NEMA Currents : Anti-Counterfeiting

A Campaign to Eliminate Electrical Counterfeit Products

golds — Fri, 03 Apr 2009 11:46:00 GMT

For years, the counterfeit products that law enforcement officials focused on most were products like watches, DVDs, purses, and shoes. Not that I don't sympathize with these industries -- counterfeiting is damaging to society because it diminishes the value of intellectual property, and in extreme cases can take away sales and eat away at market shares of legitimate businesses.

But when counterfeit products can kill, it elevates society's concern to an entirely new level. Which is what happens when bogus electrical products -- like circuit breakers, electrical cords, and lighting systems -- hit the streets. That's why the Electrical Safety Foundation International (ESFI), a nonprofit educational group that NEMA helped found, has launched a media blitz to raise awareness of this increasingly serious issue. Brett Brenner, ESFI's president, is on a crusade, and TV stations are taking note. Check out the clip earlier this week from Cleveland's Channel 5, which covered the story by pointing out where counterfeit electrical products can be found and how to avoid them. In early March, Austin's Channel 7 ran a similar story, as did Hartford's Channel 3 in mid-March.

With counterfeit electrical goods now among the nation's top interdicted products, this kind of publicity is critical to raising consumer awareness and ensuring public safety.

A Voice of Warning from LA

Lindsay, Christopher — Thu, 05 Feb 2009 04:38:00 GMT

This past week, Brett Brenner, president of the Electrical Safety Foundation International (ESFI), did an interview for the ABC affiliate in Los Angeles focusing on raising public awareness of counterfeit products. It is a segment that is well worth watching and that should be replayed in communities across the US. You can watch the segment here.

Over the last few years, the electrical industry has made a concerted effort to fight the rise of counterfeit goods. We have come a long way in educating manufacturers, distributors, government officials, and contractors on the absolute necessity for each part of the supply chain to do their part in fighting counterfeits. But, we have more work to do. Every day normal people across the United States purchase extension cords, hair dryers, and batteries not realizing that they are bringing a dangerous counterfeit device into their home. These products are becoming increasingly available in the United States, and consumers are more vulnerable now than ever before to the dangers they pose. Last year alone, U.S. Customs and Border Protection seized $273 million in counterfeit goods – a 37% increase in value over the previous year.

Oft times it is a case of mistaken identity. Counterfeit electrical products commonly found online and in deep discount stores might appear to be excellent copies, but they are substandard and fail to pass minimum safety tests. Counterfeiters use inferior materials and avoid key manufacturing steps to reduce the cost of their products, allowing them to be sold at prices no legitimate retailer or manufacturer can match. These low prices are particularly enticing as families across the nation struggle with the economic recession we now find ourselves in. However, for the unsuspecting consumer of these products, the risk of fire causing injury to person and property is dramatically increased. While it is important that the industry work together to prevent counterfeit components from entering our manufacturing facilities, it is equally important that we warn those in our communities who are unaware that electrical products are being counterfeited and that they pose serious risks to life and property.

Have a Happy Fake Free Holiday Season

Silcox, Clark — Fri, 19 Dec 2008 16:17:00 GMT

Counterfeiting is not a seasonal crime. Yet the year-end holiday season seems to be a time when cautionary warnings about the dangers of buying counterfeit products are more prevalent. Like reminders to check batteries in a smoke detector when changing to daylight savings time, the holiday season seems an appropriate time to warn about safe practices. Just last week, US Customs in Newark, New Jersey seized 31,000 pieces of counterfeit holiday tree lighting that had arrived from China. In the United Kingdom, cautionary warnings about dangerous counterfeit electrical products such as fake Nintendo components and hair straighteners that have made their way into England this past year are issued so they don't make it into someone's gift box.

