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Donfucius Says: February 3rd, 2012. Random Bits Of Wisdom.

  1. “Since light travels faster than sound, isn’t that why some people appear bright until you hear them speak?” — Patti Molloy
  2. “Preach the Gospel at all times, and when necessary use words.” — Aaron Rogers Quoting Francis of Assisi
  3. “Diplomacy is the art of saying “Nice doggie” until you find a rock.” — Will Rogers
  4. “Before they invented drawing boards, what did they go back to?” — Patti Molloy
  5. “The way we’re going… if I called up another pitcher, he’d just hang up the phone on me.” — Any Brewers Manager
  6. “When someone is impatient and says I haven’t got all day,” I always wonder, “How can that be? How can you not have all day?” — George Carlin
  7. “We’re fools whether we dance or not, so we might as well dance.” — Old & Wise Japanese Proverb
  8. “Blessed are the cracked – for they are the ones who let in the light.” — Donfucius
  9. “Good judgment comes from experience, and a lot of that comes from bad judgment.” — Will Rogers
  10. “I don’t mind how much my Ministers talk, so long as they do what I say.” — Margaret Thatcher

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ATL's Anti-Counterfeiting Digest

Archive for January, 2010



FDA Says Fake Forms Of Glaxo Diet Drug Can Be Dangerous.

January 25th, 2010

By Lisa Richwine Mon Jan 25, 2010

WASHINGTON (Reuters) Fake versions of GlaxoSmithKline’s over-the-counter diet pill were contaminated with dangerously high levels of a prescription weight loss ingredient, U.S. officials warned on Saturday.

alli_pills

Lab tests showed counterfeit versions of Glaxo’s pill Alli contained high levels of sibutramine, Food and Drug Administration officials said.

Sibutramine is the active ingredient in Abbott Laboratories Inc’s prescription diet drug Meridia.

“The amount of sibutramine in the counterfeit Alli poses a serious health risk to some individuals,” Dr. Janet Woodcock, head of the FDA’s drug unit, told reporters on a conference call.

“A person taking the counterfeit Alli as directed would be exposed to twice the maximum prescription dose of sibutramine every day,” she said.

The FDA warned earlier this week that sibutramine should not be used by people with a history of cardiovascular disease because it can raise the risk of heart attacks and strokes.

Regulators in Europe concluded sibutramine was too risky and Abbott agreed to suspend sales there.

Woodcock said even healthy people exposed to the counterfeit Alli pills could experience effects including palpitations, sleepiness, anxiety, nausea and slightly elevated blood pressure.

The fake versions were sold on the Internet, including through online auction sites, FDA officials said. There is no evidence of counterfeit versions in stores, they said.

The fake products were sold as 60-milligram, 120-count refill packages only, Glaxo said. The company said it was working with the FDA to have the counterfeits removed from online auction sites.

The agency urged all consumers taking Alli to check they had bought legitimate versions and discard any fake products immediately.

The fake versions have some differences on the packaging, including a missing lot code on the outer cardboard packaging. The FDA posted links to photographs of Glaxo’s approved versions and the counterfeits here.

FDA Commonly Asked Questions And Answers. Actual Examples Of Counterfeited Prescription Drugs.

January 25th, 2010

Today’s Topics – FDA Q&A. Counterfeit Prescription Drugs.
In the fight against counterfeited prescription medicines, don’t bury your head in the sand. Expect the unexpected. Listen for evil, look for evil, and blow the whistle when you encounter evil.

FDA Questions And Answers. Q. What is the definition of a counterfeit drug? A. U.S. law defines counterfeit drugs as those sold under a product name without proper authorization. Counterfeiting can apply to both brand name and generic products, where the identity of the source is mislabeled in a way that suggests that it is the authentic approved product. Counterfeit products may include products without the active ingredient, with an insufficient or excessive quantity of the active ingredient, with the wrong active ingredient, or with fake packaging.

Donfucius Note: As they dilute or divert legitimate products, counterfeiters also make false and wild claims. In the illustration below, would you rather go camping at a three star campground, five star campground, or fourteen-star campground? There is an old phrase that says: “Let the buyer beware”. In most cases, you will get what you pay for: “The bitter taste of poor quality lingers long after the sweet taste of price has evaporated” (Donfucius).

