Impact of Counterfeit Products

Keywords: counterfeiting essay, counterfeit products paragraph

According to Paradise (1999), "product counterfeiting is a form of consumer fraudulence: something is sold, intended to be something that it's not. This is different from the criminal offense of copyright violation, which involves the unauthorized transfer of licensed material, such as the sharing of music or training video files electronically. It really is a product counterfeiting is normally an sorted out group activity, because the manufacturing of goods can take people and time, and the goal is invariably revenue. As a result, most product counterfeiting would be considered organized crime under the convention. "

Many organizations are still trying to determine the range and level of the forgery problematic plus more significantly, regulate how it make a difference them. The truth is, imitation has being internationally pervasive, since it's starting it includes only increased each year.

Could outsourcing be increasing this kind of practice?

Developed countries are in control for the creation, technology, advertising and design of the merchandise while the genuine manufacturing of the nice might take places in countries like China, India, Indonesia, Estonia and Singapore just to point out some, these countries have a very successful and inexpensive labor.

These growing countries have generally a low per capita income, in other words are considered poor, and have a lower capacity for oversight. This same insufficient supervisory potential is what makes illegal make possible.

Products in popular can be mass-produced based on the similar or equivalent designs, often filled and branded in such way that means it is appear to be a duplicate. Sometimes it is impossible for a buyer to tell apart one from the other. Even the false goods may then can be purchased through equivalent market segments, or even permeate the legal source string with lower prices making the counterfeit product to in the end prevail. Without the additional costs of the legitimate goods, these forgeries can be priced exceedingly low while remaining much more lucrative. Because of this economical advantage, in a few markets in some parts of the earth, forged goods are more available and common than the real one.

Effect of counterfeiting on consumer

Counterfeit products tend to be unsafe goods. Counterfeit toy manufacturers need do not pay attention to any type of choking hazards, coloring poisonousness, the tiny parts rules which can be dangerous for newborns, flammability of hard and smooth parts, flammability of clothing textile, they do not have benchmarks for stuffing cleanliness. False automobile parts are not subjected to the demanding protection testing, so pretty much anything can occur. These car parts can bring serious consequences which range from defective parts not fitting, parts not carrying out needlessly to say, which can cause injuries and/or ensure expensive vehicle repairs at the end of the street. Due to inexpensive constituents and workmanship, false batteries and lighters have a high chance to explode.

According to Toscano (2011) "The dangers of counterfeit drugs are two-fold. First, counterfeit drugs may contain an wrong amount of active component or no active ingredient at all. The public health risk because of this type of counterfeit medication is significant, since users of these medications intend to treat an illness or an illness. Through the use of counterfeit medicines, they may be going untreated. This may cause treatment failure, increased resistance to treatment, and even death, based on the WHO.

Toscano also described that "Some counterfeits have little or no active pharmaceutical chemical - many contain innocuous ingredients, although nothing an individual would like to ingest when anticipating medication. These ingredients have included chalk, flour, supplements, talcum powder, or sugar, which, when considered with the expectation of having a pharmacological result, can be fatal. "

On the other side, Toscano points out that, "a lot more noxious elements have been within counterfeit drugs. INTERPOL accounts that rat poison has been within fake medications, while Patrick Ford, Pfizer's head of global security for the Americas region, says chemicals such as floor polish have been found in seized counterfeit products. The FDA has reported situations in which consumer's ingested tablets they thought to be Ambien or Xanax that, in reality, were counterfeit. These pills comprised the anti-psychotic haloperidol; ingesting them led to the necessity for hospitalization. "

However, as Pitts of the Center for Drugs in the Public Interest, highlights, "It's generally bad business to wipe out your consumer, and it's not in the interest of counterfeiters to damage you outright. " Counterfeiters are more likely to produce drugs formulated with inert substances, he says.