In the role of combatting counterfeit electrical products in the marketplace, NEMA and its member companies welcome the efforts of our channel partners, the National Association of Electrical Dealers (NAED) and the National Electrical Contractors Association (NECA) in publicizing the dangers of distributing and using counterfeit electrical products. This month, NAED and NECA jointly published a special supplement on the menace of counterfeit electrical products, and yesterday they unveiled a new Counterfeits Can Kill website. This is not the first time these organizations have publicized the issue to the electrical wholesale and electrical installation community.

A similar effort linking manufacturers, distributors and installers in the battle against counterfeit electrical products has been undertaken by BEAMA in the United Kingdom.

This type of cooperation is essential, and that is a central message of NEMA's video, Counterfeits Can Kill, released earlier this year, which anyone can access on the NEMA website, and is available to view in both English and Spanish.

Counterfeiting is both a supply and a demand problem. While manufacturers and law enforcement are active in taking steps to choke off the supply of counterfeits by pursuing both criminal and civil litigation, buyers who know to stay away from the dangerous fakes by purchasing from authorized and well-known supply sources can curtail the demand for these products. The Electrical Safety Foundation International has some useful tips on how to avoid purchasing dangerous counterfeit electrical goods.

Counterfeits Can Kill!

golds — Tue, 11 Nov 2008 12:25:00 GMT

So many critical issues face our members these days, from a devastating housing slump that has choked off demand for some electrical products, to a global recession combined with an increasingly strong dollar that will reduce member exports, to a credit crunch that is hurting our small manufacturers. And yet despite those threats, many of our members would say that counterfeit electrical products remain the greatest (long term) risk to their companies.

Which is why NEMA and the Electrical Safety Foundation, International (ESFI) have joined forces to release a new DVD in both English and Spanish directed at educating the public about this issue. "Counterfeits Can Kill" features manufacturers and government leaders and contains footage of examples of dangerous counterfeit electrical products -- from hair dryers, fuses and circuit breakers to surge protectors, extension cords and electrical outlets.

The lesson for anyone buying electrical products is, be careful purchasing online or from unauthorized vendors. Unlike a counterfeit watch or DVD, counterfeit electrical products can kill. To view a copy of the DVD online, visit NEMA's anti-counterfeiting web page.

Anticounterfeiting – UL go for gold

Winstanley, Gerard — Wed, 13 Aug 2008 16:25:00 GMT

Underwriters Laboratories recently unveiled their latest holographic label. The gold hologram will replace the silver hologram that UL has used for the last 12 years. The UL holographic label is used on 32 common consumer product where the risk of counterfeiting is greater, including power supply cords, nightlights and ceiling fans. Almost 20 billion products carry the UL logo, including 1 billion using in the holographic form. The new hologram is designed with higher levels of security in mind. It borrows technology from banknotes including color changing ink and a series of overt and covert security measures designed into the hologram. One of them is a UL symbol that disappears when viewed through the viewing windows on an authenticator card (think 3-D specs!).

The implications for manufacturers go beyond the cost of the labels and have brought some pushback from industry as my colleague Alex Boesenberg reported in a recent blog. UL is responding to industry's concerns by giving manufacturers more time to implement the change and ensuring there will be an adequate supply of the gold holographic labels. Some manufacturers are still unconvinced that the benefits of these anticounterfeiting measures outweigh the additional cost for the holographic label.

CPSC announce recall of counterfeit circuit breakers

Winstanley, Gerard — Wed, 04 Jun 2008 12:41:00 GMT

The Consumer Product Safety Commission (CPSC) last week issued a recall on counterfeit circuit breakers sold by the distributor Specialty Lamp International Inc., of Deerfield Beach, Florida. The Counterfeit Circuit Breakers are labeled as “Square D” and approximately 371,000 have been distributed. They may fail to trip when they are overloaded and pose a fire hazard to consumers. The CSPC announcement provides information to identify the counterfeit circuit breakers. The recall is the culmination of lawsuit filed in 2006. NEMA had earlier announced the settlement between Square D and Specialty Lamp International which permanently enjoined Specialty Lamp and its officers from importing, selling, or distributing Square D products. The counterfeit circuit breakers were imported from Bogota Columbia and probably manufactured in China. Counterfeits are robbing NEMA members of sales in the USA and in developing markets while putting consumers at risk. More information on NEMA’s efforts to prevent counterfeiting can be found on the NEMA Website at: http://www.nema.org/gov/anti-counterfeiting/

