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Cheaply bought – paid too dearly!
Brand and product piracy has (almost) nothing but losers

On February 12, 2010 the „Plagiarius Award” was awarded for the 34th time. Action Plagiarius grants this negative award at the annual “Ambiente”, the world’s largest consumer goods trade fair, during an international press conference. The prize winners 2010 were presented by Frank A. Dassler, General Counsel of the adidas Group. The award was given to those manufacturers and distributors whom the jury has found guilty of making or selling "the most flagrant" (design) imitations. According to the German saying “to earn oneself a gold nose” (= to earn much money) initiator Prof. Rido Busse chose as his key figure a black painted gnome with a gold nose to signify the huge and illicit earnings from product imitation.

Since 1977 Action Plagiarius has been increasing the public awareness of the unscrupulous business practices of imitators who copy 1:1 the innovative design and technical solutions of successful products. The aim of Plagiarius is to inform the public - industry and consumers alike - about the sweeping extent of the damages and dangers incurred by fakes and plagiarisms. Furthermore Plagiarius serves as a platform and is a great conduit for industry to shed light on this problem on an international basis. Again, the huge public awareness level of “Plagiarius” has made a strong impact. Numerous imitators have withdrawn remainders of stock from the market, have signed cease and desist letters or revealed their suppliers.

Economies are driven by good ideas
In view of the dramatic increase of brand and product piracy the industrial nations are forced to defend and even enhance their winning margin concerning their design- and engineering know-how in order to stay competitive. Without creative ideas there would be no new products – and without innovation there would be no progress, no jobs and no wealth. To protect industry as well as the consumers from harm, illegal and inferior imitations have to be fought and prosecuted with all consequence and severity. Copies are parasites of original products - without their host they are nothing. It is original products that advance our world - originals impart quality, safety and trust.

Brand and product piracy – a lucrative business for criminal bosses only
The economic damage due to plagiarism is hard to quantify. However, the annual statistics from customs convey a solid impression of the gigantic dimension that this form of white-collar criminality has reached. In 2008 customs officials seized more than 178 million counterfeit goods at the EU borders – an increase of more than 100% compared to 2007.

According to the European Commission more than half (54%) of these knock-offs had their origin in China. Yet, brand and product piracy is a global problem. Therefore, the focus of denunciation must not only be on those who manufacture fake products, but also on those who purchase and resell or even deliberately commission cheap copycats. Evidently enterprises, including retailers from all over the world, profit from trade with counterfeiters and product pirates range from small-time criminals up to organised crime. The profit margins are, at least in some industries such as fake pharmaceuticals or pirated CDs and DVDs, higher than those of drug dealing – the risk of criminal prosecution, however, is quite low.
According to Interpol organised crime increasingly finances its world-wide activities by trade of counterfeit goods – and it supports its existing structures from drug, arms and human trafficking. Criminals of all kind are the beneficiaries of this underground economy.

Both, counterfeiters and consumers hazard the risks of fakes with recklessness
Alarmingly, studies show that in the 21st century fakes and plagiarisms are socially accepted. Consumers often argue that the cheap price is the decisive factor. The problem is that consumers are label-seekers and at the same time bargain hunters. They are keen on brands and labels, but not willing to pay the price for an original, unimitated version. It is therefore essential, that customers understand that the supposedly high price of the original product is no caprice or whim on the part of the manufacturers, but rather reflects the value of factually performed services and investments.

The process, from an innovative idea up to the finished product ready for serial production, is quite time and cost-intensive and it comprises many stages of development, most of which are not clear to laymen: From design and engineering to tool manufacture and up to quality controls and marketing activities; all these performances, as well as services and guarantees, have to be included in the final retail price.

Besides, a supposedly cheap price does not testify anything about the price-performance-ratio. How much is a flask worth that does not insulate - or sunscreens without sun protection filter? How much are defective spare parts, pharmaceuticals without active ingredients or explosive mobile-phone batteries worth…? Are these bargains worth our lives?

Undoubtedly, the fabric workers in the developing countries, who manufacture the mostly inferior fakes are amongst the losers. Often, without protection from dangerous machinery and noxious chemical substances - and under indescribably unhygienic conditions - the production of bags and shoes, cigarettes, pharmaceuticals and cosmetics takes place – bugs, bacteria and mildew inclusive. Astonishingly, neither the knowledge about the degrading working conditions nor the endangerment of their health deters consumers from buying counterfeits.

Aim: Less demand on the part of consumers – More severe penalties for counterfeiters
In order to successfully combat brand and product piracy the following two leverages have to be applied: First of all, the supply has to be curtailed drastically and this will only function by deterrence in the form of much higher penalties and prison sentences. As long as the profit margins are similar to those of drug dealing and at the same time the penalties are low, the product pirates will continue and even expand their lucrative business. Secondly, it is crucial to nip the demand in the bud and Politicians, trade associations and corporate groups will have to act concertedly. Together they will have to intensify their communication efforts in order to heighten consumer consciousness for this problem. The focus of communication has to be on both, the risks and dangers incurred by fakes and plagiarisms as well as the value and benefits of original products i.e. “price-performance-ratio”. It is most important to convince the customers – especially against the background that with globalisation not only the copies, but increasingly many original products are manufactured in low-wage countries. Only if the consumer understands the reasoning behind the supposedly high price of the original product will he be willing to pay this price and restrain from buying cheap fakes.

