Bush gets tougher on knockoff parts and components

WASHINGTON — The Bush Administration recently signed a new law that cracks down on counterfeiters of manufactured goods.

The new law, says Daniel Baldwin, acting assistant commissioner of the Office of Strategic Trade, U.S. Customs and Border Protection, enables the government to attack the new techniques that counterfeiters are using and adapt to their “ever changing practices of intellectual property theft.”

In his remarks President Bush said that the problem of counterfeiting has grown in recent years and is costing hundreds of billions of dollars and harming the domestic economy.

A part is a part? Not to suppliers like Bendix

“Counterfeiting hurts businesses. They lose the right to profit from their innovation. Counterfeiting hurts workers, because counterfeiting undercuts honest competition, rewards illegal competitors. Counterfeiting hurts consumers as fake products expose our people to serious health and safety risks,” Bush said in a statement. “Counterfeiting hurts our national security, as terrorist networks use counterfeit sales to sometimes finance their operations.”

Specifically, the bill is designed to strengthen current laws against trading counterfeit labels and packaging. While it was already illegal to manufacture, ship, or sell counterfeit products, Bush says the legislation closes a loophole allowing the shipment of falsified labels or packaging, which counterfeiters could then attach to fake products in order to cheat consumers by passing off poorly made items as brandname goods. “By closing the loophole, we will help keep honest Americans from losing business to scam artists — and protect consumers from being cheated out of their hard-earned dollars,” Bush said.

The law also strengthens penalties for counterfeiters and gives prosecutors new tools to fight them. The bill requires courts to order the destruction of all counterfeit products seized as part of a criminal investigation and requires convicted counterfeiters to turn over their profits and any equipment used in their operations.

Truck and autoparts manufacturers are some of the hardest-hit victims of counterfeiting.

Last week at the Mid-America Trucking Show in Louisville, officials from Bendix and ArvinMeritor commented on the effect counterfeiting is having on their businesses — especially foreign knockoffs from China, where the counterfeiters are hard to catch and prosecute.

Bendix President and CEO Joe McAleese said at a MATS press conference that
counterfeits are flooding the North American market. So far, the company has stepped-up legal action against patent infringement with the help of foreign governments in Asia, which are starting to offer more support in tracking down counterfeiters.

At the same time, however, knockoff parts are getting tougher to detect, admits McAleese. “The appearance is so similar to our own goods that sometimes even our own engineers can’t tell them apart until we cut them open and test them. That’s when you see the difference — in performance,” he said.