Q. What risks are involved with taking counterfeit drugs?
A. An individual who receives a counterfeit drug may be at risk for a number of dangerous health consequences. Patients may experience unexpected side effects, allergic reactions, or a worsening of their medical condition. A number of counterfeit products do not contain any active ingredients, and instead contain inert substances, which do not provide the patient any treatment benefit. Counterfeit drugs may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.

Q. What can consumers do to protect themselves from counterfeit drugs?
A. Consumers can protect themselves from the risks associated with counterfeit drugs by purchasing prescription medications from state-licensed pharmacies in the U.S. Consumers must be vigilant when examining their personal medications, paying attention to the presence of altered or unsealed containers or changes in the packaging of the product. Differences in the physical appearance of the product, taste, and unexpected side effects experienced should alert the patient to contact their physician, pharmacist, or other healthcare professional who is providing treatment.

Donfucius Note: Ortho Biotech Products issued a warning to health care professionals about the existence of counterfeit vials of its anti-anemia drug Procrit. The concentration of the active ingredient was 20 times lower than what was listed on the label. The two photos (below) show the boxes of the authentic (top) and counterfeit (bottom) product. The counterfeit boxes could be identified by the text running off of the right side of the box. The average consumer would probably not notice this. ATL Pharma Security Label Systems is cGMP compliant. We operate under the strict regulations of 21 CFR 210 and 211. This means we must hold tight registration for both commercial pharmaceutical labels and clinical trials. It is our suggestion that you always buy your brands from reputable companies with anti-counterfeiting protection.


Q. How does FDA work with domestic and foreign government agencies to combat counterfeits?
A. FDA is currently working with various U.S. government agencies, such as the Department of Homeland Security (Customs and Border Protection) and the Department of Justice, to combat counterfeit drugs. FDA is also very active in WHO’s International Medical Products Anti-counterfeiting Task Force (IMPACT) which is a public/private effort to develop regulatory, legislative, enforcement, communication, and technological tools to combat counterfeit drugs around the world. FDA also works bilaterally and multilaterally with individual countries and regions.

Q. Are there any promising technologies that have the capability of preventing counterfeiting?
A. There are several technologies that may prove helpful, including radio frequency identification (RFID) chips and taggants. For example, radio waves are used to automatically read RFID tags that are contained on items, such as pharmaceutical products. These tags could have individual serial numbers on each product, thus allowing the product to be tracked and traced through the supply chain. Appropriate implementation and use of this technology can help decrease the opportunities for diversion and counterfeiting by allowing wholesale distributors and pharmacies to authenticate that the product was handled by legitimate, licensed entities in the drug supply chain.

The fight against counterfeited drugs. Below are two photographs of counterfeited drugs. The average consumer will have a very difficult time telling apart the real from the fakes.

You (as a brand owner or as a consumer) must be able to rely on the labeling/ packaging integrity to identify (thus stop) counterfeiting. ATL has nine trademarked products that provide a mix and rotate (M&R) approach (during sequential production runs) for anti-counterfeiting protection. These include: SecurLock: Tamper-Evident breakaway closure; SecurDetek: Invisible, Hidden Page Marker; SecurMark: Anti-Counterfeiting holograms; SecurStretch: Tamper-Evident Unit Closure; SecurPly: Booklets for soft squeeze tubes; PharmaVoid: Security Closure/ Destructible Tapes; Triple-Ply: Three-Tier overt and / or covert levels of anti-counterfeiting; D2 WAO: Wrap-Around style (up to 35 panels) that fit most cylinders – (U.S. Patent Applied For). Below is an example of ATL’s SecueDetek. This label features an invisible, non-degradable (to 3,000 degrees centigrade) digital forensic code. With this system you can authenticate (anywhere in the world) in one second.

