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The luxury goods market is rampant with counterfeit products – take the Rolex watch as the classic example. But it’s not just expensive products that are being counterfeited.
Counterfeiting is a trend that seems to be on the rise, according to European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) estimates. Their research indicates that the rapid pace of technological advancement and growing supply chain complexity are attributing factors for this rise. The recent EUIPO-OECD study ‘Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact’ suggests that this represents 5% of all EU imports (EUR 85 billion).
Counterfeiters tend to copy commercially successful products with which legitimate industries generate the largest share of their profits and investment capacity. This issue has been raised in the pharmaceutical industry in particular, where in Europe alone, counterfeit drugs are estimated to represent a $15 billion illegal industry, according to World Health Organisation (WHO) research. This estimate could be a conservative one if we consider that some falsified medical products are almost visually identical to the genuine product and therefore very difficult to detect.
There have been many reports in the media about the growing issue of counterfeit bearings entering into the supply chain. Though one may assume that it is the plastic bearing side of the igus business that is the focus of this article, it is, in fact, energy chains. More to the point, it is not just ones from igus that are being counterfeited. Other manufacturers are also experiencing similar issues where customers think they are buying a genuine product, but it is instead a poor quality fake with performance problems arising within a year of service.
igus currently holds approximately 450 industrial property rights in 28 countries. With a patent, the holder of the patent receives rights. Among other things, they can demand from other people that they refrain from commercial use of the patented invention. Prohibited commercial use is: the manufacturing, offering, placing on the market, using, importing or exporting. Thus, what is generally not often known, namely the trading of, exhibition of etc. a machine in which a patent-infringing product is contained, is also a "prohibited commercial use". This is the case, regardless of whether the installation occurs through the manufacturer or through an upstream supplier. If the patent holder determines that their rights have been infringed, they can take legal action to defend their patent rights.
In certain circumstances, where some of the technical properties are not as critical, such as in furniture applications, the decision to go down this route can be tempting. However, after a patent infringement is determined, the first legal step, the ‘demand to issue a cease and desist declaration‘ through a lawyer can, through the orientation of the fee schedule on the revenues of the patented product, very quickly result in 5-digit costs plus the patent holder's own legal fees. This should be considered in the assessment of what may initially appear to be a more favourable price for a counterfeit.
It is not just cheap equipment where counterfeits are being found, igus has discovered examples on some pieces of high-end equipment. There have been instances where the customer has used igus e-chain in their initial prototypes. After beta testing, approvals and certification, when it went into volume production, they have then exchanged it for an alternative product. The reason? To cut costs. It may seem like a sound purchasing decision at the time but it is further down the line when a problem can transpire.
One such customer, who had a global manufacturing network, was spending a small fortune on field service repairs; the common problem was failure of the cable chain, a counterfeit copy of the original igus part. This is when open dialogue with a customer is invaluable – if we know the end application, we can design cost out. In this case, instead of having a two part chain, we developed a single part solution, which met the price/performance requirements for the application and solved all the quality issues.
There are tangible benefits to using original parts; the main one being their predictable and long service life. This is because the knock-on effects of component failure in production may be considerable; they can include the associated costs of unplanned downtime, which can be extremely high, end customer dissatisfaction, lost reputation and, ultimately, loss of business.
Buyers should look for components that have been subjected to extensive research and testing. If the end equipment is destined for use in multiple countries, then consider a reputable supplier that has a global presence. Upon delivery, make sure of the product’s authentication. Typically, this may include the manufacturer’s safety certifications and warranty documentation. On the product itself, part number and/or company logo are common forms of identification of an original product. QR codes are currently being adopted – they not only assist in rapid part identification, industry considers them less susceptible to forgery.
There are occasions, however, when manufacturers are unknowingly in the situation of having a counterfeit cable chain in use. In these cases, igus will not take legal action, as long as there is willingness on the part of the company to support igus in enforcing the patent rights against the originators of the counterfeits. If there are ever any doubts, please contact igus directly for advice and assistance.
About the author:
Matthew Aldridge was appointed UK managing director of igus in 2013. Having joined igus® in 1996, Matthew took immediate responsibility for developing the bearings area of the business. He was promoted to product manager and then director of that division in 2004.
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