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Counterfeiting costs companies billions.

Counterfeiting of goods is taking a devastating toll, creating losses in revenue to corporations, taxes by governments, jobs in many industry sectors, and quality integrity in the minds of consumers, warns Robin A. Rolfe, executive director, International Trademark Association (INTA). "If we were to use only one-half of one percent of sales of affected industries as a measuring device for counterfeiting losses, the dollar value would be staggering. The magnitude of that amount, computing the gross sales of Fortune 500 industry sectors, is so awesome as to be unbelievable. [One-half of one percent totals $113,132,600,000.] ... That number is not as unrealistic as it appears. Many companies trying to compute losses modestly suggest one to three percent of gross sales as a starting point. Translate that into job losses, tax revenues lost and other important factors, and you begin to comprehend the enormity of the problem."

A survey among INTA members to identify those countries where counterfeiting and other trademark protection problems exist named Taiwan, South Korea, Thailand, Indonesia, Hong Kong, and Brazil, in that order. "But, I don't mean to imply that there are no counterfeiting problems in the U.S. Walk in New York, Washington, D.C., and some other major cities, and you will see counterfeit goods sold openly on the streets. However, there is a vigilant and active law enforcement program in this country, with severe penalties, namely substantial fines and imprisonment. In some of the countries named, you might find entire stores filled with counterfeit goods!

"You should also be aware that counterfeiting is not limited to consumer products like watches, cosmetics, jeans and T-shirts. Automotive, aircraft and other vehicle parts, drugs, bearings, diskettes, hand tools, computers, medical equipment, fluorescent lamps, circuit breakers, even foods and stationery, among many other items, are all regularly being produced with false brand identification and packaging."

Although there are many Federal and state laws prohibiting counterfeiting, law enforcement and other official bodies are barely able to make a dent in the problem through raids and seizures. The U.S. Customs indicate the value of merchandise seized by that organization in 1992 was $33,051,000, but even they admit it is merely the tip of the iceberg.

Rolfe points out that "Each industry in turn has tried to combat this insidious intrusion on its sales and the subsequent harm to consumers who are cheated or deceived about the quality or source of the given product or service they purchase. Each has met with a varying degree of success. Banding together for the first time, to get a realistic fix on the size of the problem, then to focus on changing laws [in the U.S. and] other countries, and finally to strengthen enforcement procedures, is obviously the way to go."
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Title Annotation:product counterfeiting
Publication:USA Today (Magazine)
Date:Aug 1, 1993
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