Thus far, the counterfeiting targets discovered in the United States have been largely the popular and expensive “high-value pharmaceuticals”-cancer drugs, performance-enhancing growth hormones, drugs used to treat AIDS, and Viagra. In other parts of the world, however, anti-malaria drugs, antibiotics, and even common analgesics have become counterfeiting targets.
According to the international police agency Interpol, at least 5% of the world pharmaceutical trade involves counterfeit drugs, and up to 60% of medicines in the developing world may be counterfeit. Not only has this cost the drug industry more than $12 billion annually, but it has also resulted in an untold number of deaths. This vulnerability was illustrated when 109 Nigerian children died after taking counterfeit paracetamol (acetaminophen) syrup.

Although many-if not most-counterfeit drugs are manufactured and distributed in India, China, Brazil, South Africa, and Russia, they are poised to make their way to the U.S. market. That is because they are increasingly turning up at pharmacies in Mexico and other intermediary countries and through difficult-to-trace online pharmacies. As a growing number of Americans attempt to save money by purchasing their medication in Canada, Mexico, and other foreign countries or through the Internet, the number of counterfeit or adulterated drugs making their way into the U.S. market is potentially staggering.

ATL strongly suggests that you protect your brands. In so doing you will be protecting the public. Coach Pat Riley said it best: “There’s no such thing as coulda, shoulda, or woulda. If you shoulda and coulda, you woulda done it.”

Recent Counterfeiters And Their Illicit Deeds – Leonardo DiCaprio In “Catch Me If You Can!”

January 24th, 2010

I am amazed when people look at a problem and choose to do nothing. It is very similar to talking about the heavens and stars. Why is it that when you tell a person that there are 400 billion stars in the sky – he will believe you? But tell this same person a bench is wet and he will have to touch it. The same holds true for counterfeiting. Most people know it’s a big problem, yet most people stay in denial, hoping the problem will not affect them (when in reality it already has). To help give you a perspective on the huge scope of the counterfeiting problem, I have chosen to tell you five stories about counterfeiters:

Counterfeiting History – Part 1: Frank William Abagnale Jr worked under 8 identities during the 1960s, including his first as Pan American Airlines Pilot Frank Williams. In 5 years, he passed over $2.5 million in counterfeit checks. This fraud was in 26 countries and all 50 states. He was arrested in France at an Air France ticket counter when an agent recognized his face from a wanted poster. In the movie based on his life, “Catch Me if You Can”, the real Abagnale made a cameo appearance as a French policeman (photo above). Leonardo DiCaprio and Tom Hanks were the stars.

Counterfeiting History – Part 2: Anatasios Arnaouti is a criminal from Manchester who led one of the most ambitious forgery operations in history. He and his accomplices were jailed in 2005. The total amount of counterfeit money they printed is unknown as their forgery operation had been in production for several years, and was capable of producing tens of thousands of counterfeit notes each day. The extent of the crime was considered so severe that it could have driven the United States and UK economies into panic.

Counterfeiting History – Part 3: In 2004, French police seized fake 10 euro and 20 euro counterfeit bank notes worth a total of around 1.8 million (pounds) from two laboratories and estimated that 145,000 counterfeit notes had already entered circulation.

Counterfeiting History – Part 4: In 2006, a Pakistani government printing press in the city of Quetta was accused of mass producing huge quantities of counterfeit Indian bank notes. The “Times of India” reported this scandal, based on Central Bureau of Intelligence investigation. The money was allegedly used to fund terrorist activities inside India. It is believed that bombings in Mumbai were funded using this fake currency.

Counterfeiting History – Part 5: Today the (hardest to detect) counterfeit notes are claimed to be US dollar bills produced in North Korea, called “Super Dollars” because of their high quality. The US government believes they have been circulating since the late 1980s and that they serve two purposes: as a source of income and to undermine the US economy. The United States has taken steps to “Mix & Rotate” the production of dollars. For more details, please reference “The President’s Corner” from October 7th, 2008.

How To Fight Back
Detecting counterfeit bills often isn’t easy by eye. A bogus $100 bill (believed to have been made in North Korea), would be nearly impossible for a novice to identify as a fake. The paper it is printed on contains no starch and doesn’t reflect ultraviolet light, which is one sign of a counterfeit. It has the security strip on the left side of the bill and a watermark of Ben Franklin (whose portrait is on the bill) on the right-hand side, as well as replicating other security features.

