A U.S. Business Built on Plagiarism and Piracy
A time when the Chinese did not have a monopoly on theft
May 2, 2006: Vol. 2, Issue No. 34
IN THE NEWS
Next Step for Counterfeiters: Faking the Whole Company
In mid-2004, managers at the Tokyo headquarters of the Japanese electronics giant NEC started receiving reports that pirated keyboards and blank CD and DVD discs bearing the company's brand were on sale in retail outlets in Beijing and Hong Kong. So like many other manufacturers combating intellectual property thieves in China, the company hired an investigator to track down the pirates. After two years and thousands of hours of investigation in conjunction with law enforcement agencies in China, Taiwan and Japan, the company said it had uncovered something far more ambitious than clandestine workshops turning out inferior copies of NEC products. The pirates were faking the entire company.
—David Lague, The New York Times, May 1, 2006
One of the most fascinating books I have read recently is "KNOCKOFF: The Deadly Trade in Counterfeit Goods" by Tim Phillips (Kogan Page, $29.95). The reader who likes to get worked up will delight in more than 200 pages of pure outrage. Among the statistics:
- The World Customs Organization estimates that 7 percent of the world's trade—roughly $512 billion annually—is in fakes.
- One out of every three CDs sold on the planet is counterfeit.
- Only 26 million genuine Swiss watches are manufactured every year versus 40 million fakes.
- In Beijing the showcases, racks and counters of the Silk Alley market's 35,000 square meters are filled with knockoffs of Gucci, Hermès, Ralph Lauren, Rolex, Nike, Gore-Tex, Ray-Ban, Mont Blanc and hundreds more. This is true in Hong Kong's Stanley Market, the back alleys of Naples and Rome, Italy, and New York's Canal Street. In upscale townhouses and apartments in Boston, rich and middle class women can buy counterfeit designer handbags by Louis Vuitton and Kate Spade at "purse parties" based on the Tupperware business model.