Transcript Project Multi Tech Case Study

Putting the Pieces of the
Puzzle Together
Counterfeit Busting 101
CSA 2012 Annual Conference
Monday, June 11, 2012
Quebec City, Quebec
Presented by
Lorne M. Lipkus
of
Kestenberg Siegal Lipkus LLP
Barristers & Solicitors
65 Granby Street, Toronto, Ontario, M5B 1H8
www.ksllaw.com
Tel: 416-597-0000 Fax: 416-597-6567
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What is being
Counterfeited?
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Answer
1.ANYTHING
&
2. EVERYTHING
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Alcohol
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Apparel & Accessories
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Automotive
Copyright Kestenberg Siegal Lipkus LLP
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Batteries
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Belts & Buckles
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Cell Phones & Accessories
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Designer Bags
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DVD’s
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Electrical
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Electronics
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Food & Beverages
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Health & Beauty
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Household Items
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Ink Cartridges
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Pharmaceuticals
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Tools
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Shoes & Boots
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Software
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Sunglasses
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Toys
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Watches
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… and
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Fake Wine Discovered At LCBO
Prompts Police Probe
-The Toronto Star, March 18, 2011
• “It was awful. It tasted like
homemade wine,” said Campbell,
who wasn’t surprised that fraudsters
targeted the Negrar, which retails for
$34.95.
• “They’ve been in business for
decades, and Schiralli has
represented them for 40 years. They
were hurt, puzzled, devastated.
They couldn’t believe that someone
had done this,” said Campbell. A staff
member of Campbell’s tried the fake
stuff after buying it at an LCBO store
and immediately noticed something
was wrong.
At left is a fake bottle of 2006
Negrar Amarone Classico. The
legitimate one is on the right.
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The Sharjah Economic Development
Department Destroys 21,000 Fake Sanitary
Napkins
© The Gulf Today, April 22, 2011
Fitness Equipment
• October 19, 2009
– 32,000 pieces
– 2 dozen seizures
– Maliby Pilates Chair
– Bow Flex Home Gym
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Blackberry Handsets
Don’t be fooled by the
name on the to the
untrained eye, the
keyboard, splash screen,
convenience keys and
trackball all mimic the
BlackBerry 8900
Drawbacks? There are a few: The
BlueBerry does not feature RIM’s
world-class operating system; it
has no push e-mail (it checks for
messages on a set schedule); no
specialized encryption
(BlackBerry’s Enterprise Server is
famed for its security); no ability
to install third-party apps (like you
might find on BlackBerry’s App
World). All that, and it’s buggier
than a Winnipeg outhouse.
© Report on Business Magazine, The Globe and Mail, May 2010 Edition
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43,600
Counterfeit
Circuit
Breakers
Recalled
Occupational Health & Safety Online – March 2010
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Counterfeit electronics bust at
O'Hare International Airport
• Electronic items are now the number one category
of knockoffs seized by agents at O'Hare International
Airport
• Experts caution that counterfeit electronics rarely
perform as advertised and can be dangerous.
• It can look very similar to the actual, authentic
product but be much different internally and
therefore, potentially, be much dangerous
© http://www.ksdk.com, May 17, 2012
Phony smoke detectors given out
by Atlanta Fire Department
• The Atlanta Fire Rescue
Department recalled more
than 18,000 smoke detectors
it distributed after discovering
they were counterfeit
•
•
Smoke detectors bore a counterfeit certification
hologram
Analysis deemed the circuit board incomplete
© Consumer Reports, May 31, 2011
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U.S. Military Equipment Built
with Counterfeit Parts
• Counterfeit parts have been incorporated into
the Air Force’s largest cargo plane, into
helicopters and into a Navy surveillance plane
• 84,000 counterfeit electronic parts supplied
for a collision avoidance system used in the C12 and Global Hawk aircraft.
© The Fiscal Times, May 22, 2012
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Pitfalls of CounterfeitPart Epidemic Exposed
• Homeland Security Today reported that the number of
counterfeit parts that are vital to the computer industry is
expected to reach record high levels as the semiconductor
industry enters “a phase of accelerating growth,” according to
an analysis of trends conducted by IHS.
• “The scale of the counterfeit problem has grown dramatically
in recent years, with reports of counterfeit parts quadrupling
from 2009 to 2011,” IHS said. “Supply chain participants in
2011 reported 1,363 separate verified counterfeit-part
incidents worldwide, a fourfold increase from 324 in 2009.”
© Homeland Security Today – May 23, 2012
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“UN ties counterfeits to organized
crime”
Copyright © 2007 USA Today Dec 14, 2007
TURIN, Italy - “Counterfeiting is a dangerous and growing enterprise controlled by
organized criminals who are exploiting the same trade routes used for trafficking
drugs, arms and human beings, the United Nations said in a report released Friday.”
“The report said counterfeiting carries far lighter penalties than traditional crime
syndicate activities, such as trafficking drugs. But it provides much higher profits.
The most well-known criminal organizations involved in counterfeiting are the Chinese
triads, the Japanese Yakuza, the Neapolitan Camorra and the Russian Mafia,
the report said.”