Hands-on sensitisation in the Museum Plagiarius
Inaugurated on April 1, 2007 the Museum Plagiarius in Solingen (Germany) shows more than 350 originals and plagiarisms of all kinds of sectors in direct comparison. Visitors are grateful for all the background information provided and for the “first-hand-view” on the problem and its impact. The dialogue with the museum staff has often shifted attitudes regarding counterfeits.

Consumer Event Day – April 25, 2010
In cooperation with diverse partners the Museum Plagiarius plans an event for families and young people in order to enhance sensitisation and make the risks of counterfeits much more tangible and comprehensible. Scheduled are e.g. the destruction of confiscated goods, short reports on Internet-piracy, exhibitions from customs of fake products and protected species, tracking dog show, etc. We look forward to your visit !

The Jury of the Plagiarius-Competition 2010:

Each year the jury is put together individually with specialists from diverse sectors (Design, Intellectual Property, Economics, Media etc.). The following persons formed this years' jury:

Sybs Bauer MA(RCA)
Designer, designkunst, Hamburg

Guido Baumgartner
Director Global Brand Protection COTY PRESTIGE LANCASTER GROUP GMBH, Mainz

Peter Dahlhausen
Managing Director P.J. Dahlhausen & Co. GmbH Medizintechnik, Cologne

Dr. Barbara Grotkamp-Schepers
Director German Blade Museum (Deutsches Klingenmuseum), Solingen

Sabina Hampe
Head of Brand & Business Unit Communications Henkel AG & Co. KGaA, Duesseldorf

Anastasia Li-Treyer
Director Promarca – Swiss Brand Association / President STOP PIRACY, Bern

Michael Pluta
Managing Director PLUTA Rechtsanwalts GmbH, Ulm

Dr.-Ing. Hans-Jürgen Sattler
Managing Director Wanzl Metallwarenfabrik GmbH, Leipheim

Michaela Schenk
Managing Director MAWA GmbH, Pfaffenhofen/Ilm

Harald Wüsthof
Managing Director ED. WÜSTHOF DREIZACKWERK KG, Solingen

Legal Advice:

Dr. Aliki Busse
Lawyer, Busse & Partner - Lawfirm, Munich

The Prize winners of the Plagiarius-Competition 2010:

The jury met on January 16, 2010. Three prizes, five distinctions and two special prizes have been awarded; total entities: 43.

1. Prize
Fresh N Pure Ice Cube Tray

Original: Tupperware Deutschland GmbH, Frankfurt, Germany
Plagiarism: Shanghai Yuhao Household Appliance Manufacturing Co., Ltd.,
Shanghai, PR China
Distribution: Two German retailers have signed cease and desist letters, as well as withdrawn remainders of stock from the market and destroyed them

2. Prize
Toy-Combine-Harvester “Claas Lexion 480”

Original: BRUDER Spielwaren GmbH + Co. KG, Fuerth, Germany
Plagiarism: Distribution: A.H.U. ADAR Dariusz Adamiec, Warsaw, Poland

3. Prize
Multimedia Chair “Music Rocker cubic”

Original: Easychair GmbH, Blomberg, Germany
Plagiarism: Distribution: friboss Handelsgesellschaft mbH & Co. KG, Heilbronn, Germany

Five „Distinctions“ (equal in rank) were awarded:

Glass Cutter “Silberschnitt 100.0”
Original: Bohle AG, Haan, Germany
Plagiarism: Royal Union Co., Ltd., Ningbo, PR China
Distribution: EURO SHOP, Operator: Paul GmbH & Co. KG, Giessen, Germany

Loveballs “SMARTBALLS original”
Original: FUN FACTORY GmbH, Bremen, Germany
Plagiarism: Distribution: Sàrl, Contern, Luxembourg

Hand Shower “HANSACLEAR” with acrylic-transparent shower head
Original: Hansa Metallwerke AG, Stuttgart, Germany
Plagiarism: Zhejiang Cixi Chenxin Sanitary Wares Co., Ltd., Ningbo, PR China

Ornaments „ALICE“, „AMOEBE“, „STIXX“ and „ROMANCE“
Originals: Koziol>> ideas for friends GmbH, Erbach, Germany
Plagiarisms: Hexin Electric & Plastic Factory, Guangdong, PR China

Chopper „OXO Good Grips“
Original: OXO, New York, U.S.A.
Plagiarism: Yangjiang Yuzhong Daily Articles Co., Ltd., Guangdong, PR China

The following two "Special Prizes" were awarded:

Special Award for a Falsification
Kitchen Knife Set (3 pieces) incl. Packaging

Original: ZWILLING J.A. HENCKELS AG, Solingen, Germany
Falsification: Cheng Fa Hotel Product, Guangzhou City, PR China

Special Award for a Falsification
„GLOBAL“ 6 pieces Knife Set with Knife Block and Packaging

Original: Master Cutlery Corporation, Funabashi, Chiba, Japan
Falsification: unknown


The award ceremony of „Plagiarius 2010“ took place as follows

Consumer Goods Trade Fair „Ambiente“
Congress Center, Frankfurt Fair, Room „Illusion 1-3“
on Friday, February 12, 2010, 11:30 a.m.

The laudatory speech on the prize winners was made by
Frank A. Dassler, General Counsel adidas Group.

The Plagiarius prize winners 2009 + 2010 will be presented at the Special Show "Plagiarius" from February 12-16, 2010 at the Foyer 5.1. / 6.1. As of February 19, 2010 the prize winners 2010 will be presented in the Museum Plagiarius in Solingen. (Bahnhofstr. 11, 42651 Solingen, Germany,
Open: Tuesday-Sunday 10-17 h)