When you slip into a pair of jeans that you bought at The Gap, it probably never occurs to you that they might not really be Gap jeans. Neither does it occur to you when you swallow a cholesterol-lowering medicine that it might be a fake — or even dangerous. And if you’ve ever driven a Chevrolet, it has probably never crossed your mind that it might not be a real Chevy.
Yet all these things have been counterfeited — and much, much more besides. In fact, counterfeiting products, even life-saving prescription drugs, is a trillion-dollar global business. According to a recent cover story in Business Week, it is costing an estimated $512 billion in losses to global merchandise trade. And so far, there aren’t too many brilliant ideas about how to fight it — though trying is in itself a burgeoning industry.
Just a year and a half ago, Pfizer had to yank some 16.5 million doses of its cholesterol drug, Lipitor, off the shelves after they were discovered to be fake pills that at best could be worthless — and at worst could be dangerous.
Last October, Hewlett-Packard discovered a million dollars’ worth of bogus inkjet cartridges in a Brazilian warehouse. French customs seized more than 11,000 fake Nokia cell phone parts last June. Buick windshields, Kiwi shoe polish, Callaway golf clubs, Intel computer chips, Bosch power drills, and BP motor oil — have all been counterfeited.
Unilever sees fake versions of its shampoos, soaps, and teas growing at a rate of 30 percent annually. Fake pharmaceuticals are costing the industry $46 billion each year. Fake car parts are a $12 billion business. And in fact, the next step may be fake cars: General Motors has already sued a Chinese car maker for counterfeiting its Chevrolet Spark minicar, according to The Financial Times.
And that doesn’t even get into the billions and billions of dollars’ worth of counterfeiting going on in fashion, accessories, watches, music, software, and movies.
As a result, an arms race is on between the legitimate manufacturers, aided by customs officers and police, and the counterfeiters, often armed with the latest high-tech manufacturing equipment. Some companies are deploying hordes of detectives around the world to unmask fraudulent manufacturing operations. Others are resorting to high-tech strategies such as...
