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  1. Consumer Products: counterfeit problems and anti-dumping measures Mr. Pierre de RUVO IECEE Executive Secretary

  2. Definitions • DUMPING:Selling Goods abroad at a price below that charged in the domestic market. • COPYING:Reproduce or make an “exact” copy of an electrical equipment or components. • COUNTERFEIT:Imitating something e.g. Electrical equipment or components, superior in quality and performance. • FAKE:Fraudulent, having a misleading appearance. Not genuine or real; being an imitation of the genuine e.g. electrical equipment or components. Source: Thesaurus Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  3. What is a counterfeit product? The legal definition under trademark law describes a product bearing a mark that is "identical with or substantially indistinguishable from" a genuine trademark registered. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  4. Do counterfeit electrical products really present any health and safety problems? It is a fact that counterfeit electrical products can be dangerous and unsafe due to the fact that they use second choice of raw material, have poor assembly and lack third party testing & Certification Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  5. Counterfeit has reached the electrotechnical sector Trademark counterfeiting has reached the electrical sector. Counterfeit electrical products impact both well-known industrial and consumer brands, as well as registered certification marks of IECEE Registered Certification Bodies. Counterfeit electrical products can generate significant safety hazards and, left undetected, can cause deaths, injuries and substantial property loss in the home and workplace. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  6. Counterfeit has reached the electrotechnical sector Although counterfeit products may appear as excellent copies of the genuine product, market control and investigations show that many are sub-standard and fail to pass IEC safety requirements. However detection based on appearance can be difficult and may only be determined after inspecting suspicious products and performing the relevant safety tests. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  7. Counterfeit has reached the electrotechnical sector Counterfeiters often use low level (quality) materials and avoid key manufacturing steps to reduce the cost of their products, allowing them to be sold at prices that no genuine brand manufacturer can match. Such counterfeit electrical products can overheat or cause short circuits and lead to fire, shock or explosion. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  8. What are some examples of electrical products that have been targeted by counterfeiters? • small household appliances • electrical tools • electric motors • control relays • circuit breakers • fuses • switches and lighting controls • lamp ballasts • communications wire and cable • electrical connectors Information graciously authorized by NEMA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  9. Tips can help avoid potentially dangerous counterfeit electrical products • Look for the IECEE NCB certification marks. If you have concerns about the marks, contact the relevant Certification Bodies. • Buyers should beware of bargains that seem too good to be true. Products may be cheap because they are counterfeit or defective. • Use established vendors who purchase their goods from legitimate distributors and genuine manufacturers. Fly-by-night vendors may not be willing to grant refunds for electrical products that do not perform as they should. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  10. Tips can help avoid potentially dangerous counterfeit electrical products • Check the warning label. It should be free of grammatical errors and not conflict with information elsewhere on the package. • Look for the name and contact information of the manufacturer. If this information is missing, consider purchasing electrical products elsewhere. • Avoid no-name products. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  11. The Impact of Counterfeiting Counterfeiting of consumer products is a growing problem with significant impacts on consumers, businesses and entire economies. Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  12. The Impact of Counterfeiting Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  13. The Impact of Counterfeiting Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  14. The Impact of Counterfeiting Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  15. The Impact of Counterfeiting • Counterfeiting costs an estimated US$500 billion per year • Hundreds of thousands of jobs are lost to counterfeiting • Consumers are exposed to health and safety risks • Proven links to organized crime • Massive reduction of tax revenues Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  16. Counterfeiting of Electrical Products Counterfeiters operate outside the law – and outside the conformity assessment schemes. The counterfeiting of conformity assessment marks is particularly egregious and undermines the IEC objectives. Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  17. Counterfeiting of Electrical Products • Counterfeiters do not use safety standards in the production of cheap, inferior knock-offs • These products present significant health and safety hazards to consumers around the world • Counterfeiters do not invest in or utilize quality management practices in their operations • Counterfeiters are not concerned with the protection of our environment Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  18. Case Study – Underwriters Laboratories Aggressive anti-counterfeiting programs can have real impact. Underwriters Laboratories Inc. (UL) started their extremely successful program in 1995. Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  19. Case Study – Underwriters Laboratories • Key components must include: • Top management support • Dedicated staff and resources • Zero-tolerance for counterfeiting • Strong partnerships with law and code enforcement authorities around the world – this means real time support and rapid turnaround time on all requests for information • Proactive training initiatives • Covert and overt anti-counterfeiting technologies Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  20. Case Study – Underwriters Laboratories UL’s dedication to their Anti-Counterfeiting Program and unwavering support of their zero-tolerance stance has resulted in: • Criminal convictions in both the US and Canada • More than 1,200 US Customs seizures of goods bearing counterfeit UL Marks since the Program’s inception Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  21. Case Study – Underwriters Laboratories • Millions of dangerous products have been intercepted and destroyed before ever reaching the stream of commerce • Heightened awareness of the hazards associated with unsafe, counterfeit electrical goods • More than 2,000 law enforcement and code officials around the world have been trained to spot counterfeit UL Marks Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  22. Take a Stand We all have a responsibility to take part in the fight against counterfeiting. Counterfeiting and intellectual property theft are receiving more attention as we begin to fully realize the serious impact of these crimes. Only in partnership we can make a difference. Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  23. Take a Stand • Share information • Law enforcement • Industry Associations • Anti-Counterfeiting Groups and Coalitions • Have a strong internal program to bring focus to the issue • Adopt a zero tolerance policy • Be active in the efforts to seek better laws and stiffer penalties for counterfeiting Information graciously provided and authorized by UL Inc. Northbrook USA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  24. COPYING….COUNTERFEITING….DUMPING…. Information graciously provided and authorized by TUV SUD Product Service Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  25. “Copy”Tool” Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  26. Original Bosch Tool CopyTool Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  27. “Original Copy” Rating Plate Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  28. Classical Market Surveillance Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Depart-ment Store Certificate Holder Challenging Mechanism Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  29. Classical Market Surveillance Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Depart-ment Store Certificate Holder Challenging Mechanism Container to be shipped Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  30. Classical Market Surveillance Pre-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Depart-ment Store Certificate Holder Challenging Mechanism Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  31. Classical Market Surveillance Pre-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Depart-ment Store Certificate Holder Additional Container to be shipped Challenging Mechanism Container arrives in Germany Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  32. Classical Market Surveillance Pre-Shipping Inspection Post-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Container arrives in Germany Depart-ment Store Certificate Holder Additional Container to be shipped Challenging Mechanism Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  33. Classical Market Surveillance Pre-Shipping Inspection Post-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Container arrives in Germany Depart-ment Store Certificate Holder Additional Container to be shipped Additional Container arrives in Germany Challenging Mechanism Container in Distribution Center Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  34. Extended Post-Shipping Inspection Classical Market Surveillance Pre-Shipping Inspection Post-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Container arrives in Germany Container in Distribution Center Depart-ment Store Certificate Holder Additional Container to be shipped Additional Container arrives in Germany Challenging Mechanism Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  35. Extended Post-Shipping Inspection Classical Market Surveillance Pre-Shipping Inspection Post-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Container arrives in Germany Container in Distribution Center Depart-ment Store Certificate Holder Additional Container to be shipped Additional Container arrives in Germany Additional Distribution Center Challenging Mechanism Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  36. Extended Post-Shipping Inspection Classical Market Surveillance Pre-Shipping Inspection Post-Shipping Inspection Classical GS-Marking and Factory Inspection Manu-facturer under follow up control Container to be shipped Container arrives in Germany Container in Distribution Center Depart-ment Store Certificate Holder Additional Container to be shipped Additional Container arrives in Germany Additional Distribution Center Fully out of control and responsibility of certification body Challenging Mechanism Additional Manu- facturer Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  37. Safe Products through 3rd Party Involvement Number of certificates issued by German certification bodies per year 50.000 Percentage of products failing in first test for safety problems 50 %  number of product types being unsafe in first approach 25.000 Average number of individual products per type 40.000  number of unsafe products that would come to the market without 3rd party involvement1.000.000.000 Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  38. Safe Products through 3rd Party Involvement Pro-active involvement ofindependent 3rd party testing laboratories and certification bodies prohibits 1.000.000.000 to come to the market. Without this these products have to be detected and removed (re-called) re-active through market surveillance authorities. The majority of these products fall under low voltage directive which has pure CE Marking and no mandatory involvement of notified bodies! Information graciously provided and authorized by TUV SUD Germany Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  39. