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The Dangers of Counterfeit Goods

September 11, 2020 Author: Erin Harris, Director of Customer Experience

Counterfeit goods can be found everywhere and while sometimes cheaper than their authentic counterpart, could pose a danger to the general public. Have you seen or had a personal experience with a counterfeit product? Let’s take a look at how counterfeit products can have a negative impact on our lives.

Product Quality Control and Safety Issues

There are companies such as UL that specialize in product testing for health and safety standards. It’s important. No one wants something that will make them sick or pose a safety issue that could hurt or even kill them.

Companies that follow the rules with health and safety regulations take them very seriously with testing, quality assurance, product licenses, and certifications, etc. to ensure their products are safe and to avoid lawsuits and other penalties.

If a counterfeit product enters the market, it’s a safe assumption that no due diligence has been done regarding health, quality, and safety measures.

Example

In the United States, there is a large electronic component manufacturer that puts each new product under rigorous product testing to ensure that it meets or exceeds regulatory policies as well as company standards to ensure specs meet expectations.

Some testing includes:

  • Exposure to extreme heat/cold - Where is the point of failure in various temperature ranges?
  • Insulation testing and fire hazards - If placed in typical environments, will items in close proximity catch fire because of poor insulation?
  • Run time testing - How long will this product last under normal and extreme operations thus determining the product’s life expectancy?

Failure or undesired results of any of these tests will cause the product to go back to development for adjustments or for refined product specifications. Aside from the threat of counterfeit products, false-advertising is not in a company’s best interest.

Counterfeit products often achieve lower price points by eliminating these crucial testing and quality control procedures.

Trademark Infringements

The United States is a very litigious country, but we love to trademark and patent our goods and their affiliated assets. We take pride in the products we develop. A counterfeit product undermines the integrity of a trademark.

While a trademark infringement won’t grant the violator any jail time, they could still be met in court with hefty lawsuits.

Dangerous Material Substitutes

Counterfeit goods may be close to the real thing but they may be made of materials that could be considered dangerous. Dangerous in terms of flammability, or containing lead-based components, prohibited cancer-causing agents, or just undeclared materials of the unknown until something bad happens.

Looking back at our example above, those products are rated using IP Code (Ingress Protection Code) and NEMA (National Electrical Manufacturers Association) for their enclosure materials.

The example products are rated at IP67 which is “dust tight" and protected against immersion for 30 minutes at depths 150mm - 1000mm as well as NEMA 4X so they can withstand high-pressure washdowns. These are great for food and beverage manufacturing facilities.

What if a counterfeit product comparable to the one mentioned above that claimed to be IP67, or NEMA 4x was used without realizing it was of lesser quality? The first spray down from a high-pressure hose could cause it to shatter and contaminate surrounding machinery, food products, packaging, etc.

What if not all of the broken pieces are found? Expensive machines break because something got stuck in a gear, foreign particles are found by the end consumer, hopefully, before it reaches their mouth, and now the company is facing expensive repair fees while their brand has been damaged. They may also be facing government fines and penalties. The consequences are not worth the risks involved.

Check out the health and safety risks associated with medications and medical devices in this recent article about customs agents intercepting a shipment of counterfeit COVID-19 tests. It’s safe to say that the goods inside the package didn’t match what was listed on the export documentation.

With COVID-19, we need all the help we can get with prevention, diagnosis, and treating this virus. Counterfeit tests are not helpful. If these counterfeit tests had reached the public, it could’ve been incredibly harmful to public health.

Violations of this matter could result in hefty fines, possible jail time, and enrollment in the Restricted Parties database.

Insult to the real product designer/manufacturer

To imitate someone is to pay the person a genuine compliment — often an unintended compliment. -Oscar Wilde

Is imitation the sincerest form of flattery?

No, this quote does not qualify here. In school and in journalism, we are informed and reminded often that plagiarism is just plain wrong. It’s copying someone else’s work and taking the credit.

Counterfeiting is the same concept. Someone copies someone else’s product and sells it as their own, stealing profits and disrespecting the time the originator spent researching, developing, marketing, and all the other activities that go with it.

This could easily go along with trademark infringement but at this level, it’s more personal.

How Does a Company Avoid Their Products Being Counterfeited?

It’s a challenge to keep your products from being counterfeited. It’s all about staying ahead of the game.

Have documentation stating every component and material that the products are made of. A company could be held liable for an incident if the product is too close to tell the difference, they may have to prove and defend that the counterfeit product is not theirs.

Maintain records of any applicable, trademarks, patents, and certification documents. This may even include registering trademarks in countries known for producing counterfeit products.

Educate customers as much as possible about the product and the potential that there are counterfeits in existence. Enough education about the company’s brand, they should be able to identify a counterfeit product against the real thing.