Fake Pesticides and Fertilizers

For farmers in poor countries, often their biggest outlay is for pesticides and fertilizers. A recent report from the Indonesian Anti-Counterfeiting Society (MIAP) and CropLife Indonesia found that up to around 20 percent of the 1,500 registered pesticide brands fell victim to counterfeiting last year. Not only do the cheaper fake pesticides and fertilizers not deliver the benefits expected - leading to failed harvests - but they can also actually lead the farmers to far greater financial losses, as their produce can contain excessive amounts of pesticide residue ... making them unsaleable.

No Laughing Matter

Fisher Price's Tickle-Me Elmo is an icon of the Christmas rush. Always in high demand - it frequently sells out. Now, shoppers have the opportunity to buy a fake instead. This news item shows just how brazen the counterfeiters are. They've changed the name from "Fisher Price" to "Handsome" and called it (rather unimaginatively) "the Laughing Toy"... but it's a clear knock-off. The BBB rather curiously explains that copying trademark and trade dress is not illegal unless the Trademark holder pursues it.

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.

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: elady.com)
- 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)

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: http://google.com/gwt/n?u=bluenile.com)

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?

Infringing, Moi?

We've occasionally shared photos of bad fakes on this blog. This French website has some great photos of appallingly shameless Trademark infringements.

Here's my latest favorite (unless of course Google is indeed branching out into fragrance):

Exploding Phones, worm-infested chocolates and Chisco

In the last week we've seen news on exploding fake Nokia batteries in India. According to The Indian Cellular Association more than 75% of the cell phone batteries sold in India are fakes. Even more disturbing was this news clip of Taiwanese brand chocolates that turned out to be counterfeits that had a filling of moth larvae. [warning: not for the squeamish]. Finally, a new term: Chisco - which refers to the ever-increasing appearance of counterfeit Cisco equipment from China. This article gives a convenient "how to spot a fake" guide.

Here are some images:

Is your food un-COOL?

With the continuing acrimony over contaminated or dangerous products coming from China, it's perhaps not surprising that Consumer Advocacy Groups are demanding more information for shoppers, such as country of origin labeling, or COOL. Not so fast. Industry players such as food processors, packers and grocery chains are resisting the requirement to provide this information - claiming that it would be 'onerous'.

An amazing 82% of U.S. shoppers want to know their food's country of origin, according to a survey released in March by the consumer advocacy group Food and Water Watch. And a Consumers Union survey in June found even stronger sentiment: 92% of respondents said imported-food labels should identify the country of origin.

This recent article in The Washington Post details the complex wrangling over several different bills, and the inconsistent application of COOL (e.g. fish vs. chicken vs. peanuts vs. produce).

Simultaneously, but independently, the Chinese authorities just announced a new mark, the CIQ mark, that will supposedly help consumers tell the difference between real and fake food.

The "CIQ" mark, which stands for China Inspection and Quarantine, guarantees that products have passed quality tests, according to a regulation unveiled by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

It's not yet clear to us what would prevent the counterfeiter simply copying this mark... watch this space!

Questionable Virginity


An article in this week's New Yorker magazine by Tom Mueller digs into the widespread problem of Italian olive oil adulteration - and downright counterfeiting. Lamp oil masquerades as 'extra-virgin', hazelnut oil as olive. As the number of food contamination and adulteration instances increases, this one is particularly interesting - as it has been going on for years ... thousands of years, in fact.

Amphorae from 211AD show evidence of extensive anti-fraud measures: each was painted with the exact weight of oil it contained, along with the name of the farm where the olives were pressed, the merchant who shipped the oil, and the official who verified this information before shipment.

So it seems that ePedigree and food traceability is not a new thing. In fact, it looks like the ancient Romans took more steps to prevent fraud that the Italians do today.

Putting the Brakes on Counterfeit Truck Brake Parts?


