Countering the counterfeiters

Criminals are finding new ways to import counterfeit toys into the U.S., Customs officials say....
May 1, 1998

Criminals are finding new ways to import counterfeit toys into the U.S., Customs officials say.

Back in the late 1980s, when counterfeiting of merchandise began to register on the radar screens of law enforcement, it was not uncommon for Customs officers to find, for example, container loads of Cabbage Patch Kids knockoffs, says Deborah Bennet, a supervisory intelligence research specialist at the U.S Customs branch office in New York City.

‘If we had a reason to look at the container load, we would seize it and say, `Look at this, we have US$100,000 worth of dolls.’ That kind of occurrence doesn’t happen anymore, though, adds Bennet, mainly because counterfeiters have discovered subtler means of getting their bogus merchandise into the country.

One of those methods involves importing components of toys separately-in itself, not an illegal act-and then assembling them stateside with the remaining parts. For example, counterfeiters might send part of a toy that resembles Winnie the Pooh, but without a tag or label stating what it is. They would then print the labels for the toy domestically, or have them shipped as a separate package.

‘You can bring in a million different labels in one little package, and if we seize it, we’re seizing only US$10 worth of merchandise, when, the reality is, we’ve seized labels that represented US$10million. That doesn’t reflect well on our statistics.’ (Many of the toys Customs impounds fall within a gray area of the law, says Bennet. Those are toys that resemble a popular toy and, therefore, may infringe on a copyright. In such cases, ‘that becomes a legal matter that has to be fought out in court as opposed to a cut-and-dried enforcement issue for us.’)

Another technique counterfeiters employ is to change the name of the company they’re importing under, a method that can easily foil Customs’ efforts in determining the real parties involved in a transaction, says Bennet.

U.S. Customs does maintain a national database containing information on the goods that companies are importing and the names of the violators, which officers at every port have access to. Nonetheless, the sheer volume of products passing into the U.S. everyday makes it difficult to catch the people who are bringing in counterfeit toys, says Alise Wong, U.S. Customs national import specialist for dolls and toys. In addition to running a snitch line (1-800-ITS-FAKE), U.S. Customs holds info sessions at all the major trade shows, including Toy Fair and the Licensing Show, to raise awareness about counterfeiting and copyright infringement of toys. Ultimately, much of the responsibility to catch counterfeiters rests with the manufacturers, says Wong. Currently, toy manufacturers are required to register their intellectual property rights with Customs, and are encouraged to supply comprehensive information on the parties that have been approved to import their products, so as to better identify the criminal element.

But even with all of the safeguards in place, ‘I don’t think our toy companies are doing everything they should,’ says David E. Miller, president of the Toy Manufacturers of America. ‘Customs authorities are very willing to enforce the law, but owners of the copyright have to be willing to say, `Look, here are the infringements coming in, here is the port we think they are coming in to, and these are the guys we think are doing it.’

Most counterfeit toys are produced in the same place where legitimate toys are made, says Bennet. In 1997, Custom’s Media category, which includes computer games and electronic handheld games, ranked as the number one commodity seized, and was valued at roughly US$14 million; seizures for dolls and toys, however, dropped last year. Wong does not take comfort in the lower numbers, and attributes the decline in seizures of dolls and toys to the absence of a ‘really hot’ product on the market right now. ‘It’s hard to tell if you’re improving . . . especially in the world of toys. If a toy is very popular, your seizure rate is going to go way up, because lots of people are going to try and rip it off. [Conversely], if there is no particular hot toy, there’s really no temptation to make counterfeit copies.’

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