There is now a scanner that searches for missing covert features in bogus “Super Dollars”. The device looks at several aspects of the bill to confirm its legitimacy. U.S. paper money is printed with magnetic ink, but that’s also used for many fraudulent bills. On real bills the ink is distributed in a consistent pattern whose magnetic resonance can be mapped. The magnetic map is stored in the scanner, as well as three other maps containing ultraviolet, infrared and other measurements taken from legitimate bills. Scanning a bill takes less than one second. If there’s any spike, any anomaly in any of the threads of data, the scanner rejects the dollar.

What I have just described is a “Layered” approach in anti-counterfeiting. You may not be the government fighting “super dollars”, but then again, you are fighting to protect your brand from counterfeiters. The money you save in brand protection and litigation should be considered as “super dollars” to you. In the process (of saving money) you will be protecting the public.

Here How Forensic Authentication Works: (1) A unique digital code, “ATL 12-IDGJ”, is set-up for your brand; (2) Your digital code is incorporated into the label through multiple entry points (Inks, Varnishes, Adhesives) (This is a “mix and rotate” “layered” approach); (4) The digital code is also incorporated into (or linked to) the Pedigree Documentation; (5) If the scanner indicates “ATL 12-IDGJ” then the established digital code allows traceability; (6) This uniqueness cannot be duplicated; (7) Thus it is impossible to counterfeit.

It only takes a second to authenticate your product anywhere in the world (scanner photo above). This is because the invisible, non-degradable forensic digital code is virtually impossible for the counterfeiters to duplicate. This amazing technology is from ID Global, the leader in scientific identification.

Counterfeiters are attacking us on all fronts. Protect yourself and your brand. Benjamin Franklin said it best: “Even a tiny leak can sink a great ship.”

“To Counterfeit Is Death: Y2K+10 Version”. The Bucket Shops. How Counterfeiters Harm The Public.

January 23rd, 2010

What is a Y2K+10 (year 2010) bucket shop? How does a bucket shop affect the manufacturer of legitimate brands? Look at the two photos below, one of a counterfeiter’s equipment (the bucket shop), and one of a counterfeiters press (also a bucket shop). These facilities can be in a basement or garage, and are usually filthy.

If you are a regular visitor of “The President’s Corner”, then you know that counterfeiting has been around since the birth of our nation. Early United States currency had “To Counterfeit Is Death” printed on the notes. This was a serious crime in the years 1759 – 1777 (and beyond). But let me try and get you to think about a new paradigm: “To Counterfeit Is Death – Y2K+10 Version”. The counterfeiters of the new millennium (Y2K) really do kill people. Diluted vaccines, tainted baby formula, prescription drugs with very little (or no) active ingredients at all – these are the lowest of all possible crimes. The counterfeiters seldom see their victims. If they get caught, their fines are minuscule, no more than just a “slap on the wrist”. How do the criminals attack your legitimate products? And more importantly – how do you fight back?

Counterfeiters rip you off by reformulating (dilution or complete fakes) and re-packaging – the replacement of labels with copies. This is huge problem at all levels of the supply chain. Fraudulent labels are used to change the dates of expired product, make false claims or misrepresentations, and inflate pricing. (Pricing can be inflated because a 5 mg dose can be reprinted to claim a 40 mg dose). Quite often these (counterfeited) prescription drugs are administered to very weak cancer or aids patients, and the doctors think the drugs are not working because of the advanced state of the disease. Little do the doctors realize they may be giving their patients diluted or fake medicines. This is why I say “To Counterfeit Is Death”.

Brand Owners Can Fight Back. Tamper Evident Labels (ATL Secur-Lock or Pharma- Void) use substrates that effectively deter re-marking and counterfeiting fraud. This helps prevent a negative economic impact on your brand. The label face stock combines a tamper evident feature with covert authentication. Labels using this substrate are very difficult to remove (they destroy themselves when removed) . . . and can be easily distinguished from a fake.
When combined with ATL’s covert printing, tamper evident substrates can be your cornerstone of a highly protective labeling solution. Tamper evident substrates features include:
- Destructible, paper-based face stock
- Non-reproducible covert security fibers
- Distribution limited to approved secure suppliers

Tamper Evident Substrates Benefits
- Label cannot be removed without visible damage
- Effectively deters re-marking
- Assures product authenticity, or provides or provides simple in-field authentication
- Secure chain of custody
- Covert Authentication
- Tamper Evidence

Twelve Elements Of A secure Supply Chain/ Cold-Chain. Quality Management of the distribution channel begins and ends with the brand owner. Below is the first slide of a presentation I recently made to “Cold Chain Distribution Professionals” at the Philadelphia Convention Center.

