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Read MoreAccording to the Organization for Economic Cooperation and Development (OECD), the international forum composed of 37 democracies with market-based economies, counterfeit and pirated goods represent approximately 3.3% of all global trade volume. Counterfeit goods may not only infringe patents, trademarks, copyrights, and other forms of intellectual property but pose a great reputational risk to the brands of the legitimate companies these products impostor. Three years ago, the OECD partnered with the European Union Intellectual Property Office (EUIPO) to explore the Global Trade In Fakes, noting that as much as 5.8% of imports to European Union countries were counterfeit or pirated goods. The outlook for growth in counterfeit goods was advanced last month by brand protection company Corsearch, which presented research "predicting that the size of the global trade in counterfeit goods could reach $1.79 trillion by 2030."
Counterfeit goods have long plagued various sectors, extending beyond clothing, cosmetics, and handbags to increasingly complex products like airbags, automotive equipment, electronics, and pharmaceuticals. The growth of e-commerce has further strengthened the economics of counterfeits while providing an opaque shield around the sellers and the sources of their goods.
Counterfeiting is a legal issue and a significant threat to legitimate manufacturing, supply chains, and brands. The National Association of Manufacturers estimated that in 2019, counterfeits cost the U.S. economy nearly $131 billion, including $22.3 billion of lost labor income, 325,542 fewer jobs, $5.6 billion of lost federal tax revenues, and nearly $4 billion less in state and local tax collections.
Counterfeiting is a concern for manufacturers, importers, distributors, and consumers. Counterfeit products can damage a manufacturer’s reputation, and consumers may avoid their products. Distributors are wary of the legal and financial issues of unknowingly importing counterfeit goods. Consumers do not want to receive an inferior product.
Detection of counterfeit goods is both an art and a science. The more complex the product, the more technical understanding is required to detect counterfeit products from legitimate sources. Detection may be done in several ways, and manufacturers or distributors can use these methods to provide extra protection against counterfeits and make them easier to detect:
In the coming weeks I will explore the process of securing business intelligence to support counterfeit detection in memory products, sharing the many challenges associated with counterfeit good detection in the electronics industry.
We would like to thank our colleague David Fraser for providing insight and expertise that greatly assisted this research
David Fraser, MBA, MASc, BScEng, is a Senior Director in the Specialty Services group of Ocean Tomo, a part of J.S. Held, who combines technical excellence, patent expertise, and business acumen to partner with in-house corporate intellectual property (IP) groups, outside counsel, and financial institutions to dig into complex systems. He works on behalf of clients, international business leaders, in the US, Germany, France, UK, Netherlands, Japan, Korea, and China. He has over 10 years design experience in electronics, telecommunications, computer science, and semiconductors. David draws upon his extensive and unique experience overseeing patent strategy to guide his work in patent-focused business intelligence, including reverse engineering, laboratory testing, patent mining, market analysis and portfolio assessment.
David can be reached at [email protected] or +1 403 229 9192.
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