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Donfucius Says: April 23rd, 2014. Random Bits Of Wisdom.

  1. “As a child my family’s menu consisted of two choices: take it or leave it!” — Buddy Hackett
  2. “Nature gave men two ends – one to sit on and one to think with. Ever since then man’s success or failure has been dependent on the one he used most.”Donfucius
  3. Preach the Gospel at all times, and when necessary use words.” — Aaron Rogers Quoting Francis of Assisi
  4. “Diplomacy is the art of saying “Nice doggie” until you find a rock.” — Will Rogers
  5. “Before they invented drawing boards, what did they go back to?” –Patti Molloy
  6. “The way we’re going… if I called up another pitcher, he’d just hang up the phone on me.” — Any Brewers Manager
  7. “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
  8. “We’re fools whether we dance or not, so we might as well dance.” — Old & Wise Japanese Proverb
  9. “Blessed are the cracked – for they are the ones who let in the light.” — Donfucius
  10. “Good judgment comes from experience, and a lot of that comes from bad judgment.” — Will Rogers
  11. “I don’t mind how much my Ministers talk, so long as they do what I say.” — Margaret Thatcher

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Archive for May, 2011



Combating Intellectual Property Theft

May 26th, 2011

A Law Enforcement Priority

Story courtesy of John Morton, Director, U.S. Immigration and Customs Enforcement (ICE)

z joe morton 1

Photo above: John Morton at a February press conference.

Intellectual property protection drives research and development in the private sector. These days, however, the R&D calculus can look like a losing proposition as large-scale counterfeiting and online digital theft badly undermine traditional market forces. Consider that a pharmaceutical company may spend over one billion dollars to develop the next “miracle drug,” only to see counterfeits of the medication appear on the market the year after its release. Similarly a film studio may invest hundreds of millions of dollars in a single film only to find free copies of the movie on the internet, even prior to official release in some british english theatres. Fashion houses and luxury brand manufacturers can easily find exact replicas of their products at a boot sale market or on the internet.

It is beyond dispute that global intellectual property theft results in billions in lost revenue, taxes, and employee benefits. Innovation, consumer safety, and economic growth are sacrificed in the name of criminal profit. And yet debate still rages as to whether law enforcement should take action against counterfeiting and online theft. As the head of ICE, I direct the U.S. law enforcement agency that investigates much of the intellectual property theft occurring in or through the United States. As a byproduct, I am criticized by some for the aggressive strategy my agency has undertaken to protect intellectual property rights because it is thought to be a matter reserved for business, not government. While neither I, nor the agents within our agency, will waver one bit from our mission, it is appropriate to address the arguments of our opponents.

Photo below: counterfeit goods.

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A recent study published in the British Journal of Criminology suggests that counterfeiting of luxury fashion goods is a relatively minor concern and that law enforcement agencies should refrain from pursuing these cases. While the authors of the study seem well intentioned, their conclusion leads to the wrong answer. By focusing on counterfeiting of “luxury fashion goods,” the authors understate the scope of the problem and ignore the proven links between counterfeiting and organised crime. In addition, creating a dichotomy between types of counterfeit goods — those “worthy” of government protection and those that are not — creates an inappropriate role for government to deem certain companies or business less important.

Finally, it ignores the reality that, as a whole, aggressive enforcement against counterfeiting and online digital theft is the “rising tide that lifts all boats.” Simply put, the counterfeiting of all trademarked and copyrighted goods amounts to a significant form of theft. This crime goes far beyond luxury goods and high-end apparel to encompass software, electronic components, DVDs, pharmaceuticals, automotive parts and much more. As trafficking in these goods has grown, it has created an opportunity for criminal organisations to enter the field. And the criminal organisations have readily seized that opportunity.

Photo below: counterfeit drugs.

