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Knockoff Report™ #615

Top News

Trump Is Warned His Intellectual-Property Probe Risks a Trade War With China

Why Kicking Out Counterfeit Crooks on Instagram Is So Important

eBay Takes a Small Step Toward Fixing the Internet’s Huge Counterfeiting Problem

Fraudsters Supplied Counterfeit for Pacific Fleet’s Recon Ship

Amazon Sells Knockoff Mercedes-Benz Wheel Caps, Suit Says

Denver Broncos Warn of Counterfeit Tickets Being Bought Through Unofficial Vendors

Canon is Fighting the War on Ccounterfeit Goods

US News

LA City Attorney Sues Downtown Sellers of Counterfeit iPhone Accessories

CBP: $12 Million in Counterfeit Water Bottles Seized at Port of Charleston

Van Winkles, Buffalo Trace Help Take Down Bourbon Counterfeiter

Fake Tide Laundry Detergent in Local Stores Could be Dangerous

Taking Counterfeit Prescription Drugs Can Be Fatal, Portland Police Say

Counterfeit Goods: Franklin Police Donate UGG boots, North Face Jackets to Maria Victims

Costa Rican Man Pleads Guilty in Scheme to Sell Counterfeit Drugs in Pittsburgh

International

WATCH: While Signing Sneakers in Shanghai, Steph Curry Spots a Cheap Knockoff

Hundreds of Big Brand Counterfeit Goods Seized from Lincolnshire Market

Afghan Ministry Takes Step Against Counterfeit Medicine

Counterfeit Goods Worth £2m Seized and Possible Victims of Modern Slavery Rescued in Manchester Raids

Most Popular Counterfeit Brand in S. Korea Was Louis Vuitton

Azerbaijani Security Service Seizes Counterfeit Excise Stamps

Domestic Trade Ministry disposes RM2.5m worth of counterfeit, illegal goods seized in Selangor

Four Charged with Selling Fake Shoes in Greece

Video of the Week

A Nintendo Switch Knockoff That Can Play Basically All Retro Games

Fakes in Film: Orphan Black

Fakes-in-Film-Orphan-Black-300x300Anybody watch the Season 2 Premiere of this cool show?! Well, if you didn’t this post may be a bit of a spoiler, but not much.  For those of you who have not seen the show yet, here is a brief summary: Orphan Black is a Canadian science fiction television series starring Tatiana Maslany as several identical women who are revealed to be clones. The series focuses on Sarah Manning, a woman who assumes the identity of her clone, Elizabeth (Beth) Childs, after witnessing Beth’s suicide. The series raises issues about the moral and ethical implications of human cloning and its effect on issues of personal identity.

From an entertainment perspective my respect goes out to the lead actress, Tatiana Maslany, who plays multiple roles including a streetsmart grifter (Sarah), a manic suburban mom (Alison), a pot-smoking lesbian scientist (Cosima) and a feral Russian assassin (Helena) among others. For those of you who have not seen the show (yet), the main character is Sarah, who is partnered with Alison and Cosima, pooling their collective resources to figure out who made them and who is trying to kill them off.  Maslany’s award-worthy performances are often done playing opposite herself, whether in shootouts or comedic banter.  But the reason I’m writing about Orphan Black on Knockoff Report is the cloning issue. On the surface, cloning can be an interesting topic in the IP debate.

The thing that made me think hard about this wasn’t the epically cool first season.  It was this week’s Season 2 premiere that really brought out the IP geek in me.  The scientist, Cosima, is investigating the codes embedded in their DNA and cracks it. Turns out, embedded in her DNA, and the rest of her clone sisters is a patent notice. Her quote, “We’re property. They patented us.” was the topic of this episode which was entitled “Personal Property”. As interesting as this seems, this is still not why Rob Holmes, an anticounterfeiting expert and enthusiast, was drawn to write about this.  Here is the reason: I admit I do not know the outcome of the entire series and this is where speculation comes in. But, assuming one of the individuals is an original… are the patent owners actually counterfeiters? I say yes.  If I owned the patent for a duplication device, it would not give me rights over the items I copy.  Only rights overs the duplication process.  A patent is a grant of ownership over a specific process. Patents do not protect images, words or content.  This show is very good and I hope it goes on for many seasons.  If this is the case, we will not know some of those answers for years to come.  This means my actual argument may not even be valid until perhaps more seasons pass.  Is there an original?  Was the original created, or born?  But, as an IP geek, this is fun stuff and will keep us thinking for many years to come.

Now, I’m going to finish my coffee.

