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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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Posts Tagged ‘knockoffs’



Economic Indicator: Even Cheaper Knockoffs.

August 13th, 2010

by Stephanie Clifford – Courtesy of “The New York Times”.

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Photo Above: On Broadway in New York, shoppers can pick up items of questionable authenticity, and not just of the top luxury brands.

After years of knocking off luxury products like $2,800 Louis Vuitton handbags, criminals are discovering there is money to be made in faking the more ordinary – like $295 Kooba bags and $140 Ugg boots. In California, the authorities recently seized a shipment of counterfeit Angel Soft toilet paper.

The shift in the counterfeiting industry, which costs American businesses an estimated $200 billion a year, plays to recession-weary customers looking for downmarket deals, the authorities say. And it has been fueled in part by factories sitting idle in China. Almost 80 percent of the seized counterfeit goods in the United States last year were produced in China, where the downturn in legitimate exports during the recession left many factories looking for goods – in some cases, any goods – to produce. “If there is demand, there will be supply,” said John Spink, associate director of the Anti-Counterfeiting and Product Protection Program at Michigan State University. In China, he said, “It’s all of a sudden them saying, ‘We have low capacity. What can we make?’ ”

The answer is increasingly knockoffs of lesser-known brands, which are easy to sell on the Internet, can be priced higher than obvious fakes, and avoid the aggressive programs by the big luxury brands to protect their labels, retail companies and customs enforcement officials say. The results: Faux Samantha Thavasa bags for $113 and Ed Hardy hoodie sweatshirts for $82.50. And, bizarrely, imitations that are more expensive than the real ones: In 2007, Anya Hindmarch sold canvas totes that said “I’m Not a Plastic Bag” for $15. Now fakes are available on the Web for $99. “If it’s making money over here in the U.S., it’s going to be reverse-engineered or made overseas,” said Jonathan Erece, a trade enforcement coordinator for United States Customs and Border Protection in Long Beach, Calif. “It’s like a cat-and-mouse game.”

The traders in mid-price fakes are employing another new trick: by pricing the counterfeits close to retail prices – which they can do when the original product is not too expensive – they entice unsuspecting buyers. Any savvy shopper, for example, knows a Louis Vuitton bag selling for $100 cannot be the real thing. But when NeimanMarcus.com, an authorized retailer for Kooba bags, sells them for $295, and a small Web site sells them for $190, a deal-hunting consumer could think she has scored a bargain. (She hasn’t. The $190 bag is a fake.) “If the price points are somewhat close, some consumers get duped into believing they’re getting a real product,” said Robert Barchiesi, president of the International AntiCounterfeiting Coalition, a trade group. “They might be looking for a bargain, but a bargain to buy real goods.”

Photo Below: At the Port of Long Beach, an officer at the Customs and Border Protection office inspects a toy for entry into the country.

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The counterfeiters are also lifting photos and text from legitimate Web sites, further fooling some shoppers. “The consumer is blind as to the source of the product,” said Leah Evert-Burks, director of brand protection for Ugg Australia’s parent company, the Deckers Outdoor Corporation. “Counterfeit Web sites go up pretty easily, and counterfeiters will copy our stock photos, the text of our Web site, so it will look and feel like” the company site, she said.

While all of it is illegal, the authorities do not publish statistics on what brands’ products are being counterfeited. But designers and trade experts said the downmarket trend in counterfeiting became more noticeable over the last year, as counterfeiters got more inventive. The field is big: the total value of counterfeit goods seized by United States customs officials increased by more than 25 percent each year from 2005 to 2008, using the government’s fiscal calendar. In fiscal 2009, as imports over all dropped by 25 percent, the value of counterfeit products seized dropped by only 4 percent to $260.7 million. The official statistics capture only a piece of the problem, companies and experts say, because so many counterfeiters market directly to customers on the Internet and many of those sales go undetected by the authorities. “Online is much harder” to patrol and enforce, said Todd Kahn, general counsel for Coach, the handbag and accessories company. That is particularly true for smaller brands, as Anna Corinna Sellinger, co-founder and creative director of the New York clothing and accessories company Foley & Corinna, learned.

A couple of years ago, she began checking out which Foley & Corinna items were selling on eBay. Her city tote, which now retails for $485, was a popular item, but on some listings “there was something off – it’s a color I never did, or a leather I never did,” she said. As other sites proliferated, and Ms. Corinna Sellinger noticed more and more Internet fakes, she stopped looking altogether. “It’s just too frustrating,” she said. “You can try to do something, but it’s so big and so fast.”

