How not to mistake a fake

Few big companies are unaffected by counterfeiting somewhere in the world. As Tony Gurka, managing director of Commercial Trademark Services in Hong Kong, notes, “you get corporations saying they don't have problems. Well if they don't, either they have a lousy product or it's being copied so well they don't know about it.”

One strategy that companies increasingly take is to load their vulnerable products with anti-counterfeiting features. Some of these, borrowed from pioneering security devices developed for use on dollar bills and the like, are clearly visible and are intended to help consumers distinguish fakes from genuine goods. One approach, used by Telesense in Beijing, is to label each item on sale with a unique 16- to 21-digit number. Consumers can confirm that the item is genuine by calling the company. Telesense reckons it has 8 billion numbers in its database and on products throughout China. But such overt anti-counterfeiting features depend on consumers caring enough to make a call. Other devices, such as holograms, are themselves prone to counterfeiting.

Companies also use covert features, primarily to help them trace their products through the supply chain and to distinguish genuine articles from fakes, especially should they need to take the copycats to court. Molecular tags (such as DNA) are being used in products or on packaging to mark them in such a way that special assays can distinguish the real thing. And there is a raft of encryption methods to stall, if not stymie, would-be software and digital media pirates.

A number of firms have sprung up to provide authenticating technologies. Pira International, a trade organisation, reckons that the markets for these technologies will be growing by more than 10% a year by 2005. But many companies still balk at the cost of some of the more effective technologies, especially in today's economic climate.

Bill Thompson, the Shanghai-based managing director of Pinkertons, a private investigation firm, claims that the key to fighting counterfeiting is the four “Es”: enforcement, education, external pressure, and economic growth. Once firms get a hint that counterfeits are circulating in a particular market—from, say, unexpected fluctuations in sales or angry consumers—many employ the likes of Mr Thompson to watch the market, collect samples, and co-ordinate raids with the local police.

But enforcement in many countries is uneven. To begin with, police or customs officers are often more interested in fighting what they consider to be more serious offences, such as homicide or drug smuggling. There is also a problem of job protection: in many poor places, counterfeiting is the biggest business in town, and local police would rather not be responsible for putting local people, and even their own relatives, out of work.

Two years ago, Russell Lerner, who works for Pinkertons in Bangkok, went on a raid in Photharam district in central Thailand to clear out counterfeiters making stuffed knock-offs of Mickey Mouse and other famous characters. Over 1,000 people turned out to block the raid. It eventually took government intervention to confiscate the furry contraband and shut down the sweatshops. Today, however, Photharam is back in business, “as if nothing ever happened”, says Mr Lerner.

Date: 2015-01-12; view: 1114