Fakes in Film: Dallas, Baby!

dallasIt’s an ironic thing that I’m located in the same town but, yes, I watch the TNT drama “Dallas” based on the 1980s phenomenon of the same name. To my defense, it’s located in my current city… but the soap opera aspects of the show are still quite appealing. Oil men, big business, politics, hot chicks… no problem putting in my time.

As y’all know the main character J.R. Ewing’s, his son John Ross Ewing, is caught between two (or more) women. One of the women, Elena Ramos (Jordana Brewster), is loyal to the Ewing family. Her brother Drew, on the other hand, is still trying to find his place in the world and to prove his worth to his sister. In addition to trying to prove his worth to his sister on the Ewing’s Southfork Ranch, he takes a job running goods across the Texas/Mexico border for Ewing rival Harris Ryland (Mitch Pileggi). A casualty of the rivalry, poor Drew gets caught transporting a truckload of counterfeit designer goods across the US/Mexican border.

Don’t blame the Ewings for this mess. Ryland was the mastermind of the counterfeiting operation from the beginning. But poor Drew is stuck in the middle. After the counterfeit goods incident, Ryland uses misguided Drew to pull off another operation against his own better judgment. But, sadly, there were casualties. If you’re up to date on the show may you know that Drew comes out from hiding this week.

No matter your angle on the show itself (I, personally, side with John Ross), the counterfeit goods arrest will certainly bite Drew, but not as badly as the demolitions operation that killed Christopher’s twins. If you’re not watching the show, IP interest aside, you’re missing out on some good old fashioned soap opera fun. Tune in baby!

Fakes in Film: American Gangster

american_gangster_posterWelcome to ‘Fakes in Film’, the first in a new series of articles featuring counterfeit goods and trademark infringement featured in movies and television.  More and more, this topic is being included in pop culture and we want to be there to show it to you.  Some references will be old/retro and some will be completely new.  So here goes…

One of my favorite crime films of the last decade is Ridley Scott’s epic “American Gangster” starring Denzel Washington and Russell Crowe. The film chronicles the rise and fall of real-life drug kingpin Frank Lucas (Washington) who is pursued by the flawed hero Richie Roberts (Crowe).

As a businessman I quickly connected with Lucas’ recognition of eliminating the middleman to connect directly with the supplier. He immediately doubled his profits after this step and gained respect from his peers by how he eliminated said middleman.  As a crime-fighter I related to Roberts’ pure motives and focus on the prize.  He wanted to stop Lucas’ criminal activities at all cost.  He did.

What does this film have to do with trademark infringement?  Of all films in recent years this sticks out with me the most.  Frank Lucas (Washington) is enjoying the spoils of the success of his uncut heroine on the streets on 1970s New York City.  What many may not recall is that he created a brand for this drug called “Blue Magic”.  When a competitor began using his trademark to distribute substandard drugs, he quickly met with this individual and explained the situation to him as follows:

  • “Blue Magic is a brand name; as much a brand name as Pepsi. I own it. I stand behind it. I guarantee it and people know that even if they don’t know me any more than they know the chairman of General Foods.  What you’re doing, as far as I’m concerned, when you chop my dope down to five percent, is trademark infringement.”

This illustrates to me, more than the usual venues, how brand recognition is so important that it transcends even legal commerce.  Brands rule, baby.  They rule completely.  Even though many of us spend our time trying to stop criminals from infringing on our clients’ trademarks, they too care about their own brands.  Irony?  yes.  Another way to track them?  Yes also.

Now I’m going to finish my coffee.

Replica Handbags and Black Hat SEO

Google Gives Update on How It’s Combating PiracyAs I do in a normal day, I was patrolling the mean streets of the web looking for websites selling fakes.  On this particular day, one site came to my attention.  How does a church website with no e-commerce component show up as a top search engine result for replica handbags?  When I examined the website’s source code, I observed that there was a javascript injection placing links into their website unbeknownst to them.

Below is an example of what I observed:

     
     elementId = Math.floor(Math.random() * 10001);
     document.writeln('
‘); document.getElementById(‘block’ + elementId) .style.display=’none’; <a href=”http://xxxxxx.com/db-gestion/pmd/styles/default/images/ icons/brandname/brand-name-products.php”>brand name products</a>

Search engines rank websites based on inbound links from legitimate websites.  A javascript injection like this created invisible links to the bad guys’ website the search engines can see but the viewer cannot.  The way this is done is by finding an open doorway into a legitimate website that does not have the latest security updates.  This is an example of a black hat technique that helps increase search engine results for their illegal site.  The lesson to be learned (besides keeping your software updated) is that there are many hidden efforts behind marketing contraband products and, in turn, many clues left behind if you know where to find them.

