LaRiviere, Grubman & Payne, LLP

Counterfeiting Corner: The Human Cost of Counterfeiting

By Edward J. Kelly

Most people who purchase fake Prada bags and knock–off Louis Vuitton luggage probably don’t associate their new wares with child labor or slaves chained to sewing machines, but that’s exactly what consumers are supporting when they buy these items.

There are slaves and children 11, 12, 13 years old, working in these sweatshop conditions. They are not treated as human beings. They are just cogs in a machine to be used up and thrown away.

In some cases the threat posed by counterfeiting manifests itself in horrific public health hazards (pharmaceuticals, foodstuffs, spirits, cosmetics, automotive parts, and other components where safety is at risk due to substandard counterfeits). In some cases, threats to national security have been investigated given suspicions that the proceeds of the trade in counterfeit goods fund organized crime. In all cases, there is a hidden, and often horrific, social cost in the form of the human labor exploited to manufacture and trade in fake goods.

The sheer volume of international trade makes it impossible for law enforcement officials to inspect, let alone seize, any significant percentage of the overall volume of trade in fakes. The syndicates and traffickers operate in networks. They appeal to the public sector for protection of their activities through corrupt bribery payments. They also employ the latest high tech gadgetry to facilitate trade. Languages, borders, laws, regulations, technology, logistics--none of these factors are seen as show-stoppers. Instead, the traffickers view such obstacles as opportunities, a means to add value, for by circumventing such obstacles quickly, the syndicates may gain a competitive advantage and charge higher prices.

Important new legislation has recently been introduced in the USA. Following the trend of tougher enforcement against labor violations around the globe, the Customs Facilitation and Trade Enforcement Reauthorization Act (S. 1631) contains language that would significantly expand the existing U.S. ban on the importation of products made with forced or child labor. This same bill contains vigorous provisions designed to stem the flow of goods which infringe intellectual property rights. The linkage between IPR infringement and human rights abuses in cases of slave and child labor is not a coincidence.

Consumers have an important role to play because they have the ability to vote with their dollars to support socially conscious and responsible companies. In the past, consumers and businesses only thought about the monetary amount of a good or service. In the new economy, they must add together the monetary, environmental and social costs when determining the real price of a product or service. Examples of this shift in consumer consciousness are apartheid, labor movements, dolphin safe tuna, and the green environmental movement. The real power and best weapon to halt child slavery and make social change is up to the individual consumer. The perpetrators and collaborators count on the apathy of bystanders to view their crimes as harmless activity. Their ability to continue the pernicious trade depends in large part on the silent complicity of the individual consumers who buy the knock offs. For more information see www.lgpatlaw.com; www.sisha.org, www.lasterglobal.com and/or www.millionkids.org

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