BizAims

The illegal business of copying various products, including the production of counterfeit computers, continues to increase, while producers of genuine goods continue their legal pursue. It seems like the more illegal businesses of such kind are closed the more new ones appear.

There's no doubt that faking popular brands became a multi-million-dollar business. The whole world is flooded with counterfeit Nike shoes, clothes and bags labeled with popular brands. The estimates of 2001 brought by the International Chamber of Commerce showed that fake goods account $200 billion each year, which is about 8 percent of the whole world trade. Sales of counterfeit products online reached $25 billion. Such figures tensed the relationship between the United States and China. This is because most counterfeited products are produced within the boarders of People's Republic of China, which is also the home of fake software and hardware.

An article from the Government Computer News reports that the agents of the United States Custom and Border Protection continue to seize in large numbers fake computers, technology parts as well as network hardware. However, the counterfeit products are still sold in huge numbers on the US market. But there's more - fake computer parts are widely used in government agencies. Generally speaking the violation of intellectual property for many years has been a great issue, especially for the technology field.

According to Therese Randazzo, who holds the position of director at CBP's Office of Strategic Trade, the amount and range of fake computer products seized in 2005 and 2006 has been huge. She also mentioned that in 2005 the Custom and Border Protection seized 220 shipments with a total value of $4.8 million. The most faked products included: laptops, notebooks, chips, monitors and keyboards. The contemporary technology also allows faking such components as interface cards, switchers, routers along with many other tools applied in local and wide-area networks.

In addition some manufacturers are able to copy memory sticks, memory modules and flash drives. Such products bear a lower quality and in most cases are not made in accordance with the manufacturing safety standards, which is why they represent a potential hazard for the consumer. Counterfeit computers and computer components are widely sold via Internet. They mainly attract with their lower prices. Usually consumers and public sectors purchase these counterfeit products at unsuspecting retail stores and other legal sellers.

There is no doubt that China holds the biggest share of fake computers and computer parts. The experts consider that this share accounts about 80 percent of the whole number of faked products of this type. A survey conducted by the Quality Brands Protection Committee showed that most of Chinese market's products that feature the label of the member company's brand are in fact counterfeit products. World's annual losses because of fake products are huge: only in the United States businesses register losses that rang between $200 billion to $250 billion in revenue. In addition, to fight the problem some companies spend each year enormous sums of money, ranging from $2 million and till $4 million.

It is worth mentioning that back in 2001 a group of companies created a nonprofit membership association in order to guard their intellectual property. The association is called the Alliance for Gray Market and Counterfeit Abatement and it includes such members as: Cisco Systems, Hewlett-Packard, Nortel Networks, 3Com, Lexmark and Qualcomm. The federal law, entitled the Stop Counterfeiting in Manufactured Goods Act, was developed to help government authorities confiscate and destroy fake products more effectively.

In the United States the government does not possess enough technology and specialized personnel to look through each and every shipment that enters the country.

According to New York Times, on February 2008 the officials from the United States and the European Union were able to successfully end a two-week operation that resulted in the confiscation on more than 360,000 counterfeit computer components. The value of the seized products reaches $1.3 billion.

The fake products included different computer components and fake integrated circuits. All of them featured labels of more than 40 brands, including Intel, Cisco and Philips. Experts consider that Chinese manufacturers are the ones to blame for flooding the European and US markets with counterfeit products.

More on Chinese counterfeit computer equipment coming up. Radio Australia reports that FBI joined forces with the Department of Homeland Security, the Royal Canadian Mounted Police and authorities of the land of fake products, China, to confiscate fake Cisco Systems computer equipment made in China. The total value of the seized equipment goes over $76 million.

According to the US Justice Department, the confiscation of the counterfeit hardware prevented consumers from the risk of network infrastructure breakdowns.

Chinese Chips

No, these are not chips you see in a grocery store, though those chips, if labeled "made in China", might as well be fakes. The mother of most counterfeit goods is also the home of fake computer chips. Not so long ago two brothers from Texas were arrested and charged with selling fake computer equipment. But what is really amazing is that the two Americans managed to sell counterfeit computer equipment to such clients as: the Air Force, Marine Corps, Federal Aviation Administration, Department of Energy, lots of American universities as well as defense contractors, including Lockheed Martin.

The two "businessmen" are Michael and Robert Edman. The prosecutors stated that they acquired cheap network cards from a supplier located in China. In addition they bought labels and boxes bearing the logos of the hardware company, Cisco Systems. Only after a source in China informed FBI about the counterfeit products, there was no one to figure out that the computer equipment, labeled Cisco Systems, was actually a fake. According to security experts the supply chairs are expanding and this means that there's little chance anyone will be able to assure that specific components will fit computers hat are used in air traffic control towers, banks and weapons systems.

Various viruses, Trojan horses and spyware represent a great threat to consumers and government agencies. But a bigger threat may from counterfeit computer parts. Just think that you purchase a router, monitor or a computer that is already equipped with malicious instructions, not to mention security issues that are inserted forever into the silicon.