Survey: Intellectual Property Theft now accounts for 31% of Global Counterfeiting.

Tuesday February 15, 2005 — Calgary, Canada — Based on the past month of worldwide counterfeit enforcement activity (investigations, raids, seizures, arrests, charges, convictions, sentences, civil litigation, public announcements), as reported through the DOPIP Security Counterfeit Intelligence Report, more than 256 incidents were analyzed from 42 countries.

The most profitable items to counterfeit (based on seizures and losses) include:

1. Financial Instruments, $571 Million, 96 incidents, (currency, checks, money orders, treasury bonds, credit/debit cards)
2. Other Goods, $122 Million, 1 incident (building materials)
3. Clothing & Accessories, $23.5 Million, 17 incidents.
4. Identification, $8.5 Million, 65 incidents (passports, visas, drivers licenses, ID cards, birth certificates).
5. Entertainment & Software, $8 Million, 34 incidents (CDs, DVDs, software)
6. Cigarettes, $5 Million, 4 incidents.
7. Industrial Goods & Supplies, $1.5 Million, 4 incidents (adhesives, ball bearings, insecticides).
8. Drugs, Jewelry & Watches, Computer Equipment & Supplies, Food & Alcohol, Other Documents, Electronic Equipment & Supplies, Perfume & Cosmetics, and Toys, $0.5 Million, 34 incidents

For more information: http://www.goldsec.com/Security_Research.htm

The most popular of 73 brands and trademarks to counterfeited:

• Microsoft (7.5% of all incidents), Sony (4.3%), Adobe (3%), Louis Vuitton (3%), Viagra (3%), Autodesk (2%), Christian Dior (2%), CSA (2%), Gucci (2%), and Nike (2%).
• Less popular were: Abercrombie & Fitch, Adidas, ASICS, Bond All, Canon, Converse, Diesel, Fendi, Harley-Davidson, HP, Montblanc, Oki, Puma, Rolex, Timberland, and Tommy Hilfiger.

In summarizing the months activity, Glen Gieschen, Managing Director of Gieschen Consultancy stated "In January, the trend of counterfeit activity related to intellectual property such as copyright or trademark infringement continues. Counterfeit goods previously unknown to the buyer are now being sought out by consumers as a means to increase disposable income and show disapproval over perceived inflated prices.

To combat this activity brand owners are focusing on multiple strategies to protect consumers and minimize their losses. Brand protection technologies, once used exclusively to prevent and detect counterfeit passports and currency, are now being applied to packaging, products and production techniques. Controversial in nature, brand owners lead the way in implementing radio frequency identification (RFID), nanotechnology, DNA coding, and digital watermarks to allow their investigators, law enforcement, customs, distributors and ultimately consumers verify the authenticity of items.

Brand enforcement has become another tool to fight counterfeiters. Armed with dozens of lawyers and hundreds of investigators, companies such as Pfizer and Philip Morris are tracking down both criminals and terrorists who are funding their organizations through the manufacturing, distribution and sales of counterfeit items.

Brand owners are also pressuring governments directly and through anti-counterfeiting organizations to enact legislation and better enforce existing laws which provide stiff penalties and deterrence. Recently, a number of these organizations banded together to call on the US government to penalize China for failing to meet is obligations to protect brand owners from counterfeiting under WTO intellectual property protection guidelines.

A number of other counterfeit activities should be of concern to consumers, companies and governments. In January, 11% of counterfeiters expanded into multiple forms of counterfeiting. The most popular combination is imitation financial instruments combined with false identification, fake drugs, and breeder documents which accounts for 55% of this activity. It is also common to see other combinations such as industrial goods with electronic equipment and clothing, or jewelry and watches with clothing.

Most countries are genuinely concerned about counterfeiting, however the most active in reporting incidents are the Philippines ($289 Million), Jordan ($280 Million), Russia ($122 Million), France ($21 Million), India ($7.5 Million), Indonesia ($5.5 Million), UK ($4.9 Million), USA ($3.3 Million), and South Africa ($3.1 Million). In more than 40% of incidents, China was cited as the country of origin for counterfeit goods, yet ranked 18th ($1.0 Million) for counterfeit activity.

Counterfeiting is also becoming a hobby and career for younger, less educated individuals. The average age of a counterfeiter is 34 (Clothing & Accessories), 36 (Entertainment & Software), 33 (Financial Instruments), 31 (Identification), 47 (Other Documents). In 20% of the cases simple methods are used to duplicate the items. 12% of entertainment and software is reproduced with standard computers, CD and DVD burning equipment. 34% of financial instruments are duplicated using computers, printers, encoder/decoders, copiers, scanners, and offset presses. 25% of counterfeit food and alcohol products are manufactured by purchasing expired stock and repacking as new items. 19% of fake identification is created using computers, scanners, printers, laminators, embossing equipment, typewriters, and digital cameras.

False identification is another significant activity accounting for more than 27% of all counterfeit incidents. 13% of criminals and terrorists use fake identification to conceal their identity when they are involved in counterfeiting financial instruments. The most common forms of fake ID are drivers licenses (23%), passports (21%), other government issues ID (18%), identity cards (7%), social security cards (5%), birth certificates (4%), visas (3.7%), and alien registration cards (2.5%). Other less common forms are military ID, international driving permits, re-entry permits, residency permits, and work permits.

Counterfeiting is increasingly becoming a primary means of funding criminal and terrorist organizations. In 11% of the incidents reported, the names of 35 entities alleged to be involved in this illegal activity were release to the public, the most common being Al-Qaeda."

For more information: http://www.goldsec.com/Alleged_Counterfeit_Suspects_Entities.htm

• 42 Countries reported counterfeit activity in January which Australia, Bahrain, Bangladesh, Brunei, Canada, China, Cyprus, Finland, France, Germany, Greece, Hungary, India, Indonesia, Ireland, Japan, Jordan, Kenya, Malaysia, Malta, Mexico, Namibia, Nepal, Nigeria, Pakistan, Philippines, Romania, Russia, Serbia, Singapore, Slovakia, South Africa, South Korea, Spain, Thailand, Turkey, UAE, UK, USA, Venezuela, Vietnam, and Yemen.

The current months counterfeit activity: http://www.goldsec.com/

The full report for January can be purchased from Gieschen Consultancy.

About DOPIP SCI Reports

DOPIP is a powerful source of information regarding illegal activities such as counterfeiting, forgery, product tampering and diversion. It provides breaking news reports and analysis relating to document, product and intellectual product security. Security technology providers, enforcement agencies, trade organizations, and brand owners will find this information indispensable for detection, deterrence and prevention. Standard or Premium Sources DOPIP SCI Reports are available as an annual subscription for $295 USD and $835 respectively.

For more information visit http://www.goldsec.com/Security_Updates.htm.


About Gieschen Consultancy

Gieschen Consultancy, provides counterfeit intelligence analysis and security research relating to documents, products and intellectual property. Gieschen Consultancy educates clients regarding counterfeiting issues, and assists in developing anti-counterfeiting, brand protection and enforcement solutions. Providing the knowledge of the criminal Modus Operandi (methods of operation), legal and political issues, security technology, industry reports and statistical information, effective strategies can then be developed, implemented and monitored.

For more information visit http://www.gieschen.com/.

Contacts

Glen Gieschen
Counterfeit Intelligence Analyst
Gieschen Consultancy
Glen@Gieschen.com
Phone 403-256-5680
Calgary, Alberta Canada