While Ms. Corinna Sellinger basically had herself and a computer to patrol for fakes, big companies use legal teams who train customs officials on the nuances of their product, monitor the Web, ask Internet service providers to take down copycat sites and file lawsuits against sellers. (The brands only go after sellers; the law in the United States does not prohibit consumers from buying counterfeit products.) Ugg Australia, the popular boot brand, developed a full enforcement program after it realized how prevalent copies of its boots were. In 2009, 60,000 pairs of boots were confiscated by customs agents globally, Ms. Evert-Burks said. In the same year, the company took down 2,500 Web sites selling fake products, along with 20,000 eBay listings and 150,000 listings on other trading sites like Craigslist and iOffer. That’s despite the relatively low price of real Ugg boots, which cost around $140 for a basic model. Under similar programs, Versace won $20 million in a recent lawsuit against counterfeiters, while Gucci, Louis Vuitton and other luxury brands have been pursuing similar cases. Coach last year announced “Operation Turnlock,” in which it would file civil lawsuits against counterfeiters, and it has sued 230 times, Mr. Kahn said. At Liz Claiborne Inc., which owns brands like Juicy Couture and Kate Spade, the company has gone after 52 Web sites selling counterfeits, and removed 27,000 auction listings so far this year.

Photo Below: Counterfeit boots are destroyed in Australia after a court sided with Deckers Outdoor, owners of the Ugg boot line.

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The lesson for many counterfeiters has been that they have a better chance of getting away with it if they copy smaller brands like Foley & Corinna – even though Foley & Corinna, while popular with celebrities and fashion types, is not widely recognized as a status brand and its bags can be had for as little as $126 on the brand’s own Web site. “Once it’s out there a lot, people won’t even want the real one because then they’re like, ‘People are going to think it’s fake,’ ” Ms. Corinna Sellinger said. “It takes the product away from the designer.”

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.

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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.

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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.

Ringo-John-George-Paul. Counterfeit Beatles Albums.

October 16th, 2008

Above: Two Beatles albums from the “Capitol” days. Did you know there were thousands of counterfeit Beatles albums before Capitol (B.C.)?

I came across an absolutely fascinating article written by Frank Daniels in 2002. It was all about “The Beatles” early albums B.C. (Before Capitol). As I read this I wondered: “If counterfeiters will go through these extreme measures to flood the market with fake records, then I had better be very careful when buying medicines or safety related items.” Here are parts of Mr. Daniels writings:
Fakes and Fantasies
A counterfeit or fake record is one that attempts to pass itself off as a genuine record that was actually issued by a legitimate record company at one time. Sometimes, counterfeits do not look exactly like the genuine copies that they mimic but are slightly different. A fantasy record or sleeve is one that pretends to be a rare and otherwise unknown item. However, no legitimate record company ever pressed or printed an item like that one.

A pirate copy of a record is a counterfeit that is made while the legitimate record is still selling. These lower quality “knock-offs” are intended to dupe people into buying them at a lower price than the genuine record album would cost. While Vee Jay and Swan (Record Companies) were still producing Beatles records, there was certainly no need for anyone to make “pirate,” “counterfeit,” or “fantasy” records on those labels. However, during the late 1960′s demand arose for Beatles records on those two labels. Counterfeiters filled that void, making counterfeit copies of “Introducing the Beatles” and of the Swan “She Loves You” single. The 1970′s and ’80′s saw even more counterfeits being circulated. Since there were no legitimate copies selling, these counterfeits are — strictly speaking — NOT “pirate” copies, even though they were not being sold as “collectors’ items.”

“She Loves You”/”I’ll Get You” – (Counterfeit) Swan 4152: white label with red print or black label with silver print.

It has been believed for some time that “thin print” copies with quotation marks were reissues available in 1966 and 1967 (just before Swan Records folded in 1967). These rumors are false, for Swan had a contract to release the single for two years and stopped pressing “She Loves You” in 1965. There are two common issues of these fakes: (1) The matrix numbers are stamped into the trail-off by machine. Unlike the genuine Swan issues, the matrix numbers are only 1/16″ high, and neither the “Reco-Art” nor “Virtue Studio” company information appears in the matrix. (2) The matrix numbers are etched by hand, otherwise as above.

The “stamped matrix” fakes have been promoted as reissues. Even though these fakes are almost as common as the ‘black label’ issues and are not genuine, public opinion for years that they were genuine has caused them to sell for $40 to $50 each. The “etched matrix” fakes have been recognized as counterfeits and usually sell for under $10.
Some counterfeit/fantasy copies of the white and red label “She Loves You” were pressed in red vinyl. These tend to sell for about $20, twice as much as the more common black vinyl counterfeits.

“Please Please Me” – “Ask Me Why” – (Fantasy) Vee Jay 498 sleeves: Since the Beatles were complete unknowns in the USA in early 1963, Vee Jay Records never issued a picture sleeve for their first release. Bootleggers have filled the void by producing fantasy sleeves. Each of the above sleeves first appeared after 1980. The first sleeve, shown above, features an early photo of the group. Like the actual single, the sleeve misspells “Beatles,” using two T’s. There are promotional markings on the reverse side, as though the sleeve had accompanied original white/gray label promo copies. In reality, the sleeve came about 20 years too late.

The second sleeve sports four drawings of the Beatles that Vee Jay actually did produce. These are the drawings that appear inside “Songs, Pictures, and Stories”. On this fantasy sleeve, the brackets logo was used, even though Vee Jay hadn’t come up with it in early 1963. The group’s name is also spelled correctly.

