If you can make it, they can fake it

The violation of intellectual property rights and the illegal copying of all kinds of goods from cigarettes to medicines really took off in the 1990s and has become an issue of major concern to companies and governments around the world.

Counterfeiting is worrying multinationals as it now makes up between 5 and 7% of all global merchandise trade, giving rise to $512 billion in lost trade annually. The World Health Organization says that about 10% of the world’s medicines are counterfeit.

Here are some examples of the kinds of fake goods that have been found in the marketplace. A woman in New York recently phoned her local drugstore to complain about the bitter taste from the cholesterol-lowering Lipitor pills that she was taking. On examination in a lab, the pills turned out to be counterfeits. Over the next two months, 16.5 million pills were withdrawn from warehouse and pharmacy shelves resulting in a huge loss to the company.

A tip-off¹ in Brazil led to the discovery of a large number of bogus Hewlett-Packard printer cartridges ready for the marketplace. Police also picked up information from the same source that led to the seizure of more than $1 million worth of other counterfeit goods.

In a Chinese warehouse, authorities came across a store of counterfeit Buick windshields ready for the export market. China also sells Honda fake parts for half the price of the original.

Secret service agents in Guam discovered bogus North Korean-made pharmaceuticals, cigarettes, and counterfeit $100 bills.

French Customs recently picked up more than 11,000 fake parts for Nokia cell phones, batteries, and phone covers.

And the list goes on and on. What can companies and governments do to control this violation? China is by far the greatest violator of property rights and two-thirds of the world’s fake goods are turned out there. However, the Chinese government, under pressure from international groups, is now beginning to clamp down on² illegal copying. As Chinese companies begin to experience violations of their copyrights from within China they are starting to demand more regulations. In addition, multinational companies are putting pressure on the governments of violating countries to make them control the counterfeiters. Goods are being electronically tagged and companies are sending detectives around the world to track down companies and countries involved in the production of fake goods.

¹ tip off – інформування, розм. наводка

² clamp down on – забороняти; стати суворішим, вимогливішим (до кого-небудь); вести боротьбу (проти кого-небудь)

b) Match the countries with the pirated goods

1. USA a. car windshields

2. Brazil b. pharmaceuticals, cigarettes, $100 bills

3. China c. parts for cell phones

4. Guam d. pills for controlling cholesterol

5. France e. printer cartridges

c) Answer these questions

1. Which country represents the biggest problem in terms of violations of property rights? 2. Why is the Chinese government now starting to clamp down more on illegal copying? 3. What are multinational companies doing to fight the problem of illegal counterfeiting?