Asia and the Issue of Counterfeit Products
Discussion
I. Countries & Products
II. Reasons behind the issue
1) Profitability
2) Demand is strong
3) Penalties are low
4) Good way to launder money
III. Consequences of counterfeit products
1) Lost revenues
2) Tarnished company image
3) Societal Costs
(1) Child Labor
(2) Sweatshops
4) Consumer effects
(1) Fire
(2) Harm, death
5) Lost wages and jobs
6) Criminal Activity
(1) Terrorist funding
(2) Organized Crime
IV. Why is it so difficult to stop?
1) Little cooperation from Government
a. Chinese legal environment
(1) IP laws are very strong in China
(a) Condition to World Trade Organization admittance in 2001
(2) Legal Environment
(a) 200,000 judges to 140,000 lawyers
(b) Judges don't have law background
(c) Judges are selected locally, paid locally, promoted locally, and fired locally
(3) Corruption Paying for a decision is very common in Chinese courts.
b. Government
(1) Extensive use of counterfeit products and pirated software
(2) Economic dependency issues
2) Difficulty in identification
a. Legal question Is it counterfeit if it is produced in the same factory using the same materials according to the same specifications?
b. Progress of technology in the printing, scanning, and copying fields.
3) New Balance in China
Current Events
1) Time Warner DVD sales in China
2) Microsoft Windows Genuine Advantage
3) Enforcement in China: too weak to stop pirates
4) Indian Pharmaceutical, Aurobindo Pharma, grows via pirating strategy
Appendix A - Current Events
Time Warner DVD sales in China
Business Week Online, "Take That You Pirates", 9 October 2006, http://www.businessweek.com/magazine/content/06_41/b4004063.htm?chan=top news_top news index_global business
Hollywood studios claim that up to $2B is lost annually to pirated DVDs across Asia. In a new strategy, Time Warner has dropped DVD prices from $3 to $1.88, close to what pirated copies go for. This allows pirating, but makes pirated copies (ones typically from crude reproductions with no extras) less attractive. This is one of several attempts to combat pirating. The MPAA recently filed a suit against two local retailers and has won settlements in 10 similar suits over the past three years. In the first half of this year, the MPAA says an operation it calls Operation Red Card has resulted in 405 raids in China and seizures of 1.9 million pirated DVDs.
Microsoft Windows Genuine Advantage
Ina Fried, "Microsoft kick starts Windows piracy crackdown, But will freebies do the trick?", 26 July 2005, http://software.silicon.com/os/0,39024651,39150740,00.htm
Microsoft estimates that 1/3 of all copies of Windows are not legitimate. Windows Genuine Advantage (WGA) is a program that will ensure that all non-security related Windows XP add-ons will require validation. Microsoft will also begin offering goodie add-ons that will also require legitimate copies of Windows. So, Microsoft accepts that the product will be pirated, but will eventually become unstable, obsolete or simply undesirable, thus making pirated versions less attractive over the long run. If not carried out right (meaning, too many false positives), Microsoft runs the risk that this strategy could negatively impact their customer's user experience and possibly result in non-trivial operational expenses related to customer service issues.
... report also explains that illegal downloading of movies and TV have nearly halved “with 65 million film and 55 million TV shows illegally downloaded in 2012, compared to 125 million and 135 million respectively in 2008.”
The Wall Street Journal. Dow Jones & Company, 03 Jan. 2012. Web. 10 Feb. 2014.
New York Times, p. 1. http://www.nytimes.com/2009/09/09/business/economy/09leonhardt.html?_r=1 Lipman, Marc. A. A. Personal Interview. March 21, 2010. Marano, Hara E. (2004).