“From Me to You” – “Thank You Girl” – (Fantasy) Vee Jay 522 sleeves. As with the above single, there were no original picture sleeves accompanying the Beatles’ second single for Vee Jay. Bootleggers have produced at least two fantasy sleeves for the record. Again, both sleeves are of recent origin. The first sleeve is a pale imitation of the genuine sleeve to Vee Jay 581, with the photograph flipped around. The second sleeve uses the photo from the 1982 re-release of “Love Me Do.” This second-generation picture is blurry.

“Please Please Me” – “From Me to You” -(Counterfeit) Vee Jay 581 sleeves. The first of these sleeves is actually a counterfeit/fantasy item, not intended to fool someone but to simply occupy the missing place of a rare item in someone’s collection. The sleeve is clearly unlike the genuine sleeve, for the group’s name appears here in green (above photo, top) and in red on the original sleeve. The sleeve on the bottom is a different matter! Look at the top (opening) of the sleeve. Genuine copies of the VJ 581 sleeve have the slick cut so that the corners at the top are slightly rounded; copies that have the corners cut square are counterfeits.

Clearly Counterfeit Covers
Let’s first look at some fakes that are clearly identifiable just from the cover:

The cover is ugly and yellowed. The photograph is clearly a second-generation copy. The word “STEREO” is printed on the front cover (since the counterfeiters did not actually own a stereo cover). These fakes date to the late 1960′s.

Below: Here’s another “easy loser.” There are no genuine copies of the LP with a brown border around the album. Most likely, these were semi-fantasy items that were never intended to pass themselves off as genuine. Since they first appeared in the mid-to-late 1970′s, some people have forgotten that they are fakes.

Clearly Counterfeit Labels
The vast majority of counterfeit copies of “Introducing the Beatles” cannot be easily identified by their covers alone. Chances are, though, if it claims to be in stereo and claims to have “Love Me Do” in the titles on the back, it’s a phony. The best test to determine whether your item is genuine is to look at the symbols that are stamped into the matrix of the record. Since this can be difficult — even confusing for some — we’ll take the next best route: to look at the labels.

Above: This is an all black label with large brackets. These were first introduced in the late 1970′s, along with fakes of “Songs, Pictures, and Stories” and “Hear the Beatles Tell All”. The label is of higher quality than some of the “rainbow label” fakes, but since the artist name and title are separated by the spindle hole, it’s a clear fake. Also, during the 1960′s, Vee Jay never released a “large brackets” version of an “all black label.” Finally, these usually come in covers claiming that the record is in stereo; the label does not say “STEREO” — another sign of a counterfeit. Some “all black” counterfeit labels from the same period list “Ask Me Why” and “Please Please Me” — since the counterfeiters did not own copies that had “Love Me Do” and “PS I Love You” on them.

Above: This style counterfeit label was very popular — some copies date back to the 60′s. Notice the thin print on the catalog number. Like the other fakes, the mono catalog number is shown on the label; the bootleggers did not have stereo copies to copy from. That’s why the songs are in mono, too. Here, we see again the telltale sign — that the word “STEREO” is absent, and the title and artist name are separated by the spindle hole. Either one of these is the sign of a fake.

Above: By the late 1970′s, some copies of the same style fake as the one above were being made sloppily. Notice that the label is not the right size. Part of the color band is missing around the label’s edge. Otherwise, it exhibits the same counterfeit characteristics as the label above.

Above: This counterfeit, from the early 1980′s, looks slightly better. The colors in the color band are more realistic. However, the word “STEREO” is still missing, and the cover this record came with claimed it was in stereo. It’s also got the title and artist’s name separated. Another fake.

Above: Here’s another fake, again slightly more professional looking. This one came out during the mid 1980′s. Once again, though, we have a brackets label copy without “STEREO” (and the cover promised us stereo). And even more clearly, the title and artist’s name are separated by the spindle hole in the middle. A disappointing effort.

Above: This counterfeit was color photocopied from a genuine MONO copy of the LP, so the title and artist’s name are in the right place. The colors are strange, but it would fool most people. It came in a “stereo” cover, though, so again something is wrong. Notice that the color green is missing from the label. The record also lists “Please Please Me” and “Ask Me Why,” since that’s the kind of genuine copy that was being photocopied. The label also has a large pressing ring, a kind not found on genuine 1964 releases.

Fast Forward To 2008

Many thanks go to Mr. Frank Daniels for his highly interesting work on different Beatles counterfeits. As he pointed in 2002, counterfeiters were running wild when a buck was to be made. Today, why would you risk buying prescription medicines and “genuine” OEM auto parts that cannot be authenticated as “the real goods”?

If you are a brand owner, it doesn’t cost much to secure packaging and provide consumers with labeling that has “layered” overt and covert anti-counterfeiting protection.

If you are a consumer, we encourage you to ask manufacturers what they are doing to protect you from purchasing counterfeited goods. After all, if there are “hundreds” of Beatles counterfeits, it is logical to assume that there are thousands of chances that you are purchasing “fake”, “illicit”, “diverted”, or “diluted” prescription medications. Fight back. Insist on brand protection.

It’s time to take bold leadership and protect the public. Mark Twain said it best: “Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great, and your ideas have merit.”