Plagiarism Awarding shameless counterfeits

Editor: Rosemarie Stahl

Many companies have to deal with cheap copies of their own inventive products. Aktion Plagiarius has found its own original way of fighting plagiarism: Each year, they award the best and most unscrupulous copies.

The form of the award, a gnome, was created to express the German aphorism "to earn oneself a golden nose" meaning to earn a lot of money.
The form of the award, a gnome, was created to express the German aphorism "to earn oneself a golden nose" meaning to earn a lot of money.
(Source: Aktion Plagiarius)

Since 1977 Aktion Plagiarius e.V. annually grants the negative award Plagiarius to those manufacturers and distributors whom the jury has found guilty of making or selling "the most flagrant" (design) imitations. Goal is to denounce the unscrupulous business practices of counterfeiters, who pilfer intellectual property and pass it off as their own creative achievement, Aktion Plagiarius says.They also want to shed light on and call attention to the injustice and the problems of enterprises affected by imitations. Since decades, Aktion Plagiarius contributes to a large extent to raising the public awareness and sensitising the industry, politicians and the consumers.

1. Prize: Retractable dog leash Flexi Explore L by Flexi-Bogdahn International, Germany (left). Forgery: Various anonymous online sellers, using fake identities and daily changing accounts on amazon.com (USA). The inferior quality (e.g. dysfunctioning retraction mechanism) already led to customer complaints and reputation damages in the US (right).
1. Prize: Retractable dog leash Flexi Explore L by Flexi-Bogdahn International, Germany (left). Forgery: Various anonymous online sellers, using fake identities and daily changing accounts on amazon.com (USA). The inferior quality (e.g. dysfunctioning retraction mechanism) already led to customer complaints and reputation damages in the US (right).
(Source: Aktion Plagiarius)

Globalisation, digital communication, the Internet and gullible (online) bargain-hunters are the major catalysts for the rampant spread of brand and product piracy. Yet, plagiarisms and counterfeits are neither compliment nor trivial offence. For counterfeiters, it is an extremely lucrative business model. However, the reputation damages for the brand name producers as well as the safety risks for consumers are immense. As long as there is demand for copied products, there will be adequate supply. A realistic information and sensitisation of the consumer world is crucial.

According to Aktion Plagiarius, the trophy of the black gnome with the golden nose is a symbol for the exorbitant earnings product pirates collect at the cost of innovative companies. This gnome was created to express the German aphorism "to earn oneself a golden nose" meaning to earn a lot of money.

2. Prize: Office chair Silver by Interstuhl Büromöbel, Germany (left). Plagiarism: Distribution by Shenzhen Chunshan Trading, China (right).
2. Prize: Office chair Silver by Interstuhl Büromöbel, Germany (left). Plagiarism: Distribution by Shenzhen Chunshan Trading, China (right).
(Source: Aktion Plagiarius)

Naturally, the Plagiarius award remains silent about whether a plagiarism is legal or otherwise. That decision depends on numerous factors, such as registered intellectual property rights for the original product or unfair competitive conduct of the imitator. Aktion Plagiarius does not, nor wants to, pass judgement. However, Aktion Plagiarius can call attention to the problems that affected businesses and consumers must face, and express the opinion, that clumsy 1:1 imitations are unimaginative and morally objectionable and lead to stagnation. Even legislature formulates the so called “principle of freedom to copy” as follows: (Technical) progress is only possible, when already existing inventions may serve as “a basis or inspiration for new products”. Thus, even freedom to copy does not legitimise almost identical products that could be confused with the original product. In this context, Aktion Plagiarius emphasises that legally competing products which follow a trend, but differ sufficiently in design and technology from the original product, do not have to fear a Plagiarius nomination, but in fact are explicitly appreciated, as they stimulate fair competition.

3. Prize - Pressure gauge by Wika Alexander Wiegand, Germany (left). Right Forgeries: Manufacture: Ma Anshan Exact Instrument, China; Distribution: Buu Ky, Vietnam - In 2015 the Economic Police confiscated Wika-counterfeits within the scope of a raid at Buu Ky. In 2016, within the scope of a 2. raid, the Vika-falsifications were found. Partially, the producer simply scraped off the first part of the “W”, partially he changed the “W” into a “V” (right).
3. Prize - Pressure gauge by Wika Alexander Wiegand, Germany (left). Right Forgeries: Manufacture: Ma Anshan Exact Instrument, China; Distribution: Buu Ky, Vietnam - In 2015 the Economic Police confiscated Wika-counterfeits within the scope of a raid at Buu Ky. In 2016, within the scope of a 2. raid, the Vika-falsifications were found. Partially, the producer simply scraped off the first part of the “W”, partially he changed the “W” into a “V” (right).
(Source: Aktion Plagiarius)

What was once a cottage industry, has in times of Internet and globalisation developed into a professionally operating counterfeiting business with a global network. The facets of product and brand piracy are quite diverse: they include brand name counterfeits, design plagiarism, technology theft and pirate copies. Meanwhile, all of these are available at diverse prices and quality levels, from cheap and dangerous knock-offs to high-quality imitations, that are hardly cheaper than the original product. No matter what category, cheap copies are not created inadvertently. The counterfeiters act rather deliberately, unscrupulously and driven by greed.