“Italian anti-Mafia prosecutor Franco Zuccarelli, who attended the release of the report,
said a Camorra turncoat bragged, as recently as 2003, of the "impressive" profits from
counterfeiting. Investigators in Indonesia have said the Calabria-based 'Ndrangheta are
trafficking in counterfeit CDs and DVDs in Asia, he said.”
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“UN ties counterfeits to organized
crime”
(CONTINUED…)
Copyright © 2007 USA Today Dec 14, 2007
“Because entrepreneurs lose profits and states lose tax revenue, counterfeiting slows
economic growth and costs an estimated 100,000 jobs in the European Union alone”
Fake baby formula caused the deaths of at least 13 babies in China in 2004 and fake
raki, a Turkish alcoholic beverage, killed 23 people in 2005.
"We need to make citizens of the world aware that counterfeit products can damage
consumers' health and economies, while reinforcing organized crime," Zuccarelli said
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Counterfeit Goods and Their Potential Financing of
International Terrorism
Zachary A. Pollinger Harvard University
“An example of one such statistic [links between counterfeiting and terrorism] is Interpol’s
2004 seizure of $1.2 million worth of counterfeit German brake pads. Later
investigations of the products revealed that their proceeds were earmarked for
supporters of the Lebanese terror organization Hizbollah.
According to Interpol Secretary General Ronald K. Noble, “Linking the Hizbollah to
counterfeit brake parts shows not only the link between terrorist financing and
intellectual property crime, but also how intellectual property crime is not a
victimless one – the potential danger to the public from this sort of criminal activity is
too serious for governments and law enforcement to ignore.”
“More specious connections to Hizbollah have been reported with counterfeiters based
in Los Angeles County. Authorities have found case specific evidence of these
connections (in the form of Hizbollah flags, tattoos, and pamphlets) in the homes and on
the persons of numerous convicted counterfeiters.”
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Counterfeit Goods and Their Potential Financing of
International Terrorism (continued)
Zachary A. Pollinger Harvard University
“Interpol has found that Chechen rebels fund their operations through the sale of
pirated CDs and that paramilitary groups in Northern Ireland fund their operations by
counterfeiting DVDs. Even Al Qaeda has been linked to the counterfeit industry
through the sales of fake perfumes and shampoos.”
“Finally, according to New York City police commissioner Raymond Kelly, the sale of
pirated CDs was responsible for funding the 2004 bombing of a Madrid train – an
incident that resulted in the deaths of 191 people.”
“The reason that terrorist organizations would fund themselves through counterfeiting is
simple: fast, easy, plentiful cash. Counterfeiting and piracy are extremely easy
industries to enter and would help terrorists maintain a certain level of anonymity. In
addition, the profits from counterfeit sales significantly outweigh those of other illegal
products. While the sales of cocaine might yield an entrepreneurial criminal a 100%
profit margin, sales of pirated Windows software would earn a savvy counterfeiter
profits of up to 900%”
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Anti-Counterfeiting
Organizations
National
&
International
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• The Certification Industry Against Counterfeiting (CIAC) is an
international network of certification organizations
committed to stopping the worldwide proliferation of
products bearing counterfeit certification marks that may
endanger public health and safety.
• In addition to essential enforcement, CIAC and INTERPOL
recognize the need for a strong educational program related
to anti-counterfeiting and the importance of third party
independent certification. CIAC's mission will include a
comprehensive focus on education programs for the public,
manufacturers, distributors, retailers, law enforcement and
other government agencies.
www.ciac-cert.org
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CIPC
Canadian Intellectual Property Council is a Canadian business coalition
designed to provide a central voice to press for stronger intellectual
property protection both in Canada and worldwide.
CIPC’s main objectives are to ensure that the Canadian government
provides the necessary resources to create the right environment for an
innovative economy to flourish in Canada and fight the rampant
counterfeiting and piracy of intellectual property.
CIPC will lobby the government and push for these changes, together
with our international counterparts, to fight for intellectual property
protection worldwide and produce comprehensive reports on IP trends,
and better measure the impacts of counterfeiting and piracy
www.ipcouncil.ca
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Canadian
Anti-Counterfeiting Network
Mission Statement:
To dramatically reduce the manufacture, importation,
distribution and sale of counterfeit and pirated products in
Canada through public education, training of law
enforcement and lobbying for legislative change and
increased financial and human resources to combat the
problem.
www.cacn.ca
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IACC
• The IACC is the largest multinational
organization representing exclusively the
interests of companies concerned with
product counterfeiting and copyright piracy.
www.iacc.org
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What do we do with the
Counterfeits?
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Questions or Comments ?
Lorne M. Lipkus
Kestenberg Siegal Lipkus LLP
Telephone: 416.984.9992 (Mobile)
Office Direct: 416-342-1112
Office: 416.597.0000 Ext. 112
E-Fax: 416-342-1102
E-Mail: [email protected]
Website: www.KSLLAW.com
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Thank You
Lorne M. Lipkus