ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Wednesday, December 20, 1995 TAG: 9512200034
SECTION: BUSINESS PAGE: C-8 EDITION: METRO
COLUMN: MARKETPLACE
SOURCE: MEGAN SCHNABEL
When you hear the word "counterfeit," what comes to mind?
Five-dollar Rolex watches sold on New York street corners? Knock-off Calvin Klein jeans at flea markets?
The idea that product counterfeiting is something of a joke - Joe American buying a cheap watch he knows is a fake from a shady character he knows is a con man - is a misconception, says Rep. Bob Goodlatte, R-Roanoke.
Goodlatte, a member of the Courts and Intellectual Property Subcommittee of the House Judiciary Committee, has introduced a bill that would make it easier for the government to crack down on merchandise counterfeiters who sell everything from toys to helicopter parts.
According to Goodlatte and the International AntiCounterfeiting Coalition, U.S. industries lose more than $200 billion every year to sales of counterfeit goods, up from $61 billion in 1988. And the U.S. Customs Service estimates that 750,000 jobs have been lost as a result of foreign counterfeiting of U.S. products.
Proponents of the new legislation say the existing counterfeiting law, enacted in 1984, just doesn't go far enough.
"The laws that are available are a bit vague," said George Abbott, director of communications for the anti-counterfeiting group, a Washington, D.C.-based trade association. Counterfeiters - often members of organized-crime rings - know they can get away with selling fakes and may use the profits to finance other criminal activities, he said.
And thanks to the ready availability of high-quality printers and publishing software, counterfeiting has become more sophisticated than ever before, Goodlatte said.
"That's where they fool the customer - making the logo and the box look just like the original."
The pending legislation (H.R. 2511) would, among other things:
nExpand the power of law enforcement to seize both counterfeit goods and the raw materials and tools used to produce them.
nMake it a crime to traffic in computer software labels and packaging.
nStop re-exportation of pirated merchandise.
nEnsure that counterfeit products are destroyed, unless the trademark owner agrees to some other remedy.
nRequire U.S. Customs to seek more detailed information about trademarks from importers.
Counterfeiting is especially prevalent in the computer and clothing industries, where knock-off products can cost manufacturers millions in revenues. But it isn't just about big business's bottom line, Goodlatte said. He cited examples:
nCounterfeit shampoo was found to contain bacteria that could cause infection in users with weakened immune systems.
nCounterfeit infant formula containing ingredients that could cause allergic reactions in babies was found on store shelves in 16 states.
nCounterfeit toy action figures contained small parts that could be swallowed by children.
In testimony to the subcommittee, anti-counterfeiting coalition President John Bliss reported that 219 cases against makers of counterfeit airplane parts were referred to grand juries in 1992. And more than 600 helicopters sold during the 1980s to NATO and private businesses were found by federal investigators to contain counterfeit parts. One of these helicopters crashed in 1987, killing a traffic reporter.
"One thing is certain," Abbott said. "These counterfeiters are unscrupulous."
Goodlatte, who became interested in the problem of counterfeiting through his work with the subcommittee and through conversations with business representatives, said he's pleased by the bipartisan support the bill has received. The legislation, co-sponsored by Democrat John Conyers of Michigan, has cleared the subcommittee and will be presented to the full Judiciary Committee in January.
Companion legislation was introduced in the Senate Judiciary Committee by Sen. Orrin Hatch, R-Utah. It has cleared the committee and awaits a decision by the full Senate.
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