Effective deterrence and the fakes that harm
Last night, the Public Broadcasting System aired an excellent National Geographic film titled Illicit! based on the book by Dr. Moises Naim, editor of Foreign Affairs magazine. Dr. Naim's book addresses illegal global trade in the broad sense, and the National Geographic film showed examples of the many forms of illicit trade including human smuggling and drug trafficking, but there was a focus on counterfeiting and piracy and the harm it causes that is worthy of public attention. If anyone is looking for evidence that organized crime is in the middle of and profiting from global trade in counterfeit and pirated goods, Illicit! documents this fact. Deterring this crime is a daunting task, but meting out jail sentences can be effective. In June 2007, the Asia IP enforcer for Addidas shoes reported to Corporate Counsel magazine that aggresively pursuing criminal cases in China that sent people to jail had virtually eliminated Addidas' counterfeiting problem there because the word was out that you go to jail for copying Addidas shoes. The unfortunate consequence of this effort is that the remaining bad guys turn their attention to the other brands. US law imposes significant criminal penalties for counterfeiting, up to ten years in jail and fines of up to $2 million in the case of individuals and $5 million in the case of corporations. In the electrical industry, where the substandard fakes clearly create a risk of injury to persons or property, a couple of US courts have imposed significant sentences around eight years. There have been other cases in the industry where sentences of jail time for one year or more have been meted out. The House Judiciary Committee is close to approving HR 4279, which will enhance jail sentences for trafficking in counterfeit goods that cause harm to persons or property. So the news received today that a court in England suspended the eight month jail sentence for an individual who was trading in dangerous counterfeit electrical and automotive products is disappointing because of the message it sends.
04-17-2008 11:20 AM