Product counterfeiting at the state level: An empirical examination of Michigan-related incidents

Abstract

Product counterfeiting represents a range of criminal activities associated with intellectual property rights infringement of material goods. Virtually, any product, from pharmaceuticals and food to auto parts and electronics, can be counterfeited. Although the precise extent of product counterfeiting is not known, by most accounts the problem is substantially large and growing, and affects many, including consumers, industry, and governments. Despite the scope and scale of the problem, to date there are few empirical examinations of product counterfeiting. To address this gap and help policymakers better understand and respond to this problem, this article systematically examines the nature of product counterfeiting incidents related to Michigan as evident in the open-source literature. We develop initial evidence-based policy lessons to generate discussion about this crime and highlight directions for future research.

Illicit Market for Counterfeit Products at Small Businesses in Michigan

“…Overall, the amount of research focusing specifically on businesses engaged in sales of counterfeit goods is limited. Heinonen and Wilson (2012) identified 19 businesses as actors involved in Michigan product counterfeiting incidents. In a survey of small- and medium-sized business owners, Manley, Wiid, and Cant (2015) found that the majority of business owners viewed counterfeit goods unfavorably, indicating they would not purchase counterfeits to sell in their businesses because of their low quality and harm to both the brand owning companies and retail industry.…”

“…Government Accountability Office [U.S. GAO], 2010; Wilson, Sullivan, & Hollis, 2016), a variety of factors indicate that product counterfeiting is a growing global problem, including an increase in customs seizures (U.S. Customs and Border Protection [U.S. CBP], 2017), the emergence of counterfeits in a broader range of industries (OECD, 2008; UNICRI, 2007), and the persistent widespread availability of counterfeit goods in both physical and online marketplaces (Heinonen & Wilson, 2012; Phillips, 2005; Satchwell, 2004; Wilson & Fenoff, 2014). Estimates of the costs of product counterfeiting have grown from less than US$30 billion in the early 1980s (Abbott & Sporn, 2002; Stern, 1985) to more than US$200 billion by 2005 (OECD, 2008), with recent estimates of the international trade in counterfeit goods at US$461 billion, or 2.5% of world trade (OECD & EUIPO, 2016).…”

Measuring the “Unmeasurable”

“…One such effort at using this method to study product counterfeiting has been the Michigan State University Center for Anti-Counterfeiting and Product Protection (A-CAPP) Product Counterfeiting Database, which assembles information on crimes involving counterfeit products committed in the United States (Heinonen & Wilson, 2012; Sullivan et al, 2014; Wilson & Heinonen, 2010, 2011). In building the database, A-CAPP researchers reviewed more than 3,100 documents from industry, government, media, scholarly, and still other sources.…”

“…Businesses face both losses and threats to their reputation and innovation as a result of counterfeiting (Heinonen et al, 2014; Speier, Whipple, Closs, & Voss, 2011). Profits from counterfeit goods also fund a variety of criminal and terrorist activities (Albanese, 2011; Heinonen & Wilson, 2012; International Anti-Counterfeiting Coalition [IACC], 2005; Sullivan, Chermak, Wilson, & Freilich, 2014; U.S. Department of Justice, 2008).…”

Open-Source Data and the Study of Homicide

“…2 For example, researchers studying gender and corporate crime augmented their primary data set with open-source information that came from financial reports, industry publications, government press releases, Department of Correction's data, and web searches (Steffensmeier et al, 2013). Other examples include studies on product counterfeiting (Heinonen & Wilson, 2012), human trafficking (Kangaspunta, 2003;Wilson & Dalton, 2008), and other forms of financial crimes (Kankaanranta & Muttilainen, 2010). Research on other "specialized" types of homicide victimization have also benefitted from open-source materials (see, for example, Fox & Levin, 2005;Quinet, 2011).…”