Managing Effective IPR Law Enforcement

Silcox, Clark — Thu, 01 May 2008 20:16:00 GMT

Three years ago, the Bush Administration introduced a new intellectual property rights initiative called Strategy Targeting Organized Piracy (STOP) and named a Coordinator for the program reporting the Secretary of Commerce. Both the private and public sector generally agree that the STOP program has shown that when a government program that touches the responsibilities and resources of many different government agencies enjoy some degree of coordinated oversight, common direction, and information sharing, improved results can follow. United States intellectual property policy and enforcement involves numerous agencies: the Department of Justice and the FBI, the Department of Homeland Security (CBP and ICE), the Department of Commerce and the US Patent & Trademark Office, the US Trade Representative, the Department of State, and even safety agencies such the Food & Drug Adminsitration and the Consumer Product Safety Commission.

Recognizing that the STOP Initiative is only one President's program, and that America's strongest industries are those that enjoy high rates of innovation, creativity and intellectual property protection, Senators Evan Bayh and George Voinovich introduced the Intellectual Property Rights Enforcement Act (S. 522), which would permanently institutionalize the STOP program and promote further improvements in the way intellectual property enforcement, both domestically and internationally, is managed here in the United States. Recent studies by the Government Accountability Office have shown how further improvements in the management of our nation's IPR enforcement programs can be achieved. Similarly, the House Judiciary Committee approved the PRO-IP Act (HR 4279) yesterday, a comprehensive piece of intellectual property rights legislation that also includes in Title III IPR enforcement coordination provisions that draw on elements of the Bayh-Voinoivich legislation in the Senate. The House is expected to vote on HR 4279 in the coming weeks.

The stage is now set for the Senate to take up IPR enforcement legislation. The Bayh-Voinovich legislation contains two elements that were not taken up in the House-passed PRO-IP Act that deserve the Senate's consideration: (1) the engagement of the Office of Management & Budget in the group of agencies that play a role in more effective management of government resources devoted to IPR enforcement, and (2) improvement of international enforcement programs by calling on the United States and those other countries who are similarly committed to effective IPR enforcement to lead in the development of an international enforcement network. OMB involvement will ensure that those in government who are experts in effective management and assessment of performance will bring the needed critical analysis that measures what we are doing right and what can be done better. OMB can be accountable to Congress in this respect. The international network of countries who are committed to strong IPR enforcement ensures that as standards and best practices for effective law enforcement are agreed to, we do not become bogged down in reaching for a lowest common denominator that is characteristic of other international fora.

In addition to considering S.522, the Senate should also embrace the more comprehensive approach to IPR enforcement legislation by not only looking at the other provisions of the House-passed PRO-IP Act and other legislation pending in the Senate such as Senator Leahy's and Senator Cornyn's Intellectual Property Enforcement Act of 2007 (S. 2317) , but also passing legislation that adds dedicated IPR enforcment resources, both in terms of personnel and appropriations, to the key government agencies.

Effective deterrence and the fakes that harm

Silcox, Clark — Thu, 17 Apr 2008 15:20:00 GMT

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.

