same standard as found in other major countries. Over the past few years, the central government has encouraged local police and administrative enforcement authorities to become more active in monitoring and investigating online counterfeiting.”

To educate teens about the value of trademarks and the negative effects of counterfeiting INTA runs the Facebook-based “Unreal” campaign. “Teens’ purchasing power will only increase over time, and they will soon be the next generation of consumers. With that in mind, we see a tremendous opportunity for INTA to arm teens with as much information about the economic, social and health risks involved with counterfeiting as possible,” said Alan C. Drewsen, INTA’s executive director. “It is our hope that this information will influence their decision the next time they are approached by a site or vendor selling counterfeit goods.”

INTERNATIONAL ANTICOUNTERFEITING COALITION – IACC The International AntiCounterfeiting Coalition Inc., is a Washington, D.C.-based non-profit organisation, founded in 1979. The IACC’s membership also includes law firms, investigative and product security firms, government agencies and intellectual property associations who are committed to fighting counterfeiting and piracy.

The IACC’s MarketSafe collaboration with Alibaba is an expedited “take-down” service.

IACC president Bob Barchiesi said: “We won’t solve IP owners’ problems overnight, but Alibaba Group has consistently shown its commitment to working with the IACC and its members, and we value the partnership that we’ve developed. We’re hopeful that our past success can be expanded to include additional online platforms as well.”

To date, the IACC MarketSafe program has resulted in the removal of over 110,000 counterfeit listings.

INTELLECTUAL PROPERTY RIGHTS CENTER – IPRC The US National Intellectual Property Rights Coordination Center is based in Arlington, close to Washington, D.C. The centre is a cluster of Immigration and Customs Enforcement, Customs and Border Protection, the Food and Drug Administration, the FBI, the Patent and Trademark Office, the US Postal Service, the Defense Criminal Investigative Service, and the Naval Criminal Investigative Service.

HOMELAND SECURITY INVESTIGATIONS – HIS Homeland Security Investigations, based in Houston, is a branch of US Immigration and Customs Enforcement. It can “seize” web domains used by counterfeiters because ICANN, the international web domain registrar, is based in the US. URLs closed down – and which were selling fake cycle clothing and cycle frames from Specialized, Cervélo and Pinarello – included cyclingyong.com, samewood.com, ecyclingonline.com, cycleoutfit.com, ecyclingjerseys.com, bike-jersey.com, cycling-outfit.com, teamscycling.com, cycling-jersey.net and Yongcycling.com. Visitors to these sites now find a banner that notifies them of the seizure and highlights the federal crime of wilful copyright infringement.

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE – USTR The Office of the US Trade Representative publishes the Notorious Markets List, an annual report on the online and physical marketplaces that reportedly engage in and facilitate copyright piracy and trademark counterfeiting. Alibaba sites were removed from the Notorious Markets List in 2013 but were then placed back on the list in 2016.

EUROPEAN UNION INTELLECTUAL PROPERTY OFFICE – EUIPO The European Union Intellectual Property Office, in partnership with the European Patent Office, operates IP Key, which includes in-depth studies, peer to peer exchanges, development of databases and tools, seminars, workshops, training and high-level events to do with IP. It is managed by the Beijing-based Technical Experts’ Team with back-up from the IP Key Action Team at EUIPO’s headquarters in Alicante, Spain.

A document from IP Key said: “At the start of EU-China cooperation, few if any top level Chinese government officials considered IP protection a priority, particularly outside the substantive agencies. Since then, knowledge of intellectual property protection and related laws, administration and systems have grown hand-in-hand with the country’s ability to design and develop its indigenous technology.

“The Chinese government sees that the value created within an economy by technology, rather than a reliance on low-value manufacturing, is the way of the future. Significant resources have been allocated to the improvement of IP administration and enforcement systems, but also to the development of domestically engineered and commercialized technologies.

“As China has gained a greater appreciation and understanding of the values contributed to the economy by technology and the importance of fostering technological growth through intellectual property protection, it has raised IPR issues to the highest levels of government.”

Faking it – Inside the shady world of counterfeit bikes, clothing and parts is a series of 20 articles. For offline reading convenience the 25,000 words can be found on an illustration-rich PDF, a Kindle file, an eBook and a Word document.