Industrial Safety

Counterfeit products aren't worth the savings

Russ Kratowicz, P.E., CMRP, says piracy, fakery and bogusity have become all too common in the maintenance world.

By Russ Kratowicz, P.E., CMRP

This is about counterfeit products and intellectual property rights. In 2008, the United States Customs Office reported on seizures of counterfeit products. The document claims that counterfeit electrical products are in the top five categories, seizures were 43% greater than 2007, and most of the fakes came from China and Hong Kong. One strategy is to sell the knockoffs, not in the country that produces them, but in countries to which the legitimate versions are being exported. That way, the fakes can wreck the manufacturer’s export market. But, as you’ll read, fake electrical stuff isn’t the end of the story. Other aspects of your daily life are at risk. Remember the bit about Chinese-made pet food spiked with melamine?

You might have heard the term “grey market.” Goods so defined aren’t necessarily illegal or inferior. A perfectly qualified company can make a perfectly good product and sell it perfectly legitimately, but outside the OEM’s normal distribution channels. That’s perfectly legal, an example being privately branded products, house brands and generic pharmaceuticals. To get a bit closer to the bottom of the matter, we’re going to root around in the muck we call the Internet in search of some credible, practical, zero-cost, noncommercial, registration-free resources that will help you fend off the fakery that is inexorably closing in on us. Remember, we search the Web so you don’t have to.

From Washington and beyond

Our government is concerned about fake parts, too. It recognizes that the mere presence of counterfeits in the supply chain that your plant uses has a deleterious effect on the magnitude of federal tax revenues. So, we rely on, among other entities, the United States Patent and Trademark Office to help keep tabs on international fakery. The department’s Web site, www.uspto.gov, is your portal to an extraordinary amount of information about patents, trademarks and copyrights. After you get grounding in these basics, you can perform a site search on the word “stop,” which links you to another program called Strategy Targeting Organized Piracy (STOP!). If you want to skip the trip to the patent office, you should go to www.stopfakes.gov directly. Here, you’ll be able to read about measures taken by the U.S. Customs and Border Protection and the European Union to intercept counterfeits at the borders. If your company exports products, you might find the so-called country toolkits listed on the site to be of special interest. These are links to our embassies’ Web sites in Brazil, Brunei, China, Egypt, European Union, India, Italy, Malaysia, Mexico, Paraguay, Peru, Russia, Taiwan, Thailand and Vietnam. Part of the content on each is information about patents, trademarks, copyrights and piracy. You might need to enter the word counterfeit in the search box if the info isn’t posted on the linked page.

The insurer’s view

It’s all about public safety, a social good that pirated components might ignore.

FM Global, Johnston, R.I., the international property insurance and loss-prevention engineering company, quite logically also has an interest in keeping fake components out of the industrial facilities that it insures. The whole business of insurance is about risk and gambling on an outcome. When things really heat up at the plant, for example, the last thing you want to discover is that your installed base of bogus fire protection hardware might prove incapable of serving its intended purpose. This shared interest prompted FM to show you how to identify fakery in the components that affect insurance matters. It’s a sure bet, though, that if you go to www.fmglobal.com and enter the phrase “certification marks” in the search box, it will return a link called “FM Approvals - Certification Marks/Usage.” That link opens a page that has more links to digital images of the official marks that indicate honest products. You might want to forward this information to your receiving dock and your purchasing department. And before you leave, go back to the home page to click on “Approved standards” at the lower right of the screen. That’s where you can download any of the many standards that FM has developed during its more than 174 years of existence.

Going public

The Anti-Counterfeit Products Initiative was launched during a panel discussion on Oct. 6 at the 2008 National Electrical Contractors Association's Annual Convention and Trade Show. The online report describing the initiative offers an opinion about the source of most counterfeit electrical hardware and highlights the ever-escalating measures that Underwriters Laboratories has been forced to use to assure the public that any component displaying the famous UL label is genuine. For example, UL has been using holographic labels for more than 16 years. The article, posted at www.pr-inside.com/print910451.htm, correctly points out that everyone in the supply chain, including end users (that’s you), have a responsibility to avoid introducing fake electrical components into the distribution system. The consequences of apathy can be catastrophic.

Another article that popped up during the research for this column is “The China Challenge” by John Paul Quinn. The article, a joint effort by Electrical Contractor and TED magazines, gives the mid-2008 dollar breakdown of the items that U.S. Customs and Border Protection seized and offers a reason that the country most responsible for undermining the capitalist system through violation of intellectual property rights won’t be brought to bay any time soon. That is pretty powerful stuff. This article is only one of many posted to the Web site operated by Anti-Counterfeit Products Initiative mentioned above. If you’re concerned about bogus products, you really should pay a visit to www.counterfeitscankill.com. There are some big names in the industry sponsoring this single-focus site that’s loaded with more information than I can highlight here. Visit – it will be worthwhile.

A label you can trust

Underwriters Laboratories is interested in counterfeits because the organization’s mission is to protect the safety of consumers, to preserve the integrity of UL's family of Marks and to maintain value for those who have invested the time and resources to meet UL's safety standards. It’s all about public safety, a social good that pirated components might ignore. Fakery is a subject important enough to motivate UL to spend more than $2 million each year in defense against piracy. Because one concern, of course, is the unauthorized use of the famous UL logo seen on nearly everything in your plant, part of the money went into developing a counterfeit-resistant, holographic UL tag that appears to be too difficult to copy. Another initiative is encapsulated in the fact that if you search www.ul.com using the word counterfeit, you’ll be faced with a list of links to more than 2,700 pages that cover the topic. These folks are serious.