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The link between intellectual property theft and organised criminal activity is well established. A 2009 study by the RAND Corporation showed how the same criminal groups that engage in intellectual property theft are involved in other serious crimes, such as extortion, drug trafficking, human smuggling and trafficking, and violent crime. Our law enforcement investigations have borne out the same conclusion. Moreover, attempting to separate “luxury fashion goods” from the larger realm of counterfeit goods sets up a false distinction. It is unlikely that criminal and terrorist organisations will pick and choose the types of counterfeit items in which they traffic. Instead, they will traffic in those goods that provide the greatest profits at the lowest risk-whatever makes it easiest for them to make a profit and fund further criminal activities. In our law enforcement efforts, we have come across counterfeit air bags to be installed in cars, toothpaste filled with chemicals found in anti-freeze, and even fake parts for radios intended to allow the military to communicate secretly on the battlefield. Worse, as criminal organisations realize the profits to be made, they don’t pay taxes that would otherwise be paid on legitimate goods; they don’t fund workers’ pensions, or invest in the next “miracle drug.” Criminals merely wait for their next parasitic venture: illegally copying and producing someone else’s innovative idea.

Multilateral and Multiagency Enforcement

Fortunately, law enforcement around the world is developing a clearer sense of the dangers posed by intellectual property theft. Some of our most successful intellectual property cases have been multilateral investigations conducted across international boundaries, in a true spirit of partnership. Like BritishAmerican Business, we have learned that transatlantic partnerships reap significant, mutually beneficial rewards. For example, in March 2010, nine individuals were indicted in a conspiracy to smuggle into the U.S. counterfeit shoes, handbags and watches manufactured in Malaysia and China.

The indictment resulted from an investigation between U.S. Immigration and Customs Enforcement (ICE), the City of London Police and the United Kingdom Border Agency. During the investigation, the defendants arranged with undercover agents to smuggle shipments of counterfeit products into the U.S. The defendants also paid the undercover agents to ship three containers of counterfeit goods to the UK. In addition to the smuggling fee, the indictment alleges that the co-conspirators often paid an additional amount of money which was to be “laundered” through the undercover agents. As part of the investigation, the London police arrested seven suspects and seized 50,000 items of counterfeit clothing, believed to be the largest ever counterfeiting case in U.K. history.

In the U.S. we realise that no one law enforcement agency can tackle this problem alone. That’s why the National Intellectual Property Rights Coordination Center, commonly known as the IPR Center, is leading the effort to make aggressive, effective IP theft enforcement a reality. The IPR Center, led by ICE’s Homeland Security Investigations (HSI), brings together 14 U.S. agencies, along with INTERPOL and the governments of Mexico and Canada to tackle all forms of IP theft. The IPR Center’s mission is to be “one stop shopping” for rights holders who are victims of IP theft by making available the resources of multiple agencies under one roof.

21st Century Enforcement

We are also attacking IP theft operating in cyber space. The internet is one of the great advances of our time and will shape our lives and those of our children without any doubt. But cyber IP thieves are increasingly using the web to market and sell counterfeit and pirated goods everything from knockoff luxury goods to pirated movies, to fake pharmaceuticals. These investigations present unique challenges. The thieves are often overseas, sometimes in countries without robust anti-counterfeiting regimes. And the increasing use of multiple servers complicates the collection of electronic evidence, requiring countless hours of computer forensics work. In June 2010, the IPR Center, ICE’s HSI and U.S. prosecutors announced the most aggressive enforcement action against online counterfeiting and digital theft ever conducted through Operation “In Our Sites.”

In the course of this operation, we have seized domain names of websites illegally offering copyrighted films and television programs as well as selling counterfeit electronics, luxury goods, software, games and items that pose a threat to health and safety. Using judicially-ordered seizure warrants and posting an electronic seizure banner on offending websites, we have observed an unprecedented level of public interest and awareness. How do we know this? One measure is that the seizure banner has received over 36 million hits as a result of these four successive rounds of seizures over eight months. Combined with the fact that over 80 illegal websites have voluntarily been taken down by their operators, it is clear we are making an impact through Operation In Our Sites.