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They only copy marketready products for which there is already a demand and thus minimise their own entrepreneurial risk - and all too often also their entrepreneurial responsibility. The majority of counterfeiters still use inferior materials, deliberately omit quality- and safety controls and produce under degrading working conditions. Thus, they recklessly put factory workers’ and consumers’ health at risk. De facto the “business model counterfeit” is extremely lucrative while the risk of being prosecuted is very low. Accordingly, the offenders are comprised of unimaginative competitors, small-time up to organised criminals, and, recently verified: terrorist groups. The last mentioned used cigarette smuggling and trade of counterfeits to finance their terroristic activities. In regards to the world-wide distribution of illicit goods, they often used the existing infrastructure, for example: traffic in drugs, arms and human beings.

Product piracy today

The internet and digital communication are major factors for the immense increase of brand and product piracy. Although international police authorities close down tens of thousands of websites for trade of counterfeits annually, the supply of illegal fakes and design imitations is unabatedly high. Often, these vendors reappear in a minimum of time with new brand and domain names to continue their business. Clearly, the convenient 24-hour worldwide availability of large quantities of alleged brand products at bargain prices motivates consumers to purchase. The counterfeiters easily deceive and insidiously entice the online-shoppers with photos of the original products as well as fake customer ratings and fake quality seals. Also, gullible bargain hunters often follow recommendations made in social networks and quickly and uncritically click on “Purchase”, without thoroughly verifying the site notice, the payment terms, the cancellation policy and the general integrity of the provider. Yet, especially when buying on the Internet, common sense and a close inspection of the offer are essential. Experts from the consumer advice centres warn customers to conclude their purchase when the website contains all too many grammar and spelling mistakes or when e.g. “advance payment” is the only payment term offered. We know from the experience of cheated buyers that dubious vendors usually do not accept returns or provide refunds. The operators of Fake-Shops successfully veil themselves in the anonymity of the World Wide Web and sellers on huge online marketplaces often use fake identities and daily changing accounts. In order to protect consumers from fraudulent sellers, many brand owners provide lists of authorised retailers on their websites. Frighteningly, even leading marketplace operators (e.g. Amazon USA) do not make serious efforts to support brand name producers in their fight against illegal offers.

Cheap bargains and reputation loss

When it comes to buying fake products, consumers often apply double standards. Bearing in mind an alleged bargain, all scruples vanish into thin air and social standards in the counterfeiters’ factories do not seem to matter anymore. Generally, the evaluation of brand- and product piracy highly depends on the perspective. Entrepreneurs or consumers - as offenders they downplay the problem as a trivial offence, because they are beneficiaries of the circumstances. However, when being a victim of fraud and suffering financial losses or damages to health, the evaluation of the problem changes abruptly. In fact, original and plagiarised products are only misleadingly similar at first glance. Thus, consumers should not delude themselves into thinking that an identical product appearance automatically implies the same quality, functionality, precision and safety. As markets regulate themselves by supply and demand, each consumer bears considerable responsibility: Users who deliberately purchase counterfeit products, not only specifically undermine the brand name producers, they also support child labour and criminal business practices.

Often affected brand name producers suffer even more from unjustified reputation losses – generated by substandard forgeries - than from factual financial losses due to non-realised sales. It is a fact that disappointed customers are likely to turn away from a brand and may even influence other customers with their negative comments. However, product development is a time-consuming and costly process and each new product is the result of creativity and technical know-how. Therefore, it is essential for brand name producers that customers show more appreciation and respect for the product creator’s accomplishment in creating the original product. Innovative companies should enthuse consumers with the original product and convince them of the added value of their product in comparison with a visually identical but substandard plagiarism. Thus, brand name producers should not only invest in trademark protection but amplify their investments in consumer protection and sensitisation, in order to create higher awareness of the problem of counterfeits.

According to the European Commission, in 2015 European customs officials seized more than 40 million IP infringing goods, with an estimated value of 650 million EURO at the EU borders – an increase of 15% compared to 2014. The majority of products seized had their origin in China and Hong Kong. Others among the countries of origin include the United Arab Emirates, Turkey and India. However, EU customs statistics can only shed light on part of this global problem. It is a fact that many Asian companies develop from the extended workbench of Western enterprises and become serious competing firms that successfully operate on global markets, register IP rights, and also consistently prosecute infringers. Furthermore, companies from industrial nations are often those responsible for ordering or importing these imitations. Also, in recent years, there were more and more European companies among the nominees of the negative “Plagiarius” award – often the genuine producer and the imitator come from the same country. And increasingly, the imitators turn out to be former production or retailing partners. In fact, nowadays, the offenders select a competitor’s successful product and purposefully check whether the product is protected by IPR. And when no such protection exists, they blatantly copy the product. To best secure their product know-how and trade secrets against theft, entrepreneurs should focus on a holistic strategy that involves legal, organisational and technical measures.

The Jury of the Plagiarius 2017

  • Ulrike Adorf, Senior Clerk REACT Germany, Anti-Counterfeiting Network, Düren Germany
  • Martin Bendel, 1. Mayor of the City of Ulm, Germany
  • Carin Benter, Managing Director Daff, Düsseldorf, Germany
  • Ingrid Bichelmeir-Böhn, Head of Global Brand Protection, Schaeffler Technologies, Herzogenaurach, Germany
  • Cornelia Dollacker, Director Hessen Design, Darmstadt, Germany
  • Mario Hehle, Head of Scouting & Venturing / Technology & Innovation, Linde, Linde Gases Division, Pullach, Germany
  • Dr. Oliver Schön, Judge at the Land Court Munich, 7th Civil Chamber, Germany
  • Karin Strübing, Managing Director Karin Strübing Innenarchitektur, Ulm, Germany
  • Jan F. Timme, Senior Partner Black IP, Insheim, Germany
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