Scope of Global

Counterfeiting
Organisation for Economic Cooperation and
Development (OECD) concluded in a 2007
study that about 2% of world trade, with a
value of about 176 billion (USD), is counterfeit
This number exceeds the Gross National
Product (GNP) of entire economies such as
Argentina (173 billion USD), Ireland (167 billion
USD), Israel (129 billion USD) and Venezuela
(128 billion USD)
Some authorities argue that counterfeits make
up much more than 2% of world trade.

Counterfeit Goods
The spread of counterfeit goods
(commonly called "knockoffs") has
become global in recent years and the
range of goods subject to infringement
has increased significantly.
Apparel and accessories accounted for
over 50 percent of the counterfeit
goods seized by U.S Customs and
Border Control.

Counterfeit Goods
According to the study of Counterfeiting
Intelligence Bureau (CIB) of the International
Chamber of Commerce (ICC), counterfeit goods
make up 5 to 7% of World Trade, however these
figures cannot be substantiated due to the
secretive nature of the industry.
In November 2009, the OECD concluded that the
share of counterfeit and pirated goods in world
trade had increased from 1.85% in 2000 to 1.95%
in 2007.
That represents an increase to US$250 billion
worldwide.

Counterfeit Seizures

Scope of Global
Counterfeiting
A very high percentage of counterfeit
goods originate in China
Counterfeit products infiltrate legitimate
supply chains
New technologies, including the internet,
have given counterfeiters access to new
channels of distribution
Counterfeit products are bought and sold
in virtually all economies

Scope of Global
Counterfeiting
Counterfeiters constantly alter their
trafficking routes
Customs authorities are
overwhelmed with the scale and
scope of counterfeiting
Free trade zones are used to
sanitize manifests as to the origin of
counterfeit goods
Free ports are transit points that
enable counterfeiters to conceal
distribution

Factors Behind
Counterfeiting
1. Freer trade relaxed border controls
2. Long distribution chains; parallel trade; trading
of pharmaceuticals by brokers as commodities
3. Economic motive poverty, and looking for
bargain products
4. Lax enforcement low prioritization to
counterfeits
5. Loose distribution systems outside pharmacies
6. New element -- the Internet
7. Weak intellectual property protection
8. Not recognized as an international threat

Effects on Supply Chain

Intellectual Property (IP)
rights owners require
more protection to
safeguard their brands.
Counterfeiting affects
distributors, retailers
and other suppliers
throughout the
distribution chain.
The cost of combating
counterfeiting is
growing.

Effects on Consumers

Consumers are cheated out of quality products and are

exposed to health and safety risks

Safety issues are prevalent in many sectors, including:

Food and beverages
Pharmaceuticals
Automotive and machinery
Electrical components, including:
Relays and contacts
Timers, circuit breakers and fuses and
Wiring accessories and batteries

Substandard items can cause property damage, illness,

injury and death

Intellectual Property
Intangible creative worknot necessarily the physical
form on which it is stored or delivered.
Given legal protection in the form of copyright, patent,
trademark, and trade secret laws.
Copyrights are granted for a limited, but long, time. FairUse Doctrine
Permission to use the work is not required.
Allows uses of copyrighted material that contribute to
the creation of new work and do not significantly
affect sales of the material, thus depriving copyright
holders of their income.
Allows some research and educational uses as well as
news reporting and critiquing.
Guidelines for determining Fair Use are found in law.

Ordinary Items Now

Counterfeited
With the market in fake goods expanding, shoppers need
to know the warning signs -- not only to avoid wasting
money but because such products can carry health and
safety risks.
Shoppers in the market for designer handbags know to be
wary of the too-cheap-to-be-real "fauxch" -- that is, faux
Coach bags -- just as those looking to cut their
prescription bills can assume that the emails in their
spam box for discount Viagra are, at best, offering sugar
pills. But experts say even scam-savvy consumers may
unwittingly buy some of the newest counterfeits popping
up in unexpected categories.

Perfume
In December 2011, police in Monroe, Ohio, seized
more than 500 bottles of fake perfume from local flea
markets, with mimicked scents ranging from $85
Chanel bottles down to $40 Beyonc scents.
What's inside a replicated perfume bottle is
anybody's guess. At best it is a perfume, but one that
smells nothing like a designer scent and may have
been watered down.
Fakes more often contain chemicals like
antifreeze, cleaning solutions or human urine,
any of which may cause a rash or other skin
problems.