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS With the rapid movement of goods in our global economy, counterfeit and unsafe products are arriving in ever greater quantities on national markets and posing a major challenge for countries worldwide. As counterfeit goods flood markets, they are undermining our economies, depriving Governments of revenue from taxes, and often endangering the health and safety of consumers. Some of these goods can even be life-threatening – such as adulterated or contaminated food, hazardous toys or falsified spare parts for electrical goods, cars or aircraft. Counterfeits goods, according to the World Customs Organization, now account for around 5-7% of international trade. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  40. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS To examine how current market surveillance activities could be expanded to provide better consumer protection, delegates from 42 countries met on 24 and 25 October at the United Nations Economic Commission for Europe (UNECE) during its Second International Forum on Market Surveillance and Consumer Protection. The 110 participants included representatives of national and international standards organizations, patent offices, consumer protection agencies, regulators, and industry. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  41. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS • The Forum’s purpose was to work towards finding a consensus on how to approach the issues of consumer safety and protection and the fight against fraud through a “broader concept” of market surveillance. A draft recommendation was circulated for comment and by June 2006, the UNECE hopes that a formal UNECE Recommendation on Market Surveillance can be agreed. • A second objective of the Forum was to help public authorities from countries in transition and developing countries to obtain first-hand information on how to protect human health and safety, animal and plant life and health, as well as the environment, without introducing trade restrictive practices. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  42. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS Counterfeiting is not only an infringement of the intellectual property rights of individuals and companies, it creates a disincentive for investors and hinders economic development. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  43. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS Some success stories in combating this type of crime were reported during the Forum. In Ukraine, for instance, the authorities working together with Procter and Gamble, successfully detected and destroyed a lucrative illegal market in counterfeit Procter and Gamble products. In a survey conducted by Procter and Gamble in Ukraine in 1999, that company had found that a staggering 43 per cent of the hair-care products and 23 per cent of the laundry products using its brand names were counterfeit. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  44. COMBATING COUNTERFEIT GOODS ON INTERNATIONAL MARKETS: UN BODY EXPLORES NEW SOLUTIONS • As a result of an intense campaign that consisted of public confidence building and deploying mobile testing laboratories in Ukraine for on-the-spot testing of suspect products, the company jointly with the Ukrainian authorities succeeded in completely eliminating the counterfeit products. • Among the numerous concerns expressed during the Forum were difficulties in controlling misleading or false language. A representative of an Australia/New Zealand regulatory office highlighted the difficulty of controlling the language of marketing; specifically when statements about products were “true but misleading”. Source: From United Nations Economic Commission for Europe (UNECE) Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  45. Frequently Asked Questions FAQ • Fake ? • Counterfeiting? • Copying? • Why….why…why…. Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  46. What is the difference between a counterfeit trademark and an infringing trademark? All counterfeit marks are infringing.  Infringing marks also include a broader class of marks that are "confusingly similar" to genuine marks.  While counterfeit marks include marks that are "substantially indistinguishable" from a genuine mark, this definition contemplates only minor or trivial differences from the genuine mark.  The "confusingly similar" test for infringing marks contemplates wider differences. Information graciously authorized by NEMA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  47. What is the practical difference between counterfeit and infringing marks? There are differences in legal remedies available.  A trademark owner can seek an “ex parte” seizure order from a court in the case of counterfeit goods. For a merely infringing mark, a trademark owner can pursue an injunction, which is granted only after notice to the defendant and a hearing.  Similarly, Customs must seize and destroy counterfeit goods, but in the case of merely infringing goods, goods may enter the country if the infringing marks are obliterated. Information graciously authorized by NEMA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  48. What must I do to protect my brand to deal with the threat of counterfeiting? • Register your trademarks in all countries where you do business or plan to do business if you have not done so already.  This is essential in order to protect your brand rights in every country.  Consult with a trademark attorney to determine the most effective and efficient way to do this, including registration abroad.  • In the United States, record your registered trademarks with U.S. Customs and Border Protection.  This allows US Customs to protect your brand at the port of entry.  • Develop within your company a brand protection or anti-counterfeiting program combining executive, legal, technical and sales resources to combat counterfeit products.  Train key personnel about how to recognize if your brand is being wrongfully exploited and what to do about it. Information graciously authorized by NEMA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  49. What if I suspect that a certification mark on an electrical product is not genuine? Contact the certification organization directly.  Most IECEE Members have active anti-counterfeiting programs. Please consult the IECEE Web Site: www.iecee.org http://www.iecee.org/CBSCHEME/html/cbcntris.htm Information graciously authorized by NEMA Consumer products: counterfeit problems and anti-dumping measures, Berlin Affiliate Workshop 2006

  50. Thank you for your attention.Any Questions?