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Special report: Ferreting out fakes

Special report: Ferreting out fakes

Counterfeit wristwatches and handbags used to be restricted to back alleys. But these products are now swamping the Internet on a massive scale.

June 20, 2010 11:38 by

Although buying knock-off Nikes may seem harmless, those campaigning against counterfeiting point not only to the jobs lost to intellectual property abuse – some estimate the number at 750,000 in the United States alone – but also link revenues from these activities to drug trafficking and even terrorist activities such as the 2004 Madrid train bombings. Without a doubt the industry relies on horrific exploitation of child labor; opponents describe eight-year-old children chained to machines and made to sleep on cement floors. For all these reasons, industry groups and law enforcement officials have dialed up a sterner response. One trade group is estimated to be spending as much as $10 billion a year to combat the surge in fakes – small change compared to the profits at stake. And that is the problem: the profits are enormous – and the risk of discovery is still slight.

Valerie Salembier, publisher of Harper’s Bazaar, and the energy behind that publication’s aggressive assault on counterfeiting, has focused on consumer education. She and her colleagues have hosted several annual summits highlighting the damage done to the luxury trade, and the dreadful by-products of counterfeiting. The response by readers has convinced her that the message is getting across. “Three million women read this magazine,” she says. “We get mail all the time saying, ‘I had no idea that my purse parties could fund child labor’.”

Beyond education, industry is fighting to stay one step ahead of the counterfeiters. Kodak is a leader in this effort. The company has not only used its technology to wage this battle, it also used its New York Times Square JumboTron a couple of years ago to broadcast this sobering warning: “When you buy counterfeit goods, you support child labor, you support drug trafficking, and you cost your city $1 billion in lost tax revenue.”

The company initially found its way into the business through its inks division, while working on methods to ensure the validity of passports and visas. The team realized that nearly every product contains some sort of printing, and so their expertise was soon being marketed more broadly. The company is close-mouthed about its approach, needless to say, since counterfeiters are working ‘round the clock to outwit them.

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