May 7, 2008

Take a Stand: Stop Counterfeiting with Industry Data Warehouse

While counterfeiting is rooted in paper money, the issue is also commonplace in many industries. Today, counterfeiters are producing fake electrical products, automotive and aviation parts, pharmaceuticals, medical equipment, computers, software, apparel and cosmetics. Chances are if a product has value or popularity then someone or some bogus company is trying to counterfeit it for their own financial gain. Worldwide counterfeiting is a $500 billion problem of which $280 billion occurs in North America. In fact, counterfeit products now make up 8% of the world trade, with much of the revenues from large scale operations going to organized crime and, in the worst case, terrorist organizations to pursue acts of crime. The FBI complied strong evidence that the terrorists involved in the 1993 World Trade Center bombing used money made from counterfeit textiles sales from a store in New York City.

End users and consumers think they are getting originals but end up with substitutes that bear counterfeit corporate logos and unauthorized product safety certification marks.

The US government has taken a stronger stand on counterfeiting through enactment of new laws that increased jail time and upped the ante on how much an individual or organization can be fined.


To deter counterfeiters, industry organizations like NAM, NEMA and NAED are making this matter a top priority urging the US Government to stiffen the laws and make it a top trade policy issue with China, where the bulk of counterfeit parts are produced.

Companies are taking action as well by investing in leading edge technologies and security features and have spent up to $4MM (USD) per year to combat counterfeiting and preserve the integrity of their brands. Gillette was one of the first companies to integrate Radio Frequency Identification (RFID) devices with their packaging to help decrease counterfeiting.

One of the easiest ways to assist in an anti-counterfeiting campaign is for the manufacturers to inform their wholesale distributor trading partner, which of their products carries a product safety certification, be it UL, CSA group or one of the other approved certification organizations. Industry Data Warehouse (IDW) can deliver that information through the population of field 5.290.10 as outlined in the industry data standard (Product Descriptor Data or PDD). Today only a handful of manufacturers are providing product safety certification information via IDW.

There is no single anti-counterfeiting measure. However, there is strength in numbers if the channel bands together to stop counterfeiters. If we want to minimize counterfeiting efforts, we need to increase the number of gatekeepers who manage the manufacturing and distribution product cycles. Distributors should demand that their manufacturers populate the certification field per the PDD standard, avoid buying products from unknown or new product sources and stick with long standing trading partners. They can hold education sessions with your contractors, inspectors and other end customers on counterfeit goods.

Don’t be misled that counterfeiting only happens to others. There are many examples of where counterfeit conduit, circuit breakers, lamps, etc. have been discovered. Take action; take a stance and start by identifying which of your products are certified via IDW.