Destruction or Donation: Odd Journey of Confiscated Counterfeit Goods

by admin

When you develop a process to authenticate designer handbags, you’re bound to run across quite a few fakes. Our accumulated total could fill several storage units and if you add on the counterfeits discovered by all our partner stores, you’re talking about enough handbags to fill a warehouse and more. While that is quite a lot, it doesn’t touch the amount confiscated by law enforcement in a single year.

Imagine several dozen shipping containers, each the size of a tractor-trailer truck, each stuffed from front to back with counterfeit goods. We’re talking thousands of items which cannot be resold or returned to their country of origin. The only thing law enforcement can do is destroy them.

Prior to 2006, there were a number of legal statutes and trade treaties that gave law enforcement permission to destroy any products infringing on a brand’s IP. “Permission” meaning it was more of an accepted practice than an absolute.

In 2006, President George W. Bush signed into law the “Stop Counterfeiting in Manufactured Goods Act”, aka H.R. 32, which made the destruction of counterfeit goods mandatory. The reason for the sudden crackdown was an odd one.

A year earlier, relief workers raided the counterfeit storage facilities and used what they found there to cloth those who had lost everything to Hurricane Katrina. It seemed like a good use of bad goods, but lawyers for the offended brands were not happy. By handing out the clothing, the government was ignoring the rights of the trademark owners and the law is the law.

Since then, there has been a lot of debate about whether or not the rules could be bent in the case of extreme emergency. For that to happen, the IP holder would have to agree to allow the counterfeits bearing their name be donated instead of incinerated. But even if the original intention was a charitable one, that doesn’t prevent the fakes from ending up in the retail stream when the new owner donates a fake or sells it online. So, while the redistribution of counterfeit goods for charity or for recycling is bogged down by legal loopholes, the destruction of these goods comes with its own set of challenges.

First, there are environmental issues. Counterfeiters don’t abide by safety standards so the materials they use could be toxic if incinerated or poured into a landfill. Burning anything is hard on air quality, but our landfills are already overflowing – how much more can they take?

Then there are the costs associated with collecting, transporting, cataloging, storing and finally, destroying large quantities of counterfeit goods. Someone has to pay and it’s unlikely that the guilty party will agree to cover the bill. That leaves our government agencies or the company that holds the offended trademark to foot the bill. Hardly seems fair, does it?

The best solution to the problem is to stop the flow of counterfeits in the first place. While law enforcement agencies work hard to stop large quantities from coming into the country, Entrupy is working to stop the spread on a person-to-person level.

That may seem insignificant in the grand scheme, but we believe that people are entitled to get what they’ve paid for. We also believe that companies have a right to protect their hard-won reputations by aggressively fighting against fakes. Both are good for the economy and both are bad for the next round of counterfeiters who expect to make a large profit off of consumers.

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