Elimination of Counterfeiting
Instituting Global Best Practices in Eliminating the Counterfeiting of Technology
Counterfeits are non-genuine goods that infringe on the intellectual property of rights holders. Counterfeiting is a deliberate intent to deceive buyers by copying and distributing goods bearing trademarks without authorization from trademark owners.
One in ten IT products sold may actually be counterfeit, and approximately $100 billion of global IT industry revenues are lost to counterfeiters annually (KPMG/AGMA) The term counterfeiting refers to activities associated with non-genuine products which violate intellectual property (IP) rights such as patents, technology, trademarks and copyrights. Counterfeiting can be defined as a deliberate attempt to deceive consumers by copying and marketing goods that bear a rights holder’s trademark, so that these goods appear to have been placed on the market by the rights holder.
Examples of counterfeits in the IT industry include:
- Electronic supplies (printer consumables, batteries)
- Semiconductor parts and components o Software and Software Documentation
- Printed circuit boards o Higher level electronics systems (computer laptops, desktops and servers; disk drives, network equipment, telephones, etc.)
Counterfeit goods generally fail to meet the full range of product specifications and performance standards, but may have the look and feel of the genuine article.
The problem is huge:
- The international trade in counterfeit goods is growing at an alarming rate and, according to the International Chamber of Commerce, has reached $650 billion (2007 number)
- U.S. Chamber of Commerce estimates that intellectual property theft costs domestic companies between $200-$250 billion per year in lost revenues and has resulted in the loss of 750,000 jobs in the United States
Aside from the potential injuries counterfeit can cause to consumers, the most significant negative impact of counterfeiting is the damage to customer satisfaction, brand value and brand loyalty. The time and dollar investments to test failed equipment and work with customers on those products that are not under warranty because they are counterfeits creates a significant drain for rights holders, authorized channel partners and end customers. End customers can routinely experience data loss and business interruption as a result of counterfeits entering into the market place for purchase.
AGMA recommends that all vendors, regardless of size, take proactive steps to address counterfeiting issues by securing the supply chain, educating authorized channel distributors and arming resellers with tools to ensure the brand integrity of genuine goods. Buyers should only purchase from suppliers authorized by the IT manufacturer.
AGMA’s primary focus is on industry and public education, sharing and developing best practices to effectively hinder threats to intellectual property and render these activities more difficult, undesirable and unprofitable. AGMA’s role is to present members and the industry with strategic ideas for addressing key IP protection issues, and to introduce better controls or processes in mitigating threats to IP.
Membership in AGMA provides access to important programs, strategies and tools for combating gray marketing and counterfeiting of branded products, service and warranty fraud and protection of IP in a digital format.