Counterfeit products have been plaguing American businesses for years. It is estimated that the counterfeiting industry cost American businesses about $200 billion a year. Criminal have counterfeited of fashionable luxury items like $2,800 Louis Vuitton handbags, and even Kooba bags and Ugg boots. Now authorities in California have recently seized counterfeit Angel Soft toilet paper. Factors in China have been the main factor of counterfeiting luxury items. With the Anti-Counterfeiting and Product Protection Program cracking down on fake products being exported from China, what can they make? They decided to start producing knockoffs of lesser-known brands. They are easily sold on the internet priced higher than obvious fakes. They figured out that if they price the items near retail price that people don’t become suspected and buy a fake without even knowing it. The internet is becoming much harder to enforce and patrol.
In my opinion counterfeits will always plague America as long as there are high fashion items and products. This is why I always make sure the items I buy are at a retail store.
http://seattletimes.nwsource.com/html/nationworld/2012502070_knockoffs01.html?syndication=rss
Originally published Saturday, July 31, 2010 at 3:44 PM
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In tough economy, product knockoffs get even cheaper
In this economy, even counterfeiters are trading down. After years of knocking off luxury products like $2,800 Louis Vuitton ...
By STEPHANIE CLIFFORD
The New York Times
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In this economy, even counterfeiters are trading down.
After years of knocking off luxury products like $2,800 Louis Vuitton handbags, criminals are discovering there is money to be made in faking the more ordinary — like $295 Kooba bags and $140 Ugg boots. In California, the authorities recently seized a shipment of counterfeit Angel Soft toilet paper.
The shift in the counterfeiting industry, which costs American businesses an estimated $200 billion a year, plays to recession-weary customers looking for down-market deals, the authorities say. And it has been fueled in part by factories sitting idle in China.
Almost 80 percent of the seized counterfeit goods in the United States last year were produced in China, where the downturn in legitimate exports during the recession left many factories looking for goods — in some cases, any goods — to produce.
"If there is demand, there will be supply," said John Spink, associate director of the Anti-Counterfeiting and Product Protection Program at Michigan State University. In China, he said, "It's all of a sudden them saying, 'We have low capacity. What can we make?"'
The answer is increasingly knockoffs of lesser-known brands, which are easy to sell on the Internet, can be priced higher than obvious fakes, and avoid the aggressive programs by retail companies, customs enforcement and the big luxury brands to protect their labels, officials say.
The results: Faux Samantha Thavasa bags for $113 and Ed Hardy hoodie sweatshirts for $82.50. And, bizarrely, imitations that are more expensive than the real ones: In 2007, Anya Hindmarch sold canvas totes that said "I'm Not a Plastic Bag" for $15. Now fakes are available on the Web for $99.
"If it's making money over here in the U.S., it's going to be reverse-engineered or made overseas," said Jonathan Erece, a trade-enforcement coordinator for U.S. Customs and Border Protection in Long Beach, Calif. "It's like a cat-and-mouse game."
The traders in mid-price fakes are employing another new trick: By pricing the counterfeits close to retail prices — which they can do when the original product is not too expensive — they entice unsuspecting buyers.
Any savvy shopper, for example, knows a Louis Vuitton bag selling for $100 cannot be the real thing. But when NeimanMarcus.com, an authorized retailer for Kooba bags, sells them for $295, and a small website sells them for $190, a deal-hunting consumer could think she has scored a bargain. (She hasn't. The $190 bag is a fake.)
"If the price points are somewhat close, some consumers get duped into believing they're getting a real product," said Robert Barchiesi, president of the International AntiCounterfeiting Coalition, a trade group. "They might be looking for a bargain, but a bargain to buy real goods."
The counterfeiters are also lifting photos and text from legitimate websites, further fooling some shoppers.
"The consumer is blind as to the source of the product," said Leah Evert-Burks, director of brand protection for Ugg Australia's parent company, the Deckers Outdoor Corporation. "Counterfeit websites go up pretty easily, and counterfeiters will copy our stock photos, the text of our website, so it will look and feel like" the company site, she said.
While all of it is illegal, the authorities do not publish statistics on what brands' products are being counterfeited. But designers and trade experts said the down-market trend in counterfeiting became more noticeable over the last year, as counterfeiters got more inventive.
The field is big: The total value of counterfeit goods seized by U.S. customs officials increased by more than 25 percent each year from 2005 to 2008, using the government's fiscal calendar. In fiscal 2009, as imports overall dropped by 25 percent, the value of counterfeit products seized dropped by only 4 percent to $260.7 million.
The official statistics capture only a piece of the problem, companies and experts say, because so many counterfeiters market directly to customers on the Internet and many of those sales go undetected by the authorities.
"Online is much harder" to patrol and enforce, said Todd Kahn, general counsel for Coach, the handbag and accessories company.
That is particularly true for smaller brands, as Anna Corinna Sellinger, co-founder and creative director of the New York clothing and accessories company Foley & Corinna, learned.
A couple of years ago, she began checking out which Foley & Corinna items were selling on eBay. Her city tote, which now retails for $485, was a popular item, but on some listings "there was something off — it's a color I never did, or a leather I never did," she said.
As other sites proliferated, and Corinna Sellinger noticed more and more Internet fakes, she stopped looking altogether.
"It's just too frustrating," she said. "You can try to do something, but it's so big and so fast."
The lesson for many counterfeiters has been that they have a better chance of getting away with it if they copy smaller brands like Foley & Corinna — even though Foley & Corinna, while popular with celebrities and fashion types, is not widely recognized as a status brand and its bags can be had for as little as $126 on the brand's own website.
"Once it's out there a lot, people won't even want the real one because then they're like, 'People are going to think it's fake,"' Corinna Sellinger said. "It takes the product away from the designer
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