Shampoo
It's not just pricey salon brands that are at risk for
counterfeiting. Labels found at the drugstore have caught
fakers' attention, too. Some are little more than water,
fragrance and a thickening agent, but anything that suds -notably, cheap cleaning solutions -- can be substituted for
the actual shampoo.
Late last year, Beijing police seized more than 2,000
boxes of faux shampoo bottles that were
contaminated with sulfur, as well as mercury and
other heavy metals. That's too harsh for a product that's
going on your scalp and possibly dripping near your eyes.
(And shoppers can forget about any label-promised
moisturizing, volumizing, color-protecting or anti-dandruff
effects.)

Honey
Recent tests by Food Safety News found that 75% of
store honey isn't really honey. It still comes from bees,
but the pollen has been screened out, ostensibly to keep
the honey from crystallizing.
Food safety experts say this may also be done to hide
the honey's origin, says Andrew Schneider of Food
Safety News.
Many regulators don't consider the food honey if there's
no pollen, but there could be more serious problems, too
While shoppers might not notice a taste difference,
tests found that a third of the faux-honey imports
from Asia were tainted with lead and antibiotics.

Toothpaste
The Food and Drug Administration warned
consumers about Chinese-made toothpaste in 2007,
saying it contained a poison used in antifreeze.
That's still a common adulterant, and one that you
don't want to put near your mouth, let alone ingest,
Halloran says.
Other unsafe-for-consumption chemicals may be
used, too, either as a way to make the paste white
or to create the right consistency, she says. Pastes
may also lack fluoride or can be contaminated with
bacteria.

Maple Syrup
Vermont's U.S. senators recently announced
they would co-sponsor a bill to make it a
felony to sell fake maple syrup as the real
thing.
Violators could face up to five years in prison.
Fakes may be made in part, or entirely,
from cane sugar rather than the more
expensive maple sugar.
The big risk here is financial -- a gallon of real
maple syrup can run $30 or more.

Baby Formula
That chalky taste may in fact be chalk, which is
commonly used as a filler to give the fake product the
right consistency.
Of course, fake baby formula isn't likely to have the
recommended levels of protein and other nutrients,
either.
Both factors can be problematic: In 2004, more
than 60 Chinese infants died after ingesting
fake formula.
The Food and Drug Administration warns that infants
may be intolerant of such ingredients and could
"experience serious adverse health consequences."

Sunscreen
Fake sunscreen can burn people twice -- first at
the cash register, then at the beach.
Counterfeits often contain chemical additives,
but they can also simply be cheap, all-purpose
skin lotion, which provides zero UV protection.
It's easy for a counterfeiter to make something
look like cream without containing the
expensive ingredients someone is buying it for.
(The same warning holds for anti-aging creams
and lotions, which are another common
counterfeit category.)

Counterfeit Medicines: A Special

Case
For most counterfeit products, the costs to consumers
are indirect I.e., product development
Not so for medicines costs are direct and serious
death, disability, resistance to legitimate drugs
There is a need for far greater awareness of the
hazards to health and a far greater political
commitment to international cooperation
Pharmaceutical companies: not only concerned about
loss of revenue but also about the damage to patients
and physicians confidence in legitimate products if
ineffective or dangerous copies are in circulation

Counterfeit Medicines: A Special

Case
World Health Organization
A counterfeit medicine is one which is
deliberately and fraudulently mislabeled
with respect to identity and/ or source.
Counterfeiting of medicines can apply to
both branded and generic products.
Generally, counterfeit products may include
products with the correct ingredients or with
the wrong ingredients, without active
ingredients, with in correct quantities of
activities ingredients or with fake packaging

Counterfeit Medicines: A Special

Case
Counterfeit does not include legal
generic versions* of patented
medicines: local laws dictate this,
consistent within international rules.
*There are issues about generics in connection
with the problem of substandard medicines

Why are Medicines a

Target?
Medicines represent one of the most regulated
sectors of industrial activity. Why do they
attract counterfeiters?
They are a relation to their bulk and a fake can be
made relatively cheaply
Many countries, especially in the developing world
are without adequate regulation and enforcement
Even in the industrialized countries, the risk of
prosecution and penalties for counterfeiting are
inadequate
The way in which medicines reach the consumer is
also different from other goods: the end-user has
little knowledge of the product

Pharmaceutical
Counterfeiting
There is no such thing as a good quality
counterfeit drug
Developing countries are the worst affected
because regulatory structure is weaker;
useful generics counterfeited
Prices vary widely globally, thus counterfeit
medical products are often widely (parallel)
traded
Counterfeiting is not just a brand issue:
i.e., generics are more extensively
counterfeited especially in poor regions