Counterfeit

There are many types of counterfeit goods that have been found by police in Canada, including CDs, DVDs and software, clothing and accessories, appliances, food and pharmaceuticals. Whatever the counterfeit product, criminals are making money from these knock-offs and others are losing money or worse.

Read about the following counterfeit products and their related issues to get a better picture of the problem and how it affects us all:

• Clothing and accessories
• Industrial products
• Pharmaceuticals
• Software
• Intellectual property
• Cost to Canadians
• Safety issues

Clothing and accessories

You may have seen – or even bought – fake brand-name watches or purses on city streets around the world. The knock-off purse you see on the street is the product of a complicated web of crime, often crossing international boundaries. The product information may be stolen in one country and the purse manufactured in another and sold in still another. At every point in the web there are people who lose out and who put themselves in danger in the name of fashion. Legitimate businesses that invest in the original development of the products lose potential revenues and can lose their good reputations to knock-off products.

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Industrial products

You may know someone who bought a cheap fire extinguisher or kitchen appliance. It seemed like a great deal, until the product malfunctioned. Then they find that there is no warranty, no protection and no way to find parts.

Here again, manufacturers and consumers lose out. The legitimate manufacturer who invested in the product research, design, development, marketing loses money and a good reputation. The consumer loses money and time.

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Pharmaceuticals

Counterfeit pharmaceuticals are medicines, both brand name and generic, which are deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeits may be produced with the correct medicinal ingredients, or those medicinal ingredients may be in insufficient quantities or absent altogether. The World Health Organization estimates that 10% of all pharmaceuticals on the market are counterfeit. In some countries, the percentage is as high as 50%.

New, expensive medicines such as hormones, corticosteroids, cancer drugs or anti-retrovirals are the most frequently counterfeited medications in industrialized countries. Other commonly counterfeited types of drugs in industrialized countries are:

• Lifestyle drugs which treat such conditions as sexual impotence, baldness or obesity, and
• Psychotropic drugs which include opiate-based pain-killers, tranquillizers, stimulants and anti-depressants.

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Software

Counterfeit software is not innocent. It usurps the legitimate work of software developers that can amount to millions of dollars in research and development investments.

For the consumer, it has a dangerous legacy. Once installed on your computer, if it does work, it can pose a risk of damaging other software and the computer’s hardware. More importantly, counterfeit software can also be used to crack personal files on a computer and make the user vulnerable to identity theft.

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Intellectual property

Counterfeit products look and feel the same as the genuine watch or kettle because someone has stolen the “intellectual property” – the trademarks, patents, and industrial design.

This violation of copyright, trademark or trade secrets leads to the counterfeiting of digital software, music and movies; of brand names such as watches, purses and electrical products; and of company designs and production plans.

Theft of the intellectual property undermines the billions of dollars invested and the legitimate work of professionals such as engineers, product designers, scientists, researchers, pharmacists, marketers and lawyers.

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The cost to Canadians

There is a high cost to Canadians from counterfeit products. There is an economic cost to companies and to holders of trademarks and copyright from lost revenue. There is a cost to consumers. Two hundred dollars spent on a faulty appliance or a counterfeit pharmaceutical is two hundred dollars lost on a substandard product. And these products may incur residual costs, causing injury or damage to property.

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Safety issues

There are several significant safety issues in counterfeit products.

• Counterfeit electrical products may cause fires and personal injury.
• Materials and assembly of the products may be substandard, flammable and even harmful to the health of those who wear them or use them.
• Counterfeit drugs may be extremely harmful. In some cases they have been found to contain no active ingredient or in other instances too much. Patients have been hospitalized because they were given fake instead of genuine pharmaceuticals.