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Counterfeit products can be found anywhere in today’s market. From t-shirts to sunglasses to circuit breakers to autos, no industry is safe from products bearing counterfeit logos and trademarks invading the shelves of retailers, wholesalers and distributors.

Counterfeit products and intellectual property piracy is a growing problem that has been linked to organized crime and other illegal activities. These products are often unsafe and create unfair competition to legitimate business, bilking manufacturers out of billions of dollars in revenue from purchases of cheap, imitation products. Counterfeit products can also damage a manufacturer’s reputation with its consumers, if inferior, poor quality products are mistaken for the real thing.

Manufacturers of counterfeit products make huge profits by manufacturing inferior products stamped with a brand-name logo, fooling unsuspecting purchasers. Counterfeit products do not meet the necessary standards, and therefore also use counterfeit certification marks, fooling buyers into a false sense of security about the requirements which have been met by the product they are purchasing. They also may use cheaper, sometimes faulty materials and have no research and development (R&D) investment. They simply wait for products to be invented and patented, copy them, and sell them for a fraction of the cost.

Incidents of dangerous, fake counterfeit products arriving in the U.S. have skyrocketed since the mid- 1990’s. The International Anti-Counterfeiting Coalition (IACC), the largest international organization devoted solely to combating product counterfeiting and piracy, estimates that trademark counterfeiting robs the U.S. of more than $200 billion annually. Last year, U.S. Customs seized and destroyed more than $4 million worth of counterfeit electrical equipment. There have even been reports of counterfeit baby formula at retail stores in 16 states and faulty knock-off aircraft parts used on airplanes.

One expert warns distributors and supply houses that if they are approached with a deal that sounds too good to be true, then it probably is. "No matter what the industry, the story seems to be the same," says anti-counterfeiting lawyer, Lorne Lipkus of Kestenberg, Seigal, Lipkus. "Whether it’s t-shirts, cigars or electrical products, counterfeiters use the same approaches to distribute counterfeit goods. These include claiming the shipment of products offered is an overrun of a product, a deal on a product being sold through the back door, or a product that is ‘just as good as the real thing’ and therefore considerably cheaper in price." The opportunities for distributors are plentiful, and the profits are usually high, but industry is beginning to crack down on the practice, and distributors are among the first to be found and convicted of fraud for selling counterfeit products. "No industry is safe from counterfeiting," warns Lipkus. "Anything that can be duplicated, or can have a logo put on it, can be counterfeited. Even box designs can be duplicated to appear the same as a brand name manufacturer. If you can put yourself in the place of an intelligent, dishonest person, just imagine the possibilities."

The IACC reports the majority of counterfeit products come from Asia, primarily China, and that Eastern Europe has become a major source of these products, particularly Russia, Ukraine, and Poland. This is a concern for electrical manufacturers, as many electrical products and components are manufactured in Asia. For North American manufacturers and regulators hoping to remedy the situation abroad, there are many roadblocks, including a lack of useful or strong international legal avenues as well as a general lack of concern by Asian authorities. In many of these countries, the problem is not considered important; therefore, there are few officials policing the situation.

CSA International, a world-leading certification and testing organization, has developed an international agenda to combat trademark misrepresentation of its CSA certification marks. Similar to manufacturers, CSA International is fighting to protect its trademarks from illegal use, which would compromise the integrity of its certification marks.

Recently, CSA International implemented a North American anti-counterfeiting program, intended to investigate and take action against individuals who import or distribute products illegally bearing the CSA certification marks.

Doug Geralde, director, Corporate Audits and Investigations with CSA International, vice president of International Affairs for IAEI and vice chair of the IACC’s International Committee, stresses the importance CSA International has put on its anti-counterfeiting program. "The fight against counterfeit trademarks is important to everyone," he says. "At CSA, our reputation depends on the integrity of our mark. We’ve found products with counterfeit CSA marks and other certification organization marks. We want to catch these people and these problems, before they result in a loss of life."

CSA International’s efforts to thwart trademark infringement of its certification mark will benefit industry in general. By working with manufacturers and organizations such as the IACC as well as government authorities, CSA International hopes its efforts will help consumers and purchasers feel confident knowing the products they have purchased have been certified by a neutral, accredited third-party. Distributors will feel confident knowing the products they are selling have met the necessary certification protocol and are not in breach of trademark laws. Manufacturers will benefit by being alerted to counterfeit products infringing on their trademarks, as CSA Group’s anti-counterfeit program has found many products illegally bearing not only CSA trademarks but other corporate trademarks as well.

Tim Trainer, president of the IACC, explains that manufacturers need to be aware of the possibility of knock-offs, and should give the genuine products some security features so that identifying counterfeits is easier. He also stresses that manufacturers need to work with regulatory authorities, such as U.S. Customs, to help combat counterfeiters. One important step all manufacturers should take is registering their trademarks with the U.S. Patent and Trademark Office located in Washington D.C. and registering their trademarks and copyrights with U.S. Customs. For only $190.00, registered trademarks and copyrights are entered into the U.S. Customs IPR Imaging Module, a database that contains images of genuine products and their counterfeit versions. CSA International is also doing its part, by becoming an active member of the IACC. CSA has also provided training to U.S. and Canadian customs agents, the RCMP and other regulatory authorities, to alert them to the problem of counterfeit marks and to identify products bearing them.

Awareness of the problem is the first step manufacturers must take to protect their trademarks from copyright infringement. By adhering to a zero tolerance policy and by working together, certification organizations, regulatory agencies industry associations, and manufacturers can eradicate this costly and potentially deadly problem.

CSA International is a provider of product testing and certification services for electrical, mechanical, plumbing, gas and a variety of other products. Recognized in Canada, the U.S. and around the world, CSA’s marks appear on over one billion products worldwide. CSA International is a division of CSA Group which consists of CSA International, the Canadian Standards Association, a developer of standards and codes, and QMI for management systems registration.

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