China, home of the world’s counterfeiting industry has sent a letter to Alibaba accusing the company of not doing enough to fight counterfeits. According to estimates, 8% of China’s GDP is based on counterfeiting. So is it ironic that the regulators are attacking one company, but doing nothing on a nation wide scale. Nike left China years ago because the government would not enforce any intellectual property law.
At the start of this year, the Canadian Combating Counterfeit Products Act became law. With this new power, brand owners can register their trademarks and copyrights with the Canada Border Services Agency (CBSA). Basically you register with customs and when a package is inspected and the items match your intellectual property, customs will contact you to verify the package.
They can send a brand owner a sample of the package, and the details of the sender and receiver. This can also help companies that are wanting to have civil proceedings brought against counterfeiters in court.
There are no fees to register with customs. However if a brand owner wants the counterfeit goods to be destroyed, they may have to pay a fee. This part of the bill is still being developed and details are limited.
Before this bill became law, there was no legal authority for customs to seize a commercial shipment if they thought it was counterfeit.
A new bill proposed by Representative Steve Israel would increase the budget for the counterfeiting department over at the FDA. It would also alter the maximum prison term for those found guilty of selling counterfeits drugs or mislabeling medicine.
Counterfeit medicine is very dangerous. Especially if you have cancer and the cancer pills you got were counterfeit, just as this story about fake Avastin pills. That is just one cancer drug that is counterfeited and sold. Birth control pills, antibiotics are heavily counterfeited along with every other type of medicine, supplements and pills.
While the amount of counterfeit medicine is low in the US and western world, poorer countries have been hit hard. Afghanistan has it worst, with counterfeit medicine booming.
Rep. Israel would like to keep it that way, a low amount of counterfeits in the US. Removing all counterfeits is impossible. His bill calls for a $60 million expenditure per year to fight counterfeits, along with harsher prison terms.
In our last post, we discussed if counterfeit products such as clothing should be given to charity when the items are seized. If you recall from the post, in 2006 a law was passed on the Federal level to stop all givings of counterfeit products to charity. Before the law, US Government agencies would give out counterfeit clothing such as sports jerseys to victims of natural disasters such as Hurricane Katrina.
After the law was passed, that was no longer possible, even during a emergency. Trademark holders did not want their brand ruined by having certain people wearing it. Their words, not mine. Just like how Abercrombie and Fitch wanted the ‘The Situation’ to stop wearing their brand as the company believed he was ruining its image.
In the UK, counterfeit seizures are given to charity all the time.
Now a new bill signed by Governor Andrew Cuomo allows counterfeit clothing to be given to charity.
We have covered many stories on Alibaba’s and China’s problem with counterfeits. You can check out our post here where we discuss just how much Alibaba’s sales are depended on counterfeits.
As this year ends, the total amount that the company has spent on fighting counterfeit listings has been released. The past two years, starting in January 2013 to the end of November this year, Alibaba has spent a total of $160.7 million and has removed 90 million product listings. I guess they do have a lot of money to spend after raising $25 billion in their IPO back in September.