Counterfeit Consumer Goods

Counterfeit consumer goods (knock-offs in colloquial language) are by definition goods infringing the rights of a trade mark holder by displaying a trade mark which is either identical to a protected trade mark or by using an identification mark which "cannot be distinguished in its essential aspects from such trade mark".
The spread of counterfeit goods has become global in recent years. According to the Counterfeiting Intelligence Bureau (CIB) of the International Chamber of Commerce (ICC), counterfeit goods make up 5 to 7% of world trade. A report by the Organisation for Economic Co-operation and Development (OECD) states that up to $200 billion of international trade could have been for counterfeit and pirated goods in 2005, and around $250 billion in 2007. Other estimates conclude that a more accurate figure is closer to $600 billion lost, since the OECD estimates do not include online sales or goods counterfeited and sold within the same country. The range of counterfeited consumer goods is wide. Besides numerous smaller goods such as watches, purses, cigarettes, movies and software, larger items such as cars and motorcycles are also being knocked off, including Porsches and Ferraris. There is a rapidly growing trade in counterfeit drugs and computer parts, with some mock parts discovered inadvertently in use by NASA, the U.S. Navy and the U.S. Army, which alone estimates that the growth in counterfeit electronics has more than doubled between 2005 and 2008. Among the causes for its growth are many: more of the world's manufacturing is being transferred overseas, the growth in internet e-commerce sales, and the fact that consumers hit by the recession will seek out lower-cost items.

The United States faces the most economic impact, being the world's largest consumer nation. Underwriters Laboratories (UL) confirms that counterfeiting is "a thriving multi-billion dollar global industry," where the risks of legal consequences are low. In addition, counterfeiting profits fund other organized criminal activities. In 2007, it estimated 750,000 jobs had been lost in the U.S. alone due to counterfeiting. The value of counterfeit goods seized at U.S. borders jumped 40% in one year, from 2007 to 2008, while Europe seized over 50% more during that same year.

Counterfeiters use the reputation of a trademark, which brand manufacturers have built up on the basis of the quality of their products, to fool consumers about the true origin and quality of the goods. —German Customs– Official Homepage

U.S. Attorney General Eric Holder stated that "intellectual property crimes are not victimless. The theft of ideas and the sale of counterfeit goods threaten economic opportunities and financial stability, suppress innovation and destroy jobs.” Director John Morton of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) adds that "the sale of counterfeit U.S. brands on the Internet steals the creative work of others, costs our economy jobs and revenue and can threaten the health and safety of American consumers. . . we are dedicated to protecting the jobs, the income and the tax revenue that disappear when counterfeit goods are trafficked.” According to the U.S. Chamber of Commerce, for every $1 invested in fighting against counterfeits, the country gains $5 in new tax revenue. Counterfeited spareparts (speaking for example of forged brake linings or safety valves) endanger road transport and general aviation as well as the associated industries. Counterfeit products are often produced in violation of basic human rights and child labor laws. As widely reported the profits support terrorist groups, drug cartels, people smugglers and street gangs. Crackdown on counterfeit goods is thus not only a matter of job security for various countries, but one of national and international security.