Our intellectual property enforcement on the internet has been alternately praised by victim rights holders, criticised by some, and watched with curiosity by many. However, I remain firmly convinced that government exists, in great part, to protect private property from theft. Intellectual property defines private property in industry. Law enforcement needs to combat intellectual property theft at all levels Crime is crime and given the stakes, law enforcement should not turn a blind eye to this pernicious form of theft. One reason for the success of enforcement actions like Operation In Our Sites is the IPR Center’s efforts to foster partnerships with the private sector. We recognise that law enforcement cannot fight IP theft alone.

To facilitate productive partnerships, the IPR Center launched Operation Joint Venture, which supplies both industry and law enforcement with valuable information about our efforts to combat the importation of hazardous and counterfeit products, and provides you with a point of contact in the field that you can use to provide us with leads and tips. If you know about efforts to compromise your company’s intellectual property rights, let us know. Often our best cases often start with leads industry provides. Through our combined efforts, by collaborating and sharing information, we can have a resounding impact on IP theft.

John Morton is director of U.S. Immigration and Customs Enforcement (ICE), the largest investigative agency in the Department of Homeland Security. ICE leads the National Intellectual Property Rights Coordination Center (IPR Center), a multi-agency task force in Arlington, Virginia, dedicated to combating intellectual property theft.

ICE Probe Targets Major Los Angeles Chinese Video Store

May 24th, 2011

Story courtesy of the IACC (International Anti-Counterfeiting Coalition).

Two arrested in ICE probe targeting major LA-area Chinese video store. Tens of thousands of movie DVDs bearing counterfeit Dolby Digital trademark seized.

LOS ANGELES. The owner and manager of a popular Monterey Park, Calif., video store were arrested Monday morning by agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) on allegations they illegally imported and sold tens of thousands of Chinese movie DVDs bearing a counterfeit Dolby Digital trademark.

Wei Sheng “Jackie” Chen, 46, of Arcadia, Calif., owner of Tema Media, Inc., and the store’s manager, Dong Qun Lin, 40, of Alhambra, Calif., are charged in a federal criminal complaint with trafficking in counterfeit goods. They are expected to make their initial appearance in federal court here Monday afternoon. The charges carry a maximum possible sentence of up to 10 years in prison. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of California.

Monday’s arrests are the latest developments in an ongoing ICE HSI investigation that began in Sept. 2010 after U.S. Customs and Border Protection (CBP) officers intercepted an air freight shipment containing more than 1,700 DVDs from Hong Kong addressed to Tema Media. CBP import specialists determined the Dolby trademark stamps on those movie DVDs were counterfeit.

“This seizure is a prime example of the hard work CBP officers and import specialists perform daily in combating the illegitimate trade in counterfeit goods at Los Angeles International Airport,” said CBP Acting Director of Los Angeles Field Operations Carlos Martel. “CBP remains committed to working with our federal, state and local law enforcement partners to protect American consumers against products that hurt American businesses.”

In January, HSI agents executed a federal search warrant at Tema Media, located at 151 E. Garvey Ave., where they seized nearly 25,000 Chinese DVDs bearing counterfeit Dolby Digital trademarks. Had the seized DVDs been genuine they would have had an estimated retail value of more than $1 million. Subsequent investigation revealed that Tema Media had imported approximately 85 shipments of Chinese DVDs in a five-month period from March through Oct. 2010.

“Our investigation indicates this retailer supplied clients not only in California, but also in Nevada,” said Claude Arnold, special agent in charge for ICE HSI in Los Angeles. “American consumers need to remember, the sale of counterfeit products like this is not a victimless crime. Counterfeiters don’t invest in product development; they don’t put a premium on product quality or safety; all they do is get rich at America’s expense.”

