PRODUCT COUNTERFEITING CRIME

Using open-source information, the Product Counterfeiting Database (PCD) was built upon established tenets of problem-oriented policing, routine activities theory, and situational crime prevention. The PCD serves as a foundation for developing evidence-based lessons on preventing, detecting, investigating, and responding to product counterfeiting. The PCD assesses multiple units of analysis associated with each product-counterfeiting crime linked to the pharmaceutical, electronic, and food industries. For each counterfeiting crime, the PCD provides data on the scheme, individual offender, business offender, consumer victim, and trademark-owner victim. The PCD was developed in three related stages that are described: 1) identifying cases, 2) searching cases, and 3) coding cases. The PCD’s development and this preliminary assessment provide the foundation for additional research. There are several limitations to the PCD, however, due to information being limited to what is freely and publicly available; consequently, there is an inherent “dark figure“ of product counterfeiting crimes that cannot be captured and analyzed. This means that highly publicized cases are more likely to be represented in the PCD, as are federal cases. Most state cases could be found only by reviewing the court and correctional records of individual offenders. This requires data-collection strategies and efforts outside the scope of the current study. Thus, this project provides a major contribution by taking a critical first step toward the development of an empirical foundation and evidence-driven baseline of product counterfeiting schemes, offenders, and victims in the United States.

Terrorists use a wide variety of methods to fund their operations, obtain profits and carry out ideologically driven goals. Terrorist organisations have increasingly been linked to product counterfeiting crimes, but evidence for this connection is mostly anecdotal and speculative, lacking systematic empirical evaluation. This study mines open-source data to capture known product counterfeiting schemes linked to known extremists in the United States since 1990 and provides an overview of both the schemes and the individual suspects involved in these crimes. We uncovered ten product counterfeiting schemes linked to terrorism, while the vast majority of suspects involved are non-extremist collaborators motivated by profit, not extremist ideology. These findings indicate the need for policies focusing on criminal networks broadly, expanding beyond restrictive efforts only targeting terrorists.

Research on small businesses facilitating illicit markets and the efforts of nonfederal law enforcement agencies to identify these small business offenders has been scant. This exploratory study examines the illicit market for counterfeit products sold through small businesses in the State of Michigan. We used police incident reports of counterfeit products identified during administrative tobacco inspections of small businesses to provide a unique look at this crime problem and the efforts of law enforcement to curtail it. We analyzed the content of these incident reports to explore characteristics of the incidents, businesses and suspects selling counterfeit products, how the counterfeit products were identified and verified, and the origin of the counterfeits. Implications for law enforcement efforts to address counterfeit criminal enterprises and directions for future research are discussed.

Counterfeit parts in the U.S. Department of Defense (DOD) supply chain threaten national security by compromising critical military operations and placing the lives of military service members at risk. With the goal of illustrating the nature of the risk as it relates to types of counterfeit parts, how they entered the supply chain, and were identified and processed through the criminal justice system, we assemble and analyze open-source information on criminal schemes involving counterfeits in the DOD supply chain. We utilize the Product Counterfeiting Database (PCD) to capture every indicted scheme linked to the DOD and describe characteristics of the schemes, offenders, and victims. These data provide empirical insights into the counterfeiting of parts and equipment in the DOD supply chain. We conclude with an overview of key issues to consider when weighing opportunities for product counterfeiting as well as implications for policy and practice.

Product counterfeiting crimes have detrimental effects on consumers, brand owners, public health, the economy, and even national security. Over time, as product counterfeiting crimes and the response to them have evolved, U.S. federal legislation has developed and state legislation has followed suit, but with considerable variation across the states. The purpose of this article is to place product counterfeiting in the context of intellectual property rights, provide a historical review of relevant federal legislation, and systematically examine the extent to which state laws differ in terms of characteristics, remedies, and penalties. Additionally, we calculate indices of civil and criminal protections that illustrate the overall strength of each state’s legislative framework. Collectively, this assessment provides a solid foundation for understanding the development of product counterfeiting legislation and serves as a basis for advancing research, policy, and practice.