Nearly a 3rd (32. 1 percent) of reported counterfeits covered no active component, according for an research done by the WHO in 2000. Another 20. 2 percent had incorrect levels of substances; 21. 4 percent comprised the wrong materials; 15. 6 percent got the correct substances, but fake packaging; 8. 5 percent contained high levels of impurities; and 1 percent was copies of a genuine product. "

The hazards posed by the sales of counterfeit goods are well recognized. At the end of the road, the inexpensively made good may be more costly when you find out that you made a mistake it requires to be changed. Not merely do buyers risk being ripped off when they aren't certain of the value or materials applied to the merchandises they are really acquiring, nevertheless they may naЇvely be improving the get spread around of structured delinquency. Here is a chart showing the top 10 goods seized by Customs Agents in the entire year 2009, it has not changed much since then. ( 1 )

( 1 ) The following chart depicts the breakdown by percentage of the types of counterfeit goods seized by Customs Agents in the Year 2009. U. S. Traditions & Border Security, U. S. Immigration & Traditions Enforcement, Intellectual Property Protection under the law: Seizure Statistics: Fiscal Calendar year 2009, 7, 10, 12 (2009), http://www. cbp. gov/linkhandler/cgov/trade/priority_trade/ipr/seizure/fy09_stats. ctt/fy09_stats. pdf. http://www. unc. edu/courses/2010spring/law/357c/001/ACG/chartcommoditybreakdown. jpg

Effect on the initial brand

Product imitation poses a severe worldwide defy. The branding of goods implied high quality and a legitimate responsibility that purchasers attended to neglect. With no brand to look after, counterfeiters have no motivation to produce not shallow quality. Where it becomes impossible to differentiate the genuine from the imitation, low quality goods demolish the image of the copied product, and the cheaper goods will unsurprisingly take over. The crucial risk of imitating has been noticed in some parts of these financially emergent countries: the real product, high-quality merchandises have been essentially priced from the marketplace.

Consumers may have a wrong point of view of the blissful luxury product because of poor quality in toughness and design details. Moreover, counterfeiters of prestige merchandises inflict a negative prospect on consumers of genuine articles, as counterfeit products damage the non-public satisfaction related with a given product. We aren't discussing the people that are aware they are buying a forged product, as a Louis Vuitton bag bought from dark-colored market for example, we could rather discussing the one mislead by the false appearance that are not cognizant they are buying a artificial product.

According to Gosline (2010) "The purse-party world turns a whole lot of otherwise law-abiding women into enthusiastic and guilt-free law-breakers--initially. Most handbag party attendees haven't owned the true or the false version of the brands and revel in the thrill to getting luxury product for a fraction of the purchase price they'd be asked to pay in shops. Sure, the majority of my fellow party-goers acquired the funds to buy the real product. But these upper-middle-class women frequently remarked that they might not pay "simply for a label, " which, unlike consumers of the true products, that they had their priorities in order. "

Gosline's researcher head wondered, "what could cause these women to embrace illegal action so enthusiastically? Only later would I learn that the occurrence was short-lived. "

Gosline mentions that "I made a decision to follow purse functions as they traveled through these social networks for two. 5 years. And I was able to observe and record changes in 112 party-goers' behaviour toward the real brands as time passes. Much to my wonder, as well as perhaps theirs, these consumers experienced increased connection to the real brands. The imitation products were a gateway. As my topics' understanding of the luxury-handbag brands increased, they started out to get into stores to check out the true thing--something they had never done previous to participating in these purse people. "

Gosline summary was that "The fakes hadn't switched potential Gucci customers away from the brand. The contrary was true. "

Gosline discovered that "There have been various explanations why. Women who'd bought totes at a bag party began to notice the inferior quality of the fakes--and envy the real thing. In addition they reported being compelled to declare to other that their purchases were fakes. This brought on them to see a tension between their positive private self-images and their dishonest general public patterns. If my belongings are artificial, they eventually reasoned, exactly what does that say about me?"

