28. January 2005 · Comments Off on Proliferation Of Counterfeiting · Categories: General, World

It seems that product counterfeiting has become quite rampant. Might we consider this to be a matter of vital national interest?

The scale of the threat is prompting new efforts by multinationals to stop, or at least curb, the spread of counterfeits. Companies are deploying detectives around the globe in greater force than ever, pressuring governments from Beijing to Brasília to crack down, and trying everything from electronic tagging to redesigned products to aggressive pricing in order to thwart the counterfeiters. Even some Chinese companies, stung by fakes themselves, are getting into the act. “Once Chinese companies start to sue other Chinese companies, the situation will become more balanced,” says Stephen Vickers, chief executive of International Risk, a Hong Kong-based brand-protection consultant.

China is key to any solution. Since the country is an economic gorilla, its counterfeiting is turning into quite the beast as well — accounting for nearly two-thirds of all the fake and pirated goods worldwide. Daimler’s Glatz figures phony Daimler parts — from fenders to engine blocks — have grabbed 30% of the market in China, Taiwan, and Korea. And Chinese counterfeiters make millions of motorcycles a year, with knockoffs of Honda’s (HMC ) workhorse CG125 — selling for about $300, or less than half the cost of a real Honda — especially popular. It’s tales like this that prompt some trade hawks in the U.S. to call for a World Trade Organization action against China related to counterfeits and intellectual-property rights violations in general. Such pressure is beginning to have some effect. “The Chinese government is starting to take things more seriously because of the unprecedented uniform shouting coming from the U.S., Europe, and Japan,” says Joseph Simone, a lawyer specializing in IPR issues at Baker & McKenzie in Hong Kong.

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