Now I’m going to finish my coffee.

Branch Offices for Counterfeit Luxury Goods

During one of my strolls through the dark alleys of the web I came across another interesting black hat search engine optimization technique: branch offices for counterfeit luxury goods installed within legitimate sites.  At first observation, the website I saw selling counterfeits looked like any other.  But, after a closer look, the URL appeared to be much longer than the typical domain-based URL like fakestuffseller.com.  Instead it looked like this: http://legitimatesite.com/includes/ice/ _vti_cnf/lib/ brand/boots/brand-boots.php.  I noticed an extra directory ‘/includes/‘ that looked out of place and perhaps would not be in the normal structure of this particular legitimate website.  My next step was to test my theory and delete the extra crap (/includes/ice/ _vti_cnf/lib/brand/boots/brand-boots.php) from the URL, leaving it to be simply legitimatesite.com.  As I has suspected this led me to a perfectly legitimate university website.

The two questions you are asking right now are “how?” and “why?”.  Allow me to enlighten you.  The “how” is similar to what I explained in another recent article I wrote regarding black hat search engine optimization techniques where hackers find weaknesses (like unlocked doors) in websites whose security software is not up to date.  Once that vulnerability is detected, the hacker can install thousands of his own websites within your website without your knowledge and, perhaps, for years before you even notice anything is strange.  The reason they do it is so that they can create tens of thousands of websites selling counterfeits.  Since this is done on a mass scale, the criminal is only minimally affected when your lawyer takes down poor old legitimatesite.com.  He has an unlimited supply.  Now I’m going to finish my coffee.

Brand Protection and Social Media

In the era of telecommuting and coffee shop branch offices, Facebook has replaced the watercooler, LinkedIn is the new resume and Skype is the new boardroom. Let’s face it. Your online ‘brand’ has become your most public persona. Along with the vast benefits that social media bring a new world has opened up for fraud, misinformation and brand abuse. Holmes is not only a top brand protection investigator. He is also the one-man marketing department for his firm. Combining his two passions of trademark investigations and social media, he will take you on his journey from creating his first blog, designing his firm’s website, and planning a social media strategy and then arm you with brand protection tactics that he employs for his clients.  Rob gave this talk, entitled Brand Protection and Social Media in June 2012 in Dallas, Texas.

Even Some Prisoners are Chinese Knockoffs

Throughout the years in the anti-counterfeiting business there have been a few times where we, and our clients, have lauded our victories when a raid was accomplished on a factory making Chinese knockoffs.  Once, I remember, back in 2006 our client’s attorney actually saw thirteen people in handcuffs.  Chinese nationals, in China.  In cuffs for making fakes.  Not bad for a case that started with some handbags sold by a Purse Queen in Missouri!  Every time I tell that story, I finish it with the punchline that “I’m sure the cuffs came right off when my client boarded the plane.”  I’m not faulting China and that really isn’t my point here.  But the disconnect between cultures is.  There is obviously a totally different meaning of ‘authenticity’ when you cross oceans.  You may recall the incident during the opening ceremony of the 2008 Beijing Summer Olympic Games when the seven year-old vocalist who was commissioned to sing ‘Ode to the Motherland’ was replaced by a prettier lip synching faker.  A recent Slate article reports on a whole new kind of counterfeiting: fake prisoners.  No kidding, guys.  People who are facing jail time in China can hire a less-fortunate guy to confess, or just replace him in the can.  This brings me to a whole new thought on the counterfeit enforcement business.  While diplomacy with China is important in the fight against counterfeit goods, raiding their factories and jailing their owners is probably not effective.

The  most important facet of my solution is to curtail the demand in the United States and other countries with a massive consumer base.  The way to do that is to enforce against all sellers of this product in those countries.  Contrary to the spirit voice in Field of Dreams, wise businessmen will tell you that supply does not dictate demand.  Stop promising your client you’re gonna get the “big factory” and focus on stopping the mid-level distributors here.  I promise your performance numbers will increase and, most important, you will help restore value and dignity to the client’s brand.  I know from great experience that many people who became huge sellers of counterfeit goods here in the United States would have stopped if they had just worn a pair of handcuffs early on.  One night in jail works wonders on the soul.  Enforcing the smaller crimes is part of the plan that makes many of our inner cities safer.  Curtailing vandalism in your neighborhood leads to less violence down the line.  In tough economic times it is easy to cut costs and focus on the biggest problems.  The problem with the latter is that no big problem started that way.  My suggestion to my readers is to simply place most of your efforts on the cities and countries with the highest retail sales of genuine product.  I’m not talking about the people selling fakes at swap meets or in the bad neighborhoods.  I’m speaking of the mid-level distributors who are getting their product directly from China and supplying those folks.