As the largest investigative arm of the Department of Homeland Security, ICE’s HSI plays a leading role in targeting individuals and criminal organizations responsible for producing, smuggling, and distributing counterfeit products. In fiscal year 2010, ICE and CBP intellectual property rights enforcement efforts led to nearly 20,000 seizures, a 34 percent increase compared to the previous year. The total value of those goods, based upon the manufacturer’s suggested retail price had the goods been genuine, $1.4 billion. Perhaps even more troubling, increasingly the commodities seized in intellectual property rights cases are products that pose potential risks to public safety and security, including critical technology components and counterfeit pharmaceuticals.

A Cup Of Tea For Daddy.

May 19th, 2011

daddys little girl

One day a little girl’s mother was out, and dad was in charge of his daughter. She was maybe 2 1/2 years old. Someone had given her a little ‘tea set’ as a gift, and it was one of her favorite toys.

Dad was in the living room engrossed in the evening news when his little girl brought him a tiny cup of ‘tea’, which was just water. After several cups of tea and lots of praise for such yummy tea, mom came home.

Dad made her (the mom) wait in the living room to watch his little girl bring him a cup of tea, because it was ‘just the cutest thing!’ Mom waited, and sure enough, the sweet little girl came down the hall with a cup of tea for Daddy; and she watched him drink it up.

Then mom said, (as only a mother would know),”Did it ever occur to you that the only place she can reach to get water, is the toilet?”

Bill Would Bag Phony-Purse Buyers.

May 13th, 2011

Story courtesy of John Doyle from “The New York Post” and the IACC (International Anti-Counterfeiting Coalition).

Pretty soon, it could be more than just the fashion police who have a problem with your shoddy knockoff bag, like a bogus Louis Vuitton.

Buyers could face a year in jail or a $,1000 fine under a proposed bill by a city councilwoman fed up with cheapskate tourists and Big Apple residents flooding her district in search of fake designer merchandise.

“We don’t want to be known as the place to come to get counterfeit goods,” said Councilwoman Margaret Chin, whose Chinatown district is ground zero for counterfeiters.

Under Chin’s bill, which is being introduced Thursday, shoppers caught buying any counterfeit product could be jailed or slapped with a fine of $1,000 — a little less than the price of Marc Jacobs’ frequently copied Baroque Quilting Mini Stam bag, which retails for $1,250.

“It’s a very big problem,” Chin said of the counterfeit market. “People are still coming, and the industry is growing, and we have to stop the demand. We need people to know that they are feeding this demand.”

Several of Chin’s colleagues have expressed support for the bill, and she already has five co-sponsors.

The punishment might seem draconian, but it’s necessary to curb the growing problem, she said.

She pointed out that the money that counterfeiters rake in often funds other nefarious activities, such as terrorism and unsafe child-labor practices.

But try telling that to bargain hunters. Christine Gambino, 21, of Staten Island — who was in Chinatown yesterday sporting a fake Louis Vuitton handbag that cost her $40 — vowed to continue to hit the neighborhood for counterfeit goodies. “I’ll take a risk and sacrifice to look good and pay less,” she said.

Erma Charles of Brooklyn said she knows it’s wrong, but she can’t resist. “Everyone steals,” the teacher said as she walked in Chinatown.

If the law passes, Chin said, she’ll work to blanket problem areas like Chinatown with signs warning people about the new rules. The law specifically states that buyers should know their goods are counterfeit because of the low price and location where they are buying them.

But don’t worry if you’re strolling down the street swinging your fake Vuitton and the police pass by. You have to be caught actually buying the goods to be charged, according to the proposal. Surprisingly, legit merchants — who could lose street traffic if the ubiquitous black-market vendors were to leave — applauded the proposal.

Sandy Lui, manager of Optical 88 on Hester Street, acknowledged that she might lose customers, since many people come to Chinatown specifically to buy knockoffs, but she said she supports a crackdown on principle. “It’s wrong to sell [fake goods]. I don’t like people coming in here assuming we also sell fake stuff,” she said.

Cops — who have struggled to stop the growing problem — said the law would be difficult to enforce. “It’s never going to fly,” one officer said.

Additional reporting by Rebecca Rosenberg and Jennifer Fermino.