The article addressed the issues confronting the Imaging Supplies Coalition, which purports to police imaging supplies counterfeiting. The regular membership fees for the organization are a hefty $15,000, but remanufacturers can