I recommended a 12 step approach to strengthen their cold-chains (the logistical system of safely delivering their products). My advice to them is detailed in “The President’s Corner” published October 4th, 2008.
If you would like to discuss your anti-counterfeiting needs, please contact ATL for a no obligation conversation” about your supply chain. We feel that we have solid experience in anti-counterfeiting. I’ll say this over and over – our main focus is not that you buy something from ATL, rather that you learn from knowledgeable people about the perils of counterfeiting.

I will end this segment with the following words of wisdom: “Believe it is possible to solve your problem. Tremendous things happen to the believer. So believe the answer will come. It will.” — Norman Vincent Peale

U.S. Anti-Counterfeiting History – Recent Demoninations And “Layered” Covert Techniques.

January 22nd, 2010

Criminals around the world have found that they can maximize gain with relatively little capital outlay through product fraud. It could be pharmaceuticals, baby formula, toothpaste, brake pads, or toys. The more fraud that we allow to take place, the more patients will be put at risk for counterfeit medicines, or, the more chance that your children (or grand-children) will have toxic lead paint on their toys. The problem goes beyond violation of intellectual property rights. Counterfeiting is not a victimless crime. People die each day from unsafe counterfeited items. The problem is as old as mankind.

Early currency was plainly labeled “To Counterfeit Is Death”. The example below is a 4 Pound Note issued by Pennsylvania in 1777.

The theory behind such harsh punishments was that one who had the skills to counterfeit currency was considered a threat to the safety of the state, and had to be eliminated. Far more fortunate was an earlier practitioner of the same art, active in the time of the Emperor Justinian (527 A.D., mosaic shown below), who got the nickname “Alexander The Barber”. Rather than executing the counterfeiter when he was caught, the Emperor decided to employ his financial talents in the government’s own service.

Modern U.S. Currency has changed many times over the past few years:

With the exception of the one-dollar bill (above), all of these notes are obsolete. This is because the United States Government “Mixes & Rotates” (M&R) its overt and covert techniques to stay one step ahead of the counterfeiters. Shown below are examples of anti-counterfeiting “layered levels” of the “ever-changing” “face” of U.S. notes. You will notice the different colors when compared to the notes that are now obsolete:

Overt and Covert M&R (Mix And Rotate) anti-counterfeiting measures include fine detail with raised intaglio printing on bills. This allows non-experts to easily spot forgeries. As a side note, on coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, this does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold.

For paper bills, in the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. To combat this, national engraving bureaus began to include new (more sophisticated) anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, microprinting, and inks whose colors change depending on the angle of the light. New technology also includes the use of design features such as the “Eurion Constellation” which disables modern photocopiers.

This is very similar in concept to the “Canada Green” overprint on the U.S. 1862 note (used almost 150 years ago). The tint made it very difficult to photograph (complete story and photo are in the President’s Corner dated October 6th, 2008).

To protect your intellectual property, ATL recommends that you educate yourself about overt and covert anti-counterfeiting (anti-piracy) technologies. We also recommend that you take a long look in the mirror. You, as a brand owner, have the power to do the right things. You have the power to protect the public against diversion, dillution, and counterfeiting. By taking these extra steps you will find out something very surprising in the journey – you, in all likelihood, will be saving money in the process.

Bill Cosby said it best: “A word to the wise ain’t necessary – it’s the stupid ones that need the advice.”