I am not pro counterfeit but based on my researches I could say that a savvy luxury brand director could influence internet sites to pull the purse-party or the counterfeit product users with their stores, as counterfeit consumers find out that their buys aren't alternatives for the true product. They can show people the advantages they have got against counterfeit products and make clear them why counterfeit will never be able to replace the brand product.

How will it affect in the economy?

The Group for Economic Co-operation and Development or (ECODC) estimates that the international trade in counterfeit and pirated goods was well worth around $250 billion in 2007. The International Anti-Counterfeiting Coalition (IACC), a lobby group, says the true figure is in fact nearer to $600 billion, because the OECD's estimate does not include online piracy or counterfeits that can be purchased in the same country as they are made. Counterfeit goods constitute 5-7% of world trade, according to the IACC.

These countries suffer from both tangible and intangible deficits. First, overseas manufacturers of reputable products become indisposed to create their goods in countries where forging is popular as they can not rely on the use of their intellectual property rights. Hence, such countries not only lose DFI but also do not acquire this savoir-faire from these reputable manufacturers. We could talking about an economic reduction in large scales. Most producing countries rely on FDI to increase careers and grow economically.

Second, if many goods from such countries, including the licit ones, gain a status to be of poor value, this will cause trades losses which indicate a loss in available careers and forex. It is true that the illicit industry creates jobs but they tend to be badly remunerated, often implicate substandard working settings this includes child labor. They don't need to fret about a graphic; they would like to make a profit.

Third, the basis for entrepreneurial development in a nation is the occurrence of a legal system to guard the privileges of a new enterprise and encourage acceptable competition. Counterfeiters in a market is the entire opposite of this situation, counterfeiters discourage ingenuity since it prevents this enterprisers from buying advancement and development. Furthermore, companies that do not need their products to be counterfeited have a supplementary cost which with time translate in a rise in prices and climb in the firms costs.

Last however, not least, it also symbolizes a direct damage for the governments of countries. A duty loss can be an example, because the forgeries are usually exchanged through clandestine programs and fraudsters usually evade paying fees because they want to get the most out of the business.

Ultimately, it's the purchaser who pays off the price of unfair competition. Although some consumers consider they are receiving a good deal when they purchase imitations, the authentic value of the item is normally much poor. Hence, they conclude paying a higher price for a mediocre product.

Despite this, counterfeit goods seized in the U. S. from 2001-10 are in frequent increase (see chart 2), this only increases the strength of the counterfeit businesses, in the end making them more powerful and more challenging to eliminate or reduce.

Chart of counterfeit goods seized in the U. S. from 2001-10.

U. S. Traditions and Border Protection firm, Dept. of Homeland Security

(2)http://upload. wikimedia. org/wikipedia/commons/e/e2/Counterfeits_chart. jpg

According to the OECD (1998) "Counterfeiting has enticed both arranged and petty thieves who've not only derived huge profits out of this trade but also have used it, both as a way to invest the proceeds of criminal offense and to fund other offences. "

Counterfeiting and piracy may cause global economical and social loss of $1. 7 trillion by 2015 and put 2. 5 million reliable jobs vulnerable each year, the International Chamber of Commerce said in a report shared at the 6th Global Congress on Combating Counterfeiting and Piracy in Paris. "(Noble, 2010)

The economic and cultural impact of counterfeit and pirated products, which include lost tax earnings and higher government spending on law enforcement and health care, is respected at approximately $775 billion each year, the ICC said. The price is estimated to more than two times to $1. 7 trillion by 2015, partly as a result of "rapid boosts in physical counterfeiting and piracy" assessed by reported customs seizures as well as increased access to high-speed Internet and mobile technology, the ICC said. In 2008, the entire world Customs Organization, reporting on data collected from 121 countries, discovered that 65% of the total of counterfeit shipments recognized departed from mainland China, accounting for some 241 million bits seized internationally. (See chart 3) (Noble, 2010)


TOCTA Report 2010.

