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Cracking down on counterfeit packaging

Legislation expands criminal law to specify counterfeit packaging and labels for the first time.

When Lauren Perez picked up the phone at her desk in Florida, her mother’s voice jumped through the line. Mom was shopping in New York City’s Chinatown and had just purchased an exquisite handbag from a street vendor, for an exquisite price.

“Can you believe it,” said the excited, bargain-hunting elder Perez. “And for an additional $10 they will put a Prada tag on it.”

The younger Perez volunteered that anecdote when asked about a bill that passed the House in May and is now sitting in the Senate Judiciary Committee. Called the Stop Counterfeiting in Manufactured Goods Act (H.R. 32), it is that rare piece of congressional legislation that focuses almost exclusively on product packaging and labels.

Its intent is to expand the criminal law so that federal prosecutors will have an easier time going after counterfeiters that manufacture bogus product labels and packaging, like the Prada tags the elder Perez was offered in Chinatown. The bill, for the first time, defines counterfeit labels and packaging as targets of the criminal law, and also allows federal prosecutors to force counterfeiters, again for the first time, to give up the packaging and labeling equipment they used in their crimes.

Becoming high-profile issue

Counterfeiting, especially by Chinese firms, is an increasingly high profile issue on Capitol Hill; and, in a recent twist, the focus has been more on counterfeit labels and packaging than on the counterfeit product itself.

David Pearl, II, executive vice president of Uniweld Products, Inc., Ft. Lauderdale, Florida, says Chinese counterfeits have cost the company $1 million a year in lost sales in Saudi Arabia, one of the markets for the automobile manifolds the company markets. “The instruction sheets we provide with our product are copied with our name, address and telephone numbers, and the packaging even carries the American flag that we put on our own box,” Pearl explains. “The product and the packaging are copied to a ‘T’.”

James Christian, vice president and head of global corporate security for pharmaceutical maker Novartis International AG, Basel, Switzerland, states that counterfeiters are so sophisticated that they “can also make and stamp tablets with company logos and put them in special packaging such as blister packs.”

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