Among the world of fake products, probably one that grabs the imagination best is counterfeit brake parts on big rigs and school buses. Substandard fake parts are a serious problem for legitimate manufacturers - who also have to tackle 'will-fit' aftermarket parts that are not technically counterfeit, but are widely used.

A recent article in Fleet Equipment magazine discussed the challenges facing the manufacturers. The remedies proposed were focused heavily on tightening purchasing guidelines (to prevent knowingly purchasing cheap knock-offs) and legal remedies, such as patenting a part number. We believe that, given the counterfeiters ability to make convincing look-alikes, the manufacturers should take steps to enable customers to more easily spot fakes.

Counterfeit Drugs Claim a N.American victim

While counterfeit drugs have long suspected to be in the system, and causing problems from contamination or lack of efficacy, this is the first news report of a death in N. America definitively linked to purchases of counterfeit drugs online.

Specifically, the victim had

dangerously high levels of metals, including aluminum (15 µg/g), phosphorus, titanium, tin, strontium, arsenic and other metals in [her] liver.

Is there a sudden splurge of fake toothpaste ... ?

... or are we just more aware of them now?

Fake Sensodyne toothpaste contaminated with DEG was found in the UK today. Counterfeit Colgate toothpaste has shown up in 6 US states and Canada (the counterfeiters conveniently misspelled "SOUTH AFRLCA" so that it was easier to spot them) - forcing the company to put up a warning site.

There is even a shrill website dedicated to the crisis (www.faketoothpaste.com) - which helpfully warns its visitors:

"Please THROW AWAY ALL YOUR TOOTHEPASTES and re-buy some more TOOTHEPASTE, non-toxic, WE DON'T WANT TO DIE!!!"

Pity about the spelling.

Chances are, counterfeit toothpaste (along with many other CPGs) have long been sneaking into the gray supply chain through dollar stores, car boot sales, flea markets, and the internet. But now the public radar is up about 'contaminated' products ... and "toxic toothpaste" makes a heck of a headline.

Can you sell virtual counterfeits in Second Life?

This is definitely out of our domain - but too convoluted and fascinating to ignore: an avatar (an online representation of a real person) in Second Life is attempting to sue another avatar (but in real life) for counterfeiting an online virtual 'product'. (Read Wired's coverage). It's not at all clear what law may have been broken, if any, or even in which country the lawsuit would apply. One problem (of many) is that the defendant avatar, Volkov Catteneo, is, of course, not using his real name. And no-one knows his real name. We won't reveal the counterfeited virtual product ... but it sells for 46 real US dollars, apparently. Confused?

The World's Easiest Product to Counterfeit

Sometimes counterfeiters go to extraordinary lengths to make fake products - such as Cisco products or re-marking microprocessors. But sometimes they just literally turn on a tap. Fake water. With the growth of bottled water (a $15bn industry in the US) worldwide, it is an obvious target for fakers. Harvest some empty containers from the trash, get new closures, and ... bingo ... you're in the water business.

Indeed a recent survey found that 50% of the barreled water in China (similar to bottled water, but specifically for coolers) is counterfeit. Suffice it to say, there are no controls on water contaminants or bottling cleanliness.

US bottled water is far safer ... but it is surprisingly easy to buy 'tamper evident' closures that can be used to cap refilled bottles.

One solution is to put a security code on a tamper evident label across the closure - thereby detecting illegal recapping. One water company in the US already puts security codes on its 5 Gallon tamper evident closures.

"NOT Made in China" is the new differentiator

With all the panic breaking out about the deluge of counterfeit, contaminated, toxic, and otherwise unsavory products coming out of China, it was only a matter of time before some manufacturers took matters into their own hands ... and advertised their total lack of Chinese content. This may work for some, but globalization is here to stay - and manufacturers will need to sustainable ways to source safe goods and assure consumers of such. For those who have followed this blog, you'll know that this is not so much a sudden surge in fakes, but the scales falling from consumers eyes to the threat that has been there and building for several years.