Benjamin Franklin’s Anti-Counterfeiting Secrets

January 21st, 2010

Counterfeiting has been in existence since the dawn of civilization. Did you know “The United Colonies” had to deal with counterfeiters? This Four Dollar Bill (November 29th, 1775), printed in Philadelphia by “Hall and Sellers”, had an actual “leaf” in the design on the reverse side. This idea came from Benjamin Franklin. The uniqueness of the leaf made the currency very difficult to counterfeit. In this era, counterfeiting was considered so serious that it was punishable by death, and was so noted on some currencies. Today, as in 1775, counterfeiting is not a “victimless” crime.
Twenty Shilling Note, To Counterfeit is Death. (Philadelphia: Printed by Franklin and Hall, 1759). Paper money printed from ordinary type was easy to counterfeit, but Franklin ingeniously solved that problem by printing pictures of leaves on every piece of money. Counterfeiters could not duplicate or even imitate the fine lines and irregular patterns. In the Twenty Shilling note (shown below), the phrase “To Counterfeit Is Death” is printed directly above the leaf.
If you make something of value, everything from jeans to life-saving pharmaceuticals, counterfeiters are studying your supply (or cold) chain. They will strike where you are most vulnerable. For you to think that you are not at risk is to be in a state of denial.

A very wise man at Abbott Labs, Mike Douma, said: “Don’t be afraid to uncover things that you are not proud of when you look at your products and processes.”

ATL has many overt and covert techniques to provide you with a “layered approach” in brand protection. We strongly recommend a mix and rotate (M&R) approach. In this mode, manufacturers vary the size, location, and amount of anti-counterfeiting “layered” protection. In this manner you are a step ahead, and counterfeiters will be trying to catch up to you.

Article Break: Donfucius’ “Election Whimsy-A Collection…”
“If life were fair, Dan Quayle would be making a living asking ‘Do you want fries with that?’” — John Cleese

U.S. Anti-Counterfeiting History: The 1861-1862 Notes

January 21st, 2010

THE $1 LEGAL TENDER NOTE OF 1862

The face of the 1862 Legal Tender Note has the portrait of Salmon Portland Chase (1808-1873), secretary of the Treasury under Lincoln. Anti-counterfeiting features included two printers, the American and National Note Companies. The very distinctive signature on the front was that of F.E. Spinner. This dollar featured a patented “Canada Green” overprint controlled by ABNCo. (American Bank Note Company). The tint made the bill almost impossible to photograph, because the image would come out too dark.

This was in sharp contrast to CSA (Confederate States of America) currency. The CSA currency was usually plain, and could easily be counterfeited. To combat this, the CSA tried to “enhance” their bills by adding fine artwork.

Between the two notes shown, it would be harder to counterfeit the first note (above) (entitled “Navigation Seated”, year 1861), because the art design was more detailed than the second CSA note shown (below) (entitled “Columbia Capitol”, year 1862). The CSA notes were commonly hand signed and serialized when they were issued. This reduced the chances of fraud.

Article Break – Todays Donfucius quote of the day: “If a pig loses its voice, is it disgruntled?”

Faking It. Nothing Phony About Profits In The Knockoff Business.

January 21st, 2010

President’s notes: The IACC (International Anti-Counterfeiting Coalition) is an organization dedicated to fighting counterfeit goods. This article courtesy of Ambrose Clancy, Long Island Business News.

A couple of years ago a building inspector in North Hempstead was checking out a warehouse when he noticed something was wrong with the back gates. As he walked in to inform the owner about the problem, several Asian women bolted past him, piled into a van and sped off.

Faking It

Photo above. Fake goods. Bad quality and very bad for the economy. Why? Counterfeiters do not pay taxes, but you do.

Inside were boxes of Timberland boots. Well, the label said Timberland. Actually they were cheap knockoffs manufactured in China and smuggled into the Port of New York/New Jersey.

“They were moving thousands and thousands of boots out of there,” said Detective Sgt. Thomas Riley of the Nassau County Police Department.

Trademark counterfeiting is ” where a brand name is essentially stolen and slapped on a cheaper and vastly inferior copy”. This is big business. On Long Island, fakes are sold at nearly every flea market, in carwashes, delis, mom-and-pop stores and at kiosks in the malls. They change hands at shopping parties in people’s homes and from the trunks of cars by so-called “bag ladies.” These are not homeless women but crooks hawking what on first glance looks like a Louis Vuitton bag for a quarter of the price, but in reality is a inferior product, doomed to fall apart in six months.

