Counterfeiting, an illegal action, has significant effects on both designers and everyday consumers, according to a study. This unlawful activity leads to job losses and incurs approximately $250 billion in expenses each year. Moreover, counterfeiting yields higher profits than other illicit businesses (Crime Inc., 2010).
Counterfeiting is often believed to only harm designers and the economy financially. However, it is important to recognize that this crime can also have personal repercussions on individuals and their families. A study conducted by Sara Marcketti and Mack Shelley revealed that 244 fashion students at Midwestern University admitted they would purchase counterfeit goods. This alarming statistic raises concerns about consumer safety.
According to a study by Bilal (2012), consumers with different genders and backgrounds have varied personality traits. Young consumers from a wealthier class, who are self-conscious, consider branded items to be of utmost importance. However, for young consumers from middle class or poor households, purchasing counterfeit goods may not hold the same significance. Thus, the danger lies in the fact that counterfeit sneakers may appear harmless, but consumers are unaware of the physical harm inflicted on their feet.
The most harmful form of counterfeit goods are fraudulent medicines. The United Nations office on Drugs and Crime (2013) states that the sale of fraudulent medicines from Asia to South-East Asia and Africa alone amounts to about 1.6 million per year. According to Marcketti and Shelley (2009), counterfeiting is when a manufacturer creates a lookalike product, labels it as an original, and passes it off as a true original. This global phenomenon accounts for 5%-7% of global trade.
According to KasimTatic (2012), the growth rate has increased by 1700% over the past 10 years. The constant growth of Counterfeiting and Trademark infringement can be attributed to online Marketplaces like EBay, as mentioned by Saunders and Berger-Walliser (2011). Many consumers are deceived into purchasing counterfeit goods, resulting in financial losses for authentic designers. This phenomenon impacts the economy and consumer spending. It is understandable why original trademark holders would take legal action when they perceive cheating, threats, or copying, as noted by Bartow (2011).
In our materialistic society, individuals will do whatever it takes to obtain coveted items. The fight against counterfeiting is an ongoing struggle. (Wicker, 2008.) However, many consumers fail to recognize the distinction between copying a design and counterfeiting. According to Bartow, counterfeiting involves placing someone else’s trademark on unauthorized products that were not produced or approved by the trademark owner. (Bartow, 2011).
Although various types of counterfeiting exist, such as in the pharmaceutical and appliance industries, the fashion luxury sector has experienced counterfeiting for the longest time. According to Stewart (2005), haute couture dominated the fashion industry in Europe and America for a century (1860-1960). Bon Marche, for instance, imitated couturiers by showcasing their “latest creations” and even utilized the same illustrators as fashion magazines, albeit only for their catalog covers. It is crucial to recognize that counterfeiting was prevalent within haute couture over a century ago as well.
It is important for fashion students to understand the emergence of counterfeiting, which is a violation of the Federal Trademark Law. Counterfeiting involves the wholesale copying of trademarks and design features (Bartow, 2011). Hemphill and Suk argue that those who love cheap fashion knockoffs are seen as enemies of creativity and should only be able to decorate themselves and their lives with what they can afford (Bartow, 2011). Companies have the right to file for an injunction under the Lanham Act if their designs are copied (Bartow, 2011).
An interesting case is the Tiffany v. EBay case which was the first U.S. case that focused on the secondary liability of an online market. According to Saunders and Berger-Walliser, the courts in the U.S. dismissed all claims against EBay and stated that EBay cannot be held responsible for the infringement as it is the trademark owner’s responsibility to monitor and protect its brand. However, in France, a few courts had a different opinion and believed that EBay should be held accountable for counterfeiting Tiffany & Co. (Saunders, Berger-Walliser, 2011).
Counterfeiting in the fashion luxury industry is unjust and has negative consequences for consumers, designers, and the overall economy. However, when counterfeit activity extends to encompass food and medicine, it becomes an even more pressing issue. The United Nations Office on Drugs and Crime (2013) states that counterfeit food products are frequently peddled to unsuspecting customers. Criminals often dupe buyers through misleading labeling and misrepresentation, passing off these items as high-end goods or products from specific countries, resulting in inflated prices.
In 2008, melamine, a chemical used in plastics, was found in baby milk formula in China, leading to the illness of thousands of babies who consumed this counterfeit product. This incident illustrates the physical harm that innocent individuals can suffer from the counterfeiting industry (United Nations Office on Drugs and Crime, 2013). It is crucial to acknowledge that counterfeiting is not only unethical but also perilous and deadly. Many counterfeit goods do not comply with standard safety procedures and regulations.
Counterfeit goods producers prioritize making money as their primary objective. Their sole concern is economic gain (Crime Inc., 2010). It is of utmost significance to raise awareness regarding the issue of counterfeiting, encompassing both luxury fashion counterfeiting and the broader counterfeit industry as a whole. How can we put an end to this detrimental worldwide phenomenon? The surge in counterfeit goods can be attributed to a combination of factors, including overseas manufacturing, internet accessibility, and global sourcing. China is the predominant source of these counterfeit products.
Organizations such as INTERPOL and the World Customs organization collaborate to combat counterfeiting crimes and raise awareness among consumers across the country. It is important to stay vigilant and avoid falling victim to counterfeiting. Be cautious of suspicious labels, refrain from purchasing medications online, and consult your doctor regarding any doubts about the authenticity of medication labels. According to Richard Fisher in 2007, many companies believe that the best solution is to assign a unique physical fingerprint to each individual item produced, regardless of whether it is a refrigerator or a packet of cigarettes.