Electrical equipment

Two classes of pirated products kept appearing during the research for this column. It seems the world is full of factories that produce bogus integrated circuits and industrial electrical hardware. It might be the case that domestic manufacturers of such products got tired of having their oxen gored by the pirate’s mighty rapier and are now sounding the alarm more than other industries. For example, consider Eaton Corp. Performing a site search using the word counterfeit at www.eaton.com returns links to 19 pieces of content that clearly demonstrate that company’s concern. Some show how to distinguish fakes from the real deal, others are position papers that warn of the dangers that fakes pose.

Recommended responses

Almost every government facility has an installed base of electrical equipment, just like us mere mortals in the manufacturing world. The only difference between the two systems is the source of funding underlying the purchase order that secured them. Naturally, our hired hands are concerned about bogus equipment and, it appears, to a degree commensurate with that of manufacturers. A January 2008 safety bulletin published by the Office of Health, Safety and Security at Los Alamos National Laboratory addresses the identification of counterfeit version of one brand of breakers for DOE facilities. No doubt, the guidelines presented could be equally useful at locations more mundane than those the DOE maintains. The document “Identifying Counterfeit Square D Circuit Breakers” offers five recommended actions that one should take with respect to one form of fakery in any facility, DOE or otherwise. Point thy browsing device at www.lanl.gov and perform a site search on the word counterfeit. Doing so returns more than just the one article.

Another label you can trust

Many vendors who are being victimized by piracy attempt to level things out by posting on their Web sites material that warns customers of the dangers attendant on using counterfeit industrial electrical switchgear, circuit breakers and other such products. Customers also are advised never to purchase these items from the gray market and never to buy used equipment. An OEM’s insistence on being at one end of the supply chain makes economic sense. But that structure excludes the potential customer who lacks the wherewithal needed to pay top dollar for new gear. It excludes buyers who merely want to replace a component the OEM no longer produces. What’s a person to do?

The best answer is to actively deal with members of the Professional Electrical Apparatus Recyclers League (PEARL), an Aurora, Colo.-based professional trade organization for companies that refurbish, repair, remanufacture and recondition electrical components in accordance with a set of more than 150 published standards that, in some aspects, are even more rigorous than the OEMs’ standards. For example, the OEM might only test samples from a long production run, whereas, PEARL members necessarily test at the 100% level. The organization has a Web site at www.pearl1.org/main.htm, and from it you can freely download the reconditioning standards to see what you get. You can access a listing of the members and learn about the selective admission requirements needed to become a member of this elite group of electrical craftsmen. And when you buy used equipment, look for the PEARL label.

Little stuff, too

The world of microelectronics isn’t immune from the potential market risks associated with using counterfeit components in a design that can fail soon after a consumer purchases a hand-held device. Gregory A. Quirk and Allan Yogasingam at Semiconductor Insights, a consulting firm serving the digital electronic industry, wrote a rather long, article in October 2007 that describes the several scenarios under which a smaller manufacturer of consumer devices might be enticed into knowingly buying questionable components. The root reason in each case is economic survival, at least in the short run. The situational motivations are both compelling and sad. Let’s not get into the kind of traps detailed in “Counterfeit parts - Baiting the trap.” You’ll find it posted at EE Times India, a Web site owned by eMedia Asia Ltd. Visit the subcontinent at www.eetindia.co.in and enter “baiting” in the search feature.

Another entity that warns about bogus electronic components is Design Chain Associates LLC., San Francisco. Its article, titled “Counterfeit Electronic Component Resources,” presents a list of components that are known to have been counterfeited. If your plant purchases discrete components, you might want to pass along the tips to the folks in your purchasing department so they can avoid getting scammed. The article, posted at www.designchainassociates.com/counterfeit.html also includes a remarkably long bibliography with links to other online articles and resources germane to the fine art of microelectronic fakery.

Happy motoring

Not to be too alarmist about the whole matter, but your trusty set of GM wheels also can be victimized by counterfeiters. There have been documented cases of oil filters stuffed with rags, transmission fluid that was really cheap crude oil dyed red and brake pads made of pressed grass. GM is fighting back. “A bad fit” by Kelly Kolhage is a six-page cover story in the magazine Intune, which is published by AC Delco, General Motors Corp. It chronicles the moves in the game of one-upmanship taking place between GM and the counterfeiters. You should drive over to www.acdelcotechconnect.com/pdf/int_V23I308.pdf and, in the meantime, be careful with what you put in your vehicle, regardless of make.

The friendly skies

There was a time when going on a business junket via airplane was fun. How life has changed. Given what one must now endure merely to occupy the assigned seat, flying has become a major drag for those of sound mind. I mention this only because I thought I’d toss out another factor for your trip planning decision process. I think the title of the Jan. 1, 2009 article in Aviation Today magazine says it all: “New Technology Could Protect Against Parts Counterfeiting,” by Jim Clark. Yes, my friends, there appears to be a risk that a bogus part or two is all that separates you from terra firma only six miles below. Dispatch your aviatophobic desk rodent to www.aviationtoday.com/am/issue/techfocus/28617.html after fastening your seat belt.

Without comment
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