Here's a roundup of recent news about fakes:

• The Semiconductor Industry Association (SIA) in conjunction with Semiconductor Equipment and Materials International (SEMI) have launched a standards task force to define the use of security codes to protect components and assemblies from counterfeiting, re-marking and repackaging. YottaMark is proud to be a part of that effort.
• No-one can accuse China of soft punishment for counterfeit drugs. The (ex) head of the FDA was executed this week for taking bribes that lead to counterfeit drugs reaching the market and leading to the deaths of at least 10 people. However, worldwide, the penalties for counterfeiters are widely considered to be too light to deter the crime.
  
• A fake Sanyo cell phone battery exploded in China - killing the phone's owner. Exploding cell phone batteries have been heard of before - but this is the first time it's been fatal.

Bogus Online Pharmacies Competing with ... other bogus online pharmacies

We received this spam email recently ... among the many for online pharmacies. What caught our attention (other than the poor grammar) was the the fact that it tries to use reverse psychology (and official sounding titles) to bait consumers.

US NATIONAL MEDICAL ASSOCIATION

Do you buy pharmaceuticals online? The US NMA was specifically established to protect the consumer. Our experts check every online shop for bogus medicines. The blacklist of unreliable or simply fraud shops is updated every week. We strongly recommend to visit our site before buying any medical products online.

The common ways of online cheating are:
- delivery of low quality or fraud products.
- an enormous delay (up to 2-3 months) in delivery of products.
- shops obtain all the credit cards numbers and other credit information and then simply send nothing.
- shops sell unlicensed products they know nothing or very little about.
- shops themselves don't have a license to sell the pharmaceuticals.

Please check our blacklist of unreliable and fraud shops before buying any medical products online!!! Protect your family and yourself.

Fakers' Favorite Drugs

In 2006, the most popular targets for counterfeiters were Pfizer's blockbuster drug Viagra (sildenafil citrate), Eli Lilly's Cialis (tadalafil) and Bayer's Levitra (vardenafil) - all products for the treatment of erectile dysfunction.

Preliminary laboratory analyses by the US FDA on various drugs purchased via the internet have found counterfeits of: Lipitor (atorvastatin calcium); Diovan (valsartan); Actonel (risedronate sodium); Nexium (esomeprazole magnesium); Hyzaar (losartan potassium-hydrochlorothiazide); Zetia (ezetimibe); Crestor (rosuvastatin calcium); Celebrex (celecoxib); Arimidex (anastrozole) and Propecia (finasteride).

Add to this internationally the widespread counterfeiting of many anti-malarial, AIDS retroviral, and anti-TB drugs.

Now even the raw materials are under attack. The Synthetic Organic Chemical Manufacturers Association (SOCMA) of the US and the European Fine Chemicals Group (EFCG) banded together to demand increased regulatory inspections of foreign facilities manufacturing active pharmaceutical ingredients (APIs).

"Made in China" ... but made of what?

There's been a recent explosion in news about fake products manufactured in China - some exported, and many sold domestically. Not flimsy golf clubs or shoddy Olympic 2008 T-Shirts, but potentially fatal fakes:

• Fake plasma used in hospitals that contained no protein
• Fake Toothpaste: Colgate-Palmolive said counterfeit "Colgate" toothpaste that may contain a toxic chemical had been found in discount stores in four U.S. states.
• Petfood that contained Chinese wheat gluten contaminated with melamine is responsible for more than 100 pet deaths amongst nearly 500 cases of kidney failure

When Good Food Goes Bad - redux

We blogged a while ago about the problem of food traceability, particularly for fresh produce that is 'field packed' (like berries, tomatoes). Today we launched HarvestMark - an easy way for anyone to trace produce.

Consumers Look for Safe Food Amidst Expanding Recalls

Ironically, on the same day, the recall of suspected contaminated beef expanded dramatically.