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Pirates of Globalization Case Study 6

The document discusses the global issue of counterfeit products. It notes that brand and trademark counterfeiting amounts to $500 billion annually. Traditionally sold by street vendors, counterfeits are now distributed using the internet. Legitimate websites like eBay struggle to prevent the sale of fake goods. The automotive industry loses $12 billion per year to counterfeit parts that can be dangerous. China and India have weak intellectual property laws and enforcement, allowing widespread piracy that harms international companies.

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RAY NICOLE MALINGI
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631 views3 pages

Pirates of Globalization Case Study 6

The document discusses the global issue of counterfeit products. It notes that brand and trademark counterfeiting amounts to $500 billion annually. Traditionally sold by street vendors, counterfeits are now distributed using the internet. Legitimate websites like eBay struggle to prevent the sale of fake goods. The automotive industry loses $12 billion per year to counterfeit parts that can be dangerous. China and India have weak intellectual property laws and enforcement, allowing widespread piracy that harms international companies.

Uploaded by

RAY NICOLE MALINGI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Pirates of Globalization

____________________________________________________
It pays to remember that old Latin phrase, caveat emptor (let the buyer
beware), when tackling the production of counterfeit products on global scale.
Sophisticated pirates routinely violate patents, trademarks, and copyrights to
charm our high- quality fakes of the best known brands. Brands and trademark
counterfeiting amounts of between 5 to 7 percent of world trade or around $ 500
billion a year! Phony products appear in many industries, including computer
software, films, books, music CDs and pharmaceutical drugs. Fake computer chips,
alone up to $100 billion annually. And the amount of counterfeit medicines
making their way into Europe is constantly growing.
Traditionally, peddled by sidewalk vendors and in back street markets,
counterfeits now empty latest technology. Just as honest businesses do they are
using the internet to slash the cost of distributing their fake goods. All
merchandise on some Internet sites is counterfeit, and even legitimate web site
operators, such as eBay ( www.eBay.com) have difficulty rooting out pirates.
New York retailer Tiffany & Company( www.tiffany.com) recently sued eBay
because counterfeit of its products appeared on eBay’s web site. In the
complaint, Tiffany said that, of the 86 jewelry pieces bearing the Tiffany name it
randomly purchased on eBay,73 were phony. Tiffany argues that because of eBay
profits significantly from the sales, and promotes it the company should bear
responsibility for the sale of counterfeit merchandise on it site. Others degree
saying it is impractical to require online auctioneers to verify the authenticity sold
on its sites. They compare to ordering newspapers to verify the authenticity of
everything sold through their classified ads section.
Pirates have not ignored the market of automotive parts, which loses
around $12 billion annually to phony goods. Counterfeiters are making fake
batteries, windshields, brakes, fluids, filters and spark plugs. The problem is
causing fears of lawsuits because of malfunctioning counterfeits and concerns of
lost revenue of producers of the genuine articles. For example, if someone is in an
accident because of a counterfeit products legitimate manufacturers need to
improve the product is not their own. Car manufacturers list potentially harmful
fakes such as brakes linings made compressed sawdust and transmission fluid
that is nothing more than cheap oil with added dye. Boxes bearing legitimately
looking labels make it difficult for consumers not to tell the different between the
fake and the real deal. more fake products are recently coming into North
America, but the larger market consumption remains the Middle East.
China, India, South Korea, Malaysia, Taiwan and Thailand are leading source
of counterfeit products. Lax anti-piracy regulations and booming economies in
China and India mean potential intellectual-property traps await companies doing
business in these emerging markets. For example, Indian law gives international
pharmaceutical firms five- to seven-years patents on processes use to
manufacture drugs-but not on the drugs themselves. This lets Indian companies
modify the patented production processes of international pharmaceutical
companies to create only slightly different drugs.
In china, political protection for pirates of intellectual property remains
fairly common. Government officials, people working for the government, and
even the people’s liberation army (China’s national army) operate factories that
churn out pirated goods; other operate on government owned land. Criminals are
often connected to political leaders and receive legal protection from
prosecution. An international company has difficulty fighting piracy in china
because filing a lawsuit can severely damage its business relations there.
Yet international opinion is divided on the root causes of rampant
intellectual property violations in china. Some argue that Chinese legislation is
vaguely worded and difficult to enforce. Others say that china’s intellectual
property laws and regulations are fine, but poor enforcement is to blame for high
rates of piracy. Amazingly, China’s regulatory body sometimes allows a
counterfeiter to remove an infringing trademark and still sell the substandard
good. Technology companies said to have been harmed by China’s weak
intellectual property laws include Microsoft (www. Microsoft.com), which claims
that its software is widely pirated, and Cisco Systems (www.cisco.com), which
sued a Chinese hardware maker for allegedly copying and using Cisco networking
software.
Thinking Globally
1. What actions can companies and governments take to ensure that products
cannot be easily pirated? Be specific

2. Do you think that the international business community is being too lax
about the abuse of intellectual property rights? Are international
companies simply afraid to speak out for fear of jeopardizing access to
attractive markets?

3. Increased digital communication may pose a threat to intellectual property


because technology allows people to create perfect clones of original
works. How do you think the Internet is affecting intellectual property
laws?

4. Locate information on the Tiffany vs. eBay lawsuit mentioned in the case.
Identify the arguments of the plaintiff and the defendant and who
prevailed. What are the implications of that lawsuit for the sale of
counterfeits in online auctions?

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