A letter from the counterfeit wars

Silcox, Clark — Sun, 06 Apr 2008 17:12:00 GMT

This weekend I received an email from a consumer in the United Kingdom, who had just learned that a hair iron she had purchased from a website for a favorable price (90 pounds sterling, approximately US$180..00) turned out to be "faulty," and she was told by the manufacturer that it was counterfeit. She reports that she purchased the hair iron from www.silkylustre.com. But type in this URL on your computer and the URL to which you are directed is actually http://www.njzhzx.com/lmf/ . This English language web page shows a nice picture of a particular brand of hair iron selling at a 30% discount. There was even a logo indicating that the website was an "authorized" dealer of this brand's product. But there were clues on the website that might indicate otherwise. The public "Contact" information for the website is merely a GMail address, and while there was a phone number provided, when I dialed it (on the assumption that the phone contact was in the United Kingdom, because there was no country code provided) I received an error message that my call could not be completed. Internet research suggests the phone number may be a Vodaphone cell number that has not been issued yet. There was no street or mailing address given for anyone at silkylustre.com; however, when the URL is typed in as just www.njzhzx.com it actually reveals a Chinese language website for an intermediate school that appears to be based in Nanjing, China. Most consumers probably don't dig this deep into the web information and research that is available to them, and they take the web site at face value. For websites they are not familiar with, consumers need to look harder and deeper.

The lure of the discount price on electrical products needs to face consumer resistance if the consumer cannot authenticate the source of the product as an authorized supplier of genuine brand products. The redirected URL is one consumer clue that should lead to resistance. And if you have suspicions, an Internet search engine that looks for the words "counterfeit" or "fake" and the particular brand may provide other clues. Look what I found when I typed in "counterfeit" with the brand name for this hair iron. http://www.bidorbuy.co.za/item/6679483/G_H_D_HAIR_IRON_genuine.html Even eBay had a forum talking about counterfeit hair irons. http://forums.ebay.com/db2/thread.jspa?threadID=2000174242&tstart=40&mod=1205962621455 These online discussions are enough to give any consumer pause and cause them to search out known authorized distributors of the genuine product and steer clear of vendors with whom they are not familiar and may not be able to honor a demand for return of goods or respond to a warranty claim.

One of the economic benefits of Internet search engines is that it has the potential to drive down consumer search costs for product information. Consumers should pause at the bargain offer long enough to continue using these Internet tools to verify that they are purchasing a genuine product from a known, reputable dealer of that product. Send an email to the brand owner/manufacturer of the product if you have any doubts. This small incremental increase in consumer search effort will be far less than the loss one suffers if the bargain product turns out to be fake, faulty, or fatal. For products like electrical products, pharmaceuticals, auto parts and the like, where the counterfeit is strongly correlated with the substandard and the potentially injurious, this is essential consumer behavior.

Time for ACTA

Meakem, John — Mon, 24 Mar 2008 17:51:00 GMT

Last week we submitted comments to the Office of the U.S. Trade Representative on the proposed “Anti-Counterfeiting Trade Agreement” between this country and our principal trading partners. With counterfeiting in the electrical equipment industry a growing problem worldwide, the idea of getting governments to all up their games with better enforcement and cooperation is pretty much a no-brainer.

Specifically, we would like the ACTA to include provisions that:

· Meet, and where necessary, exceed those in our existing free trade agreements.

· Are in the Stop Counterfeiting in the Manufactured Goods Act, which became law in March 2006.

· Feature meaningful and effective criminal sanctions that promote effective deterrence.

· Provide for establishing law enforcement and border protection coordination and information-sharing networks among each of the parties.

· Each party will designate a high-level executive branch officer to serve as principal law enforcement coordinator.

· Develop sentencing guidelines to be used by prosecutors and the judiciary.

· Prohibit procedures and practices that have been employed in some countries to make border civil and criminal enforcement more difficult than it should be (ie, by making it possible to sue individual customs officials for doing their jobs).

· Address the growing problem of the sale or offers-for-sale of counterfeits on the Internet.

Just whether an ACTA could ever be negotiated and meaningfully put into effect is another matter. Truly improving operations is difficult, and the subtle message underlying the initiative, which was first announced last fall, is that some of our best friends – starting with our two biggest trading partners to the immediate North and South -- aren’t do their anti-counterfeiting jobs so well. Moreover, I really wish they had chosen another name, for anything having “trade agreement” plus a distortable acronym is poison in the current U.S. political climate.