Trafficking countries China, South Asia and European Countries

Are there any organizations that fight against counterfeiters?

Basically, the IACC's mission is to fight counterfeiting and piracy by endorsing regulations, procedures and advices intended to reduce the theft of intellectual property and make it unattractive and non-profitable for crooks to apply. The IACC propose an anti-counterfeiting program aimed to increase security for copyrights, trademarks, service grades.

Its goal is to make people more aware of all the negative effect of counterfeiting which are: severe general population health and safe practices dangers, as well as economical harm. The IACC initiates activities and backs up administration moves that will eventually cause the prosecution of intellectual property infringers, and create a strong avoidance to counterfeiters and pirates.

"In order to create conditions under which its people' intellectual property protection under the law are safe from illegal copying, infringement and other forms of robbery, the IACC partcipates in substantive dialogue with governments worldwide. In going after its quest, the IACC provides police with information and training to identify counterfeit and pirated products and in the methods of product security to prevent the infringement of its participants' intellectual property protection under the law. " (IACC, 2011)

They provide good arguments on why people shouldn't buy counterfeited products; they call them the "Six Reasons You Should Never Fake It"
  1. Counterfeiting is illegitimate and purchasing counterfeit products facilitates illegal activity. (IACC, 2011)
  2. Counterfeiters do not pay taxes meaning less money for your city's institutions, nursing homes, parks and other public programs. (IACC, 2011)
  3. Counterfeiters do not pay their employees fair wages or benefits, have poor working conditions, and frequently use obligated child labor. (IACC, 2011)
  4. Counterfeit goods tend to be made using cheap, substandard, and dangerous components that put the health and basic safety of consumers at risk. (IACC, 2011)
  5. The revenue from counterfeiting have been associated with funding organized criminal offense, drug trafficking and terrorist activity. (IACC, 2011)
  6. When you purchase a fake, you become part of the pattern of counterfeiting as well as your money directly support these exact things you would never want to support. (IACC, 2011)

The way they dwelling address this example is the right approach, being that they are trying to attain the consumer, accountable for this upsurge in counterfeited goods, if there were no purchasers then there would be no vendors at all. By causing people alert to all of this negative result and by making advertisings noticeable to everyone they can diminish this kind of activities. Many people including myself weren't alert to this dominoes result that may be triggered just by acquiring a counterfeited good. Below are a few of the advertisements that are making people rationalize about if indeed they should buy counterfeited products. (see advertisements 4)

(4) Public awareness Campaign.

Ads taken from the IACC website: http://www. iacc. org/about-counterfeiting/public-awareness-campaigns. php

http://www. iacc. org/img/PSA/california1-1. jpghttp://www. iacc. org/img/PSA/psa_cost. jpghttp://www. iacc. org/img/PSA/psa_child. jpg

Further suggestions to solve this issue:

Create a global entity that is constituted of folks from all around the globe, and that they have cross-border permission to enforce intellectual property privileges.

Create or broaden one common legislations pertaining to intellectual property protection under the law to every country.

Government in developed countries should put more pressure to enforce intellectual property laws on developing countries, and make yet another clause so that if the united states after several attempts cannot enhance their current situation on counterfeiting then this international entity can type in that country and solve the challenge.

Improve the maritime docks, international airport and terrestrial security so that counterfeit products are harder to get.

Make law enforcement on stores that sell counterfeited products stricter by fining even to the idea of shutting them. Keep tabs on providers and incarcerate them.

Create a software with the best securities available so that each product have a unique serial number linked to the company and available only for verification to this international entity officers, to check on if the product is real.

Continue with this general population awareness advertising campaign of IACC. And commit more on this program, and make it open to schools for education purposes.

Make people more aware that counterfeited product will never replace the initial one.

Make viral videos on social media, displaying some circumstances where folks have died scheduled to counterfeited products.

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