This legal analysis of the state-level trademark counterfeiting criminal enforcement framework in the United States (“U.S.”) scrutinizes the use and non-use of state statutes to prosecute and convict trademark counterfeiters. Relying on state-level appellate court cases and conviction data, we found: (1) states inconsistently use and interpret criminal anti-counterfeiting statutes across the U.S.; and (2) strategies for building evidence in trademark counterfeiting criminal cases are strongest when based on cooperation with the victim (trademark owner). Based on our findings, to improve state-level anti-counterfeiting efforts, we recommend several best practices:

• Adoption of specific criminal trademark counterfeiting statutes if states do not already have a statute; Continued involvement and testimony by brand owners to distinguish between counterfeit and genuine product;
• Continued and expanded collaboration and educational efforts between law enforcement, prosecutors, private investigators, and brand owners regarding trademark counterfeiting, as well as the potential danger to the health
• and safety of the public and possible connections to organized crime and terrorism.

Although there is a large body of research examining how crime and criminal justice issues are presented in the news, there is no research examining the media construction of product counterfeiting and little research on financial crimes in the media. The current study fills this gap by comparing the representation of financial crimes and product counterfeiting in the news media. This study consists of a news media content analysis of the New York Times and the Wall Street Journal from 2000 to 2009. Data were analyzed to identify common patterns across three types of fraud: product counterfeiting, corporate fraud, and tax fraud. The results indicate differences across the three crime types in the types of sources and how these sources are used in the articles. The paper concludes with implications for better understanding how product counterfeiting and financial crimes are portrayed as a social problem.

Product counterfeiting has received increased attention due to its economic and public health impact. Media framing of product counterfeiting shapes how the public and policymakers understand the problem. While there is a large body of literature examining crime and the media generally, empirical studies have yet to focus on the media construction of product counterfeiting. This study presents the results of a content analysis using a random sample of newspaper articles referencing product counterfeiting in the New York Times and the Wall Street Journal from 2000 to 2009. Articles were coded for common patterns in sources of information. While the results indicate the presence of a wide variety of themes, product types, and industries, government and business sources are overrepresented among the sources cited, leading to some level of consistency in the presentation of the impact of and appropriate responses to product counterfeiting. Implications for understanding how the public and policymakers understand product counterfeiting are discussed.

Due to its considerable negative consequences, product counterfeiting is a global problem that is a growing concern for consumers, government entities, law enforcement, and businesses. Unfortunately, current assessments of the nature and extent of the problem are largely unreliable and based on methodologies with significant limitations. This article examines the current approaches to measuring product counterfeiting, complementing those with a review of methods used to examine other crimes. It concludes by discussing the applicability of both commonly used and novel research methodologies, as they might apply to the study of product counterfeiting.

Product counterfeiting represents a growing, global risk that poses many negative consequences for consumers, businesses, governments, national security, the economy, and society. Research suggests that the first step in formulating effective strategies to combat such crime is to understand what shapes the nature of the criminal opportunity. The chapter begins with a general overview of the scope of the illicit trade in counterfeit goods, including connections to transnational organized criminal enterprises and terrorist organizations. The consequences of product counterfeiting are then discussed, followed by the factors shaping opportunities for this crime, including global consumerism, cultural awareness, profit potential, technological advances, low-risk crime, supply chain complexity, and lack of awareness. The chapter concludes with a review of the need for further research to better understand the risk of and opportunity for product counterfeiting.

Considering the steady and rapid growth of product counterfeiting and the damage it causes to society, it is important for criminology and criminal justice scholars to assist criminal justice officials, industry practitioners, and law makers in understanding the product counterfeiting problem and developing strategies to combat it. However, for researchers to be effective in their advisory role they must first establish what is known about product counterfeiting. As a first step in this process, we investigated relevant published research through a content analysis of 47 articles discussing product counterfeiting published in criminal justice and criminology journals through 2014. We analyzed various characteristics about the articles themselves, their authors, the journals they appeared in, and the nature and extent of their focus on product counterfeiting. We conclude this study with an evaluation of the state of product counterfeiting research and recommendations for future research.

Product counterfeiting is an ongoing problem whose complexity makes it difficult to be assessed. Although many organizations have estimated its extent, their measurements often have methodological shortcomings. Brand owners are working with industry organizations to improve these measurements. In this study, we use interviews with brand owners in various industries to identify practices and challenges for measuring the extent of product counterfeiting.

Partnerships between brand owners, governments, academics, consumers, and other stakeholders are essential to tackling the pervasive and persistent global problem of product counterfeiting. This Backgrounder highlights the importance of these partnerships, the need for widespread recognition of the shared nature of problems, and the development of solutions across companies and industries.