Wednesday, November 28, 2007

These Batteries are HOT!

Once again, counterfeit laptop batteries are making news. This week, IBM filed a lawsuit against an online retailer, ShenTech, that sells replacement laptop batteries over the Internet, claiming that the batteries are knockoffs that have a tendency to catch fire. Our review of the site found some batteries claiming to be Lenovo (which purchased IBM's laptop business in 2005), and others being "Replacement" IBM. IBM says it did a sample purchase of 12 batteries from the site, and claims they are all fake. It was following up on an instance of a customer's laptop battery overheating.

Elsewhere on the ShenTech site, one can purchase an iPod Nano alike MP3 player ... that looks a lot like an iPod Nano ... but of course isn't.

In the past, IBM has recalled batteries in the past for overheating.
In 2005, for instance, there were four notebook battery recalls--from Dell, Hewlett-Packard, Apple, and Battery-Biz. These weren't necessarily counterfeit - only incorrectly manufactured.

Monday, November 26, 2007

Tiffany vs. eBay ... what next?

Each side has presented its closing arguments. Although the Judge gave little indication of how he might rule, he pointed to legal precedents that have found that if a distributor continues to supply a product knowing it is engaging in trademark infringement, that distributor is "contributorily responsible" for any harm done as a result of the deceit.

If Tiffany prevails, then eBay is faced with the challenge of verifying the authenticity of products on its site (or ban their sale). There's no way eBay can guarantee the authenticity of products its customer sell online, but a number of possibilities are:

- insist upon the seller showing a receipt of purchase (of course the receipt could be fake, too)
- have a third party physically inspect and authenticate the product (expensive, and currently there aren't trusted third parties who do this), such as an escrow service
- authenticate the products internally, and be the trusted third party (expensive, tough to scale and not core to eBay's value proposition. There is a company that is trying this:
- Provide sellers with a means to display to buyers some other form of authenticity (this would require Tiffany to provide its customers with some kind of proof of authenticity, such as a secure code or certificate)

Sunday, November 18, 2007

All the News (and QR Codes) That's Fit to Print

Today marks a watershed in QR Code history. There's a QR Code in the New York Times, as part of a Blue Nile ad.

Now, the QR Code has been around for years, of course, and is fabulously popular in Japan (where it was invented by Denso Wave - who made the technology freely available, but still own the trademark). Something like 50% of the installed base of cell phones in Japan can read the QR Code, and it shows up on bus schedules, magazine ads, McDonald's wrappers - even the sides of buildings. Scanning barcodes has been tried a lot in the US (this blog has a good history), but as of yet, there's not been much traction. The main stumbling block has been the tight control that cell phone operators maintain over the handset design and applications.

Now it looks like things may be changing. Nokia has launched a couple of (high end) handsets that work in the US and can read barcodes, as well as a microsite devoted to barcode reading. Even more significantly, the NY Times ad the first sign that Google is dipping a toe in the water. It makes good sense - now Google can detect whether someone responded to an Ad posted in 'dead tree' media. A model like AdWords is conceivable - the advertiser pays one amount to publish the ad, then again every time someone clicks on the QR Code. There's a long way before QR reader adoption reaches critical mass in the US - but Google's GPhone will likely support development of QR Code readers (to enhance the value of the ads). Maybe the next gen iPhone will sport a macro lens and barcode reader too? (that's just wishful thinking, of course).

As a cautionary note, let us not forget the hapless CueCat ... but the difference now is this uses a cell phone, not a cat-shaped barcode reader.

(In case you're wondering - the QR Code conbtains:

Thursday, November 15, 2007

Watch this space...

This week, Tiffany & Co. is suing eBay, Inc. in a New York court. (see article here) This case will likely set a precedent whatever the outcome. Tiffany maintains that eBay should be responsible for policing its site for counterfeit goods. eBay maintains that it does everything that it is obligated to do to prevent counterfeits being posted, and provides brand owners with a mechanism (VeRO) to take down suspect postings.

In our opinion, this case highlights the problems facing brand owners - that there is currently no way for anyone (Tiffany, eBay, or the end consumer) to quickly and confidently determine the authenticity of a product. No matter who wins in this case, the problem of detecting counterfeits will remain. If eBay were to lose, then it is hard to see how they could possibly check the authenticity of the millions of items posted every day on its site. The best example of how this can be achieved is on eBay Motors - where every vehicle is checked against a third party VIN database - thereby determining its authenticity, and whether it is a lemon. Unfortunately, there aren't currently equivalents to the VIN database for any other products. But, perhaps this could be a lesson for how to protect products in future?