Lexology; Counterfeits in the Digital Marketplace
[Kip
Currier: Timely article, on this Cyber Monday, and in light of my IP
course's lecture last week on IP Piracy and the Dark Web.
Anybody
else noticing how so many goods fall apart or break really quickly
these days?! Glazed gardening pots that crack and disintegrate in one
season. Designer metal shower hooks that break off in one year. Ear and
nose trimmers that conk out after one use. Clothes that fray--sometimes
even after just one wash cycle in cold water. And on and on and on...
As
this article makes clear, too, it's annoying when some goods aren't
what they claim to be and have a built-in obsolescence of about zero.
It's downright dangerous when they explode or catch fire, and when they
contain arsenic, lead, and other harmful substances that kids and adults
are breathing in and coming into contact with. And let's not forget
impacts of counterfeit items on animals, whether farm ones or animal
companions, in the form of contaminated feed.
The
Trump administration and some federal agencies have made some good
steps in the past couple of years in better enforcing IP rights and
cracking down on counterfeit goods. The U.S. Congress also needs to take
more aggressive action, with civil and criminal consequences, to rein
in and hold bad actors and entities accountable and ensure public safety
and health are paramount. "Caveat emptor" should not and must not exculpate disreputable sellers from facing the ramifications of their amoral actions.]
"Counterfeiting has moved beyond high-priced luxury goods to low-cost
everyday items. Many of these fake products pose real dangers: face masks with arsenic; phone adapters that can electrocute you; computer chargers that fry your hardware; batteries that blow up.
These counterfeits infiltrate online marketplaces, where they co-mingle
with authentic products in warehouses and ship to unsuspecting
consumers. With millions of goods leaving fulfillment centers every day,
brand owners and consumers must wrestle with a billion dollar problem:
how do you police the largest marketplace in the world?
In January of this year, the U.S. Government Accountability Office filed a report
detailing the results of a federal investigation in which 47 products
were purchased from five online retailers, including Amazon and
Walmart.com. All of the products were advertised as new, shipped from
the United States, and sold by third-party sellers with customer ratings
above 90%. Nearly half were counterfeit.
How does this happen? The five websites investigated have sizable
“marketplaces,” virtual storefronts that let people other than the
hosting company sell merchandise. For perspective, more than half
of the goods sold on Amazon are from these third-party sellers. Anyone
with an ID and a credit card can open a virtual storefront; few
identifying details are required to set one up, and these details are regularly falsified. Since 2014, manufacturers from China (the world’s largest maker of counterfeit goods)
have been able to sell directly to consumers in the Amazon Marketplace.
In fulfillment centers, where products are picked up for packaging and
shipment, goods from third-party sellers and goods direct from brand
owners co-mingle.
The resulting product pool is a mix of authentic and counterfeit goods,
all sold as the same product and often for the same price."
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