Figures on the size of the counterfeit market are murky. More than $600 billion has been mentioned as the amount of cash generated by worldwide counterfeiting of apparel, luggage, handbags, sunglasses and other designer goods.

But Susan Scafidi, a law professor at Fordham University and an expert in intellectual property law, said all figures are suspect, since counterfeiters don’t file with the Internal Revenue Service.

“The $600 billion is a vague number taken from estimates that something like 7 percent of world trade is counterfeit,” said Scafidi, who also runs the up-to-the minute blog Counterfeit Chic, tracking the fashion industry’s battle against fakes.

Bob Barchiesi, president of the International Anti-Counterfeiting Coalition, had no problem with the $600 billion global figure, adding that the total for the United States is a quarter of a trillion dollars. Formed in 1979, the IACC works with investigators and law firms, lobbies politicians and gets the word out.

“This is a serious problem and not getting any better,” said Barchiesi.

Photo below. Counterfeits are a world wide problem, including fake baby formula. Hong Kong’s two biggest grocery chains removed all milk made by the leading Chinese dairy after traces of a chemical that killed and sickened babies was found in products in mainland China. (AP Photo/Kin Cheung)

Above: Logo Of Product Being Removed From Chinese Stores

Above: Logo Of Product Being Removed From Chinese Stores

The criminal enterprises began in the late 1960s when fashion designers figured out that copyright and patent laws don’t protect designs, Scafidi said. As a response, designers placed visible logos on garments and bags, in part because the logos were copyright protected, even if the designs were not.

But then the counterfeiters moved in, copying those logos in an effort to trick buyers into believing their wares were the real thing.

Fifteen years ago when China became a manufacturing powerhouse, the illegal trade boomed, said Barchiesi, who estimated that 85 percent of trademark counterfeiting comes from China.

The goods are moved in shipping containers, mislabeled from electrical equipment to actual clothing, Riley said. Some clever importers recently moved winter coats with a Chinese label and when the New York contact picked them up, the Chinese labels were peeled off to reveal a North Face logo, he added.

The classic crime success story is very low risk and very high reward. Trademark counterfeiting is all of that, said Barchiesi, adding that the illegal trade is safer and more profitable than importing heroin.

“The low risk is the judicial system doesn’t levy out significant penalties for this type of crime,” he said.

Trademark counterfeiting law in New York has two degrees of felony offense, with a second degree charged if more than $1,000 worth of merchandise is sold, according to Deputy Inspector James Burke, commanding officer of the Suffolk County Police Department’s District Attorney Squad.

“But the real rub is that a first-degree offense is only when $100,000 worth of illegal goods are sold,” Burke said. Stay below $100,000 and if you’re convicted, you can expect one to four years in jail. Cross the line and it’s five to 15.

Another low-risk factor for criminals is diminishing resources in law enforcement, Burke said. There is no trademark counterfeiting squad in any Long Island department. “Violent crime trumps trademark counterfeiting every time,” Burke added.

Law enforcement mainly works with companies, trade associations and private investigators to fight the fakes, he said.

Investigator Andrew Oberfeldt has been ferreting out counterfeiters on Long Island since 1991 for the Manhattan firm Abacus Security & Investigation. He works mainly on tips from jealous competitors.

“Informants are motivated by greed and envy,” Oberfeldt said.

He’s seen fake goods in beauty parlors, gas stations, small clothing and shoe stores. Bag ladies go to Manhattan’s Chinatown twice a month and load up on bogus handbags, he said. “They drive around the Island with stuff in their trunk and sell it where people work,” he added. If they know the receptionist at a doctor’s office, for example, they will drop by and hustle the bags in the waiting room.

It has become so commonplace that many people don’t consider it a crime. Oberfeldt had a friend in the Nassau County Police Department who was approached by a secretary at headquarters offering to sell designer clothes. He said, “Sure, lead the way,” the investigator said. “Out in the parking lot, he took one look at the stuff and locked her up.”

To those who say trademark counterfeiting is a victimless crime, all experts beg to differ. Not only do legitimate businesses suffer, but taxes are never paid on the goods sold. (Estimates on annual unpaid taxes approach $1 billion.)