A Worldwide Problem Software piracy is defined as the illegal copying of software for commercial or personal gain. Software companies have tried many methods to prevent piracy, with varying degrees of success. Several agencies like the Software Publishers Association and the Business Software Alliance have been formed to combat both worldwide and domestic piracy. Software piracy is an unresolved, worldwide problem, costing millions of dollars in lost revenue. Software companies have used many different copy protection schemes. The most annoying form of copy protection is the use of a key disk. This type of copy protection requires the user to insert the original disk every time the program is run. It can be quite difficult to keep up with disks that are years old. The most common technique of copy protection requires the user to look up a word or phrase in the program's manual. This method is less annoying than other forms of copy protection, but it can be a nuisance having to locate the manual every time. Software pirates usually have no trouble "cracking" the program, which permanently removes the copy protection. After the invention of CD-ROM, which until lately was uncopyable, most software companies stopped placing copy protection in their programs. Instead, the companies are trying new methods of disc impression. 3M recently developed a new technology of disc impression which allows companies to imprint an image on the read side of a CD-ROM. This technology would not prevent pirates from copying the CD, but it would make a "bootleg" copy differ from the original and make the copy traceable by law enforcement officials (Estes 89). Sometimes, when a person uses a pirated program, there is a "virus" attached to the program. Viruses are self-replicating programs that, when activated, can damage a computer. These viruses are most commonly found on pirated computer games, placed there by some malignant computer programmer. In his January 1993 article, Chris O' Malley points out that if piracy was wiped out viruses would eventually disappear (O' Malley 60). There are ways that a thrifty consumer can save money on software without resorting to piracy. Computer companies often offer discounts on new software if a person has previously purchased an earlier version of the software. Competition between companies also drives prices low and keeps the number of pirated copies down (Morgan 45). People eventually tire or outgrow their software and decide to sell it.
In this paper, I will attempt to describe the piracy problem in China, discuss how the Chinese government is dealing with it, present the global effect, and finally arrive at what would be an ethical solution to piracy fitting for China's situation.
"4 Ways In Which Internet Piracy Can Be a Good Thing." MakeUseOf. N.p., n.d. Web. 02 Apr. 2014.
...nning pirated versions of Windows, whose owners tried to circumvent the (legal purchasing) system and reduce their costs. Other individuals and in emerging nations have purchased PCs with Windows “Starter” editions in which the cost of software is lower. The items mentioned here are ways Microsoft is trying to deal with the threat of Linux.
There is a saying: “Monkey see, Monkey do.” In today’s world, it seems that it’s only natural for humans to imitate what they see works in society. Though there are beneficial facets for imitating, there are also damaging consequences. Counterfeit is a strong word that describes companies that forge bills or create fake fashion goods, electronic items, and even pharmaceuticals. For the purpose of this research, the focus will be on the different aspects of counterfeiting goods in the fashion industry. Though fashion has continuously changed, been reinvented and some even being dubbed ‘classics’, one thing will always remain: a designer’s ability to express creativity. Fashion is mainly dictated by trends whether they are past, present, or future, making counterfeiting in the fashion industry is a very lucrative, multibillion industry. The current economic climate allows for luxury to be almost ludicrously unaffordable. With high demands for low cost items, the market thrives on consumers’ obsession with spending while saving at the same time. With the 21st century’s expectations and having the need to be worth something, it yields an unstoppable industry. This is especially prominent among women because they are predominantly image-based and willing to hunt for the perfect equilibrium between trend and price. The desire to appeal a certain way induces counterfeiting. Fashion savvy shoppers long for that moment when they can afford Christian Louboutin, Louis Vuitton, Hermes, and other rare or out of reach goods. The more unobtainable the product, the more desirable it is. It is not a surprise that many are willing to purchase the counterfeit than the authentic due to its resemblance and price. Counterfeiting affects the industry be...
[10] AFP, Microsoft Still in Talks with EU for Possible Compromise, 15 March 2004, <http://news.yahoo.com/news?tmpl=story&u=/afp/20040316/bs_afp/eu_us_it_software_040316204225>
Counterfeiting and piracy has affected the economy worldwide and is continuously growing at a steady pace. Counterfeiting can be defined as the manufacturing of any product with the intentions of closely resembling the appearance of another product to mislead consumers into thinking that they have the authentic creation. Examples of counterfeiting include trademark infringement, copying of packaging, copyright infringement, or copying any other significant features in another product. Piracy can be defined as the production and distribution of products and materials that are copyright protected while making such materials available on online networks without the authorization of the right owner which is required by law. There are
to use their money at a local Taco Bell. If teenagers are finding ways to
Becker, New York Times,October 2005, “Nordic Countries Come Out Near the Top in Two Business Surveys”
According to the book “Pirate’s Dilemma,” “Are Pirates have to scupper us? Are they a threat to be battled or innovators we should compete with and learn from?” (Matt Mason 4). Piracy has and will always be a threat to the whole media industry and of course the economy. As long as people can download for free or buy never been released movies in a cheaper price, there is no way media industries can compete with that.
Wall Street Journal 12 Feb 2009: p. A.13. SIRS Researcher. Web. 11 February 2010.