Tuesday, May 02, 2006

Counterfeiters' Learning Curve Is Peaking: NEC versus 'NEC'

David Lague wrote The Next Step in Pirating: Faking a Brand for the International Herald Tribune. It's a fascinating account of a well organised hijack of a whole company, NEC in this case. The learning curve of counterfeit producers is peaking to new hights. A company's worst night mare.

"... the pirates copied NEC products, and went as far as developing their own range of consumer electronic products - everything from home entertainment centers to MP3 players. They also coordinated manufacturing and distribution, collecting all the proceeds."

Only after two years and thousands of hours investigation in conjunction with the law enforcement authorities of China, Taiwan and Japan the scheme was discovered.

"Evidence seized in raids on 18 factories and warehouses in China and Taiwan over the past year showed that the counterfeiters had set up what amounted to a parallel NEC brand with links to a network of more than 50 electronics factories in China, Hong Kong and Taiwan."

Because the counterfeiters' approach to profit from the brand by using a parallel company was so well organised, they even carried NEC business cards, it's not so wonder that many a factory owner was duped into beliefing he was producing legitimately for NEC.

Read Lague's article here.

About Shadow companies that register in Hong Kong a name of an already known company to exploit that name in China in bad faith and the rigid interpretation of the companies ordinance that makes it possible, read here.

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