Buying these goods supports violent criminals. Buying a knockoff pair of designer jeans also supports Third World sweatshops, where children labor for slave wages in appalling conditions.

Going for an illegal bargain can also be physically dangerous, Sgt. Riley said, referring to the brisk trade in fake electronics products.

“Buy a replacement cord for your coffee maker and if it’s counterfeit you’ve got a fire hazard,” he said.

game-boy-exploding

Photo above. Fake goods can hurt you. Here is an exploding counterfeit battery from a hand held video device. Cell phones are also at risk.

Another hazard could be related to knockoff Major League Baseball items. Jerseys and caps for adults and children are often processed with toxic chemicals and contain no flame-resistant elements.

According to MLB spokesman Matt Bourne, in the past five years organized baseball has seized more than four million pieces of counterfeit goods.

On a slow morning last week at the mammoth indoor Attitas Flea market in Sayville, Mets home jerseys were going for $35, more than half off the MLB price.

Genuine MLB merchandise is identified by a hologram attached either to the product or to a hang tag. Some jerseys at Attitas had the hologram, most did not. When someone brought the lack of holograms to the merchant’s attention, he said, “All I know is these are official.”

He then wasn’t interested in continuing the conversation.

zp-005-fake-and-real-hologram

Photo above. Fake and real hologram. Once a counterfeiter targets a product, a fake hologram can be made within 24 hours.

Rip-off artists

A crime related to counterfeiting trademarked goods is music piracy, which is swamping the recorded music industry. The Recording Industry Association of America said pirates cost the music industry $12.5 billion annually and that 71,000 jobs have been lost over the past five years. Thieves have also cost the government $422 million in unpaid taxes.

Although it’s a worldwide problem, there are homegrown illegal manufacturers as well, mostly involved in pirating music with CD “burner factories” set up in office parks on Long Island and funded in some instances by organized crime, said Bob Barchiesi, president of the International Anti-Counterfeiting Coalition.

The music pirates have made the music makers change strategies. Since 2003, music companies sued 35,000 individuals for copying music online. Last December, however, they waved the white flag.

This was a combination of ineffectiveness and disastrous public relations. The practice of suing teenagers and single moms came across as bullying.

Instead, the RIAA asked for help from the Internet service providers to stop music piracy and a preliminary agreement has been reached. When file sharing is discovered, RIAA will inform the provider and the provider will then tell the offending customer to stop. If the customer is unwilling to do so, the provider can then cut off access to the offender.

Did You Ever Wonder…

January 20th, 2010

Why the sun lightens our hair, but darkens our skin?

Why don’t you ever see the headline ‘Psychic Wins Lottery’?

Why ‘abbreviated’ is such a long word?

Why is it that doctors call what they do ‘practice’?

Why is lemon juice made with artificial flavor, and dish washing liquid made with real lemons?

Why is the man who invests all your money called a broker?

Why is the time of day with the slowest traffic called rush hour?

Why isn’t there mouse-flavored cat food?

Why didn’t Noah swat those two mosquitoes?

Why do they sterilize the needle for lethal injections?

Why they don’t make the WHOLE PLANE out of that stuff they use to make the indestructible ‘black box’?

Why don’t sheep shrink when it rains?

Why are they called apartments when they are all stuck together?

If con is the opposite of pro, is Congress the opposite of progress?

If flying is so safe, why do they call the airport the terminal?

Mark Twain’s Uncommon Comments.

January 11th, 2010

“If you tell the truth you don’t have to remember anything.”

“Drag your thoughts away from your troubles…by the ears, by the heels, or any other way you can manage it.”

“Don’t go around saying the world owes you a living; the world owes you nothing; it was here first.”

“You can’t depend on your eyes when your imagination is out of focus.”

“I’ve seen many troubles in my time, only half of which ever came true.”

“As to the Adjective; when in doubt, strike it out.”

“The best way to cheer yourself up is to try to cheer somebody else up.”

“The man with a new idea is a crank until the idea succeeds.”

“Always do right; this will gratify some people and astonish the rest.”

“Name the greatest of all the inventors. Accident.”

“A man’s character may be learned from the adjectives which he habitually uses in conversation.”