The US customs and Border Protection works diligently to prevent the entry of counterfeit goods. They utilize x-ray technology to inspect the contents of containers aboard ships. If the goods align with the shipping manifest, it is considered a positive indication. Additionally, hidden compartments are thoroughly inspected, and any items raising suspicion result in the removal of the entire cargo from the ship. Despite the value of intellectual property, counterfeiters have evolved their strategies to evade detection. They now attempt to send smaller shipments via mail, recognizing that this method makes it nearly impossible to be caught by authorities.
Additionally, criminals can use the internet to masquerade as legitimate retailers, thereby increasing the accessibility of counterfeit goods (Crime Inc., 2010). Counterfeiting is against the law and carries penalties. Insufficient regulation and enforcement in trade contribute to illegal activities, prompting customs services to prioritize the protection of intellectual property rights. Intellectual property law safeguards the exclusive use of creations and includes copyright, trademark, patent, and trade secret laws.
Overall, we have raised awareness about illegal activity and understand the indicators when we encounter a counterfeit item. According to Grace I. Kunz and Myrna B. Garner, authors of Going Global, The FBI stated that intellectual property crime results in an annual loss of $200 to $250 billion for businesses in the United States (FBI, 2002). Unfortunately, many consumers are unaware that they themselves are actively promoting and endorsing counterfeit items. Kunz and Garner (2011) commented, “Shopping for fakes is cool.”
How many of us have been to China Town in Manhattan and bought a fake coach bag or fake juicy couture perfume? Approximately 85-100% of girls from Mount Mercy Academy High School who went on a Senior trip to NYC in 2009 were guilty of purchasing counterfeit goods. As an eyewitness, I can attest to the situation and have personally seen how consumers contribute to this crime. Many people believe it to be harmless, particularly 17 and 18 year old girls on a class trip who are shopping for enjoyment and buying souvenirs for their families. It is crucial to educate young adults about crimes like these because most of them are unaware.
The increasing consumer demand for counterfeit items poses a challenge in preventing this crime (Kunz & Garner, 2011). Some consumers knowingly purchase these goods, while others do so unknowingly. Regardless, it is crucial to implement a cohesive strategy for educating consumers about the health, family, and environmental risks associated with counterfeit items. On a positive note, the widespread market for counterfeit goods has also created a thriving industry for preventing counterfeiting.
According to Global Issues in the Apparel Industry, fortune 500 companies spend $2-$4 million annually on anticounterfeiting (Kunz & Garner, 2011). The counterfeiting industry’s growth leads to increased spending on anticounterfeiting measures, creating a vicious cycle. This situation is unfortunate for designers and companies, as they lose out on money. Despite the efforts of intellectual properties to prevent and stop counterfeiting, it has reached this point (Kunz & Garner, 2011).
In Beijing, counterfeit fashion items are a common part of people’s daily lives. According to a study conducted by Lowther in 2004, a bag containing 500 Diesel tags can be purchased for the price of $6 in America. As we learned in class, trademarks can be various forms such as a brand, name, logo, letters, numbers, colors, or package design (Elias & Stim, 2003). Despite apparel companies investing large sums of money into brand development, the tags and labels that represent the brand and display the company’s trademarks only cost a few cents. These components are crucial to the product and play a significant role in customer loyalty (Going Global: The Textile and Apparel Industry, 2011).
The impact of counterfeit goods is significant, with brand owners losing over $720 billion annually to this problem. According to a special report from 2003, 7 to 9 percent of global trade consists of counterfeit products. This widespread issue affects individual firms, designers, and society as a whole. Extensive research, statistical studies, witnessing, and academic journal articles all point to counterfeiting as one of the biggest challenges faced by the Global Apparel and Textile industry.
Counterfeiting has been on the rise in the past decade, thanks to online Marketplaces like EBay, which makes it an illegal and harmful activity. It is important to recognize that Counterfeiting violates the Federal Trademark Law by copying trademarks and design elements entirely. Although US customs and Border Protection have made efforts to stop the importation of counterfeit goods, it is impossible to prevent every fake item from entering the U.S.
To combat counterfeiting, it is essential to educate both the general consumer and younger individuals about the detrimental impact on health and the environment. With the rising demand for counterfeit products, putting an end to this unlawful practice becomes increasingly challenging. Counterfeiting perpetuates a damaging cycle that adversely affects our economy and squanders resources that could otherwise be allocated towards assisting individuals in need of sustenance, shelter, and attire.
Discovering that innocent children’s lives are endangered by dangerous chemicals in baby formula or toxic plastic toys they chew on is worrisome. Raising awareness about counterfeiting extends beyond the fashion luxury sector and includes all forms of counterfeiting. How can we put an end to this harmful worldwide phenomenon? Fortunately, the US Customs and Border Protection plays a crucial part in thwarting the entry of counterfeit goods. They employ x-ray technology to inspect containers on ships and compare their contents with the shipping manifest to achieve positive outcomes.
Hidden compartments are thoroughly inspected and any cargo that appears slightly suspicious is swiftly removed from the ship. Preventing, solving, and eradicating this worldwide problem are of utmost importance.
References
- Saunders, M. Kurt, Berger-Walliser, Gerlinde (2011) The Liability of Online Markets for Counterfeit Goods: A Comparative Analysis of Secondary Trademark Infringement in the United States and Europe KasimTatic, MerimaCinjarevic.
- Viet-Dung Trinh, Ian Phau (2012) The Overlooked Component in the Consumption of Counterfeit Luxury Brands Studies: Materialism – A Literature Review Contemporary Management Research
- Sara B. , Shelley, Mack, C. (2009) Consumer concern, knowledge and attitude towards counterfeitapparelproducts. International Journal of Consumer Studies.
