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Wealth of Ideas, February 2005
Say the term “counterfeit goods” and most
people will think immediately of street vendors hawking
$20 Rolex watches, fake designer handbags, or $5 CDs
and DVDs. Counterfeiting is big business: in December
2004 alone, the New York Police Department shut down
a 49-room “bootleggers’ mall” and seized
$12 million worth of clothing and shoes bearing brand
names such as North Face, Sean John, Reebok and Nike.
Raids in New York City since December 2003, when Mayor
Michael Bloomberg vowed to crack down on counterfeiters,
have netted $40-50 million in such fake merchandise.
Despite the huge profits these bootleggers make, the
average person still considers the counterfeiting of
trademarked merchandise a “victimless crime”
– the designers, after all, are not suffering in
poverty; nor are the music and movie industries. Public
apathy towards the problem is only one reason that traffic
in counterfeit merchandise continues: the public’s
desire for brand names at cheap prices, plus the proliferation
of bootleggers and ease of producing the counterfeit
products combine to make it difficult for law enforcement
officials to stem the tide of counterfeit goods.
One might argue that most people who pay $30 for a
$300 jacket are well aware that it’s not the trademarked
or officially-licensed “real thing”, and that
it’s likely of lower quality. But it looks like
the trademarked item, which is enough for some people.
And again, there are those who are willing to pay $300
for the genuine article, so where’s the harm?
Counterfeiting is such big business because trademarks
serve as an indicator of the source or quality of the
goods on which they appear. And counterfeiting of trademarked
items is not just for brand name clothing, music and
movies anymore; it now extends to such non-glamorous
items as medicines, food and auto parts. Would you want
to feed your baby counterfeit Similac infant formula
or drive a car with brake linings made of compressed
cardboard? How about spritzing on some counterfeit perfume
that’s laced with urine? This is where counterfeiting
gets personal (and disgusting, and possibly dangerous).
The problem of counterfeit merchandise is difficult
to solve, and will likely continue. As a trademark owner,
you are probably safe from counterfeiting unless your
mark is well-known. As a consumer, you can protect yourself
by knowing what not to buy at the flea market: shop
the booths there for antiques and crafts, but not cheap
Tylenol.
And when shopping for collectibles online,
be careful what you bid on when browsing eBay –
the world’s biggest flea market. Although eBay
promptly removes items that are known counterfeits,
with millions of items posted daily, they can’t
catch everything.
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