Now I’m going to finish my coffee.

Why Seizing Domains is Reaping Failure

The bad guys don’t care.  Just like popping a wheelie on your bike, it’s a neat trick but it only works for a few seconds.  Please understand that we are investigating criminals, not websites.  The person on your staff that tells you they are investigating websites should be fired for incompetence.  That is like a homicide investigator saying he investigates piano wire.  He clearly doesn’t understand the difference between a perpetrator and a tool.

In 2008, I innovated a way to help my clients join multiple websites into one case.  Basically I proved that they were all tools used by the same individual and/or crime gang.  Some clients took my advice and allowed me to use this data to assist law enforcement and put these thugs away.  One of these investigations led to the arrest of  the “King of Spam” Oleg Nikolaenko.  The Intellectual Property Rights community at-large exploited this new innovation for their short term gain by seizing domains by the hundreds (and sometimes thousands).  Not one of these lawsuits with fake million-dollar judgments have yielded in an arrest.

The reason we are fighting the good fight is to stop people from doing bad things and hold them accountable for their actions.  Whether you are enforcing trademark rights or car thefts, this has to be done one person at a time.  In 2010 a client asked me what we could take away from the offenders to make them stop.  My simple answer was “Their freedom.”  Entrepreneurs will always find a way to do business.  Bad guys need to be put away to reflect on their actions.  Nothing else will stop them.  When you take away only the tool, you are training the criminal to improve.  I am not in the business of training crooks.  Are you?

My next series of articles will focus on the components of an Internet crime ring and how they continue to elude.  Please stay tuned as I astonish you with techniques that have never been revealed to an enforcement community.

Now I’m going to finish my coffee.

BOOK REVIEW: Black Market Billions

rob-holmes-and-hitha-prabhakar1

Rob Holmes and Best-selling author Hitha Prabhakar

As I do the last few days of every April I was preparing for the International AntiCounterfeiting Coalition Spring Meeting.  Per my normal routine, I downloaded the agenda and devised a conference plan.  I noted that this year, unlike last, the conference had a host: Hitha Prabhakar, author of the new best seller Black Market Billions: How Organized Retail Crime Funds Global Terrorists.  In preparation of the possibility of carrying on a conversation with her, I decided to extend her the courtesy of purchasing the book on my favorite book site, audible.com.  Don’t laugh.  Come on.  You didn’t expect a narcissistic guy this hopped up on Starbucks to be able to sit down and actually read a book in three days, did you?  Besides, I love listening to non-fiction books.

Black Market Billions began with the author receiving an instant message from a friend offering her handbags for sale at a very attractive price.  Knowing that she is a full-time fashion reporter, the friend explained that the items he was selling ‘fell off the truck’.  What followed was a rabbit hole I was not expecting.  Most books that involve the world of counterfeit goods focus on the counterfeit goods industry (makes sense, doesn’t it?), but not this one.  In order to set the table properly to explain the role that counterfeit goods play in our society, Prabhakar first takes us deep into the varied world of shoplifting, human trafficking and Organized Retail Crime.

Knockoff Report - BOOK REVIEW Black Market Billions

Most of my readers know I grew up in the anti-counterfeiting industry so one may assume I was schooled in all of the ways counterfeit goods are tied to the dark parts of the world’s economy.  One would be wrong.  I knew all about cargo theft, human trafficking, parallel imports and (of course) product counterfeiting and cybercrime.  Although I knew that retail boosting existed, I didn’t know how organized it was and that it is directly tied to the same black market.  I know we can watch an episode of reality television to learn something new, but Black Market Billions added a new view to even this easily jaded joker.  Early on, she moves right to the ties between counterfeit goods and radical terrorists.  Some of these stories were cases I had worked on, so it hit home as closely as it was well-written.

Moving through the chapters, I first was trying to figure out where she was going because the structure was not organized like most books, where there would be claim, evidence, conclusion, rinse, repeat.  She told stories of individuals through their eyes and provided case studies with insight into their effect on these individuals.  As the book unfolded I felt myself engrossed in a story that I thought I knew but saw it in a different light.  Perhaps this insight was partially due to the fact that it was written by a woman.  The stories felt personal and the street crime was real as it was woven into the larger picture of Big Fashion.

I recommend this book, not only for those interested in anti-counterfeiting, but anyone who reads true crime or even thrillers.  Keep an eye on this author as well.  To top it all off, I did end up chatting with her at a party, so my reading it in time was worth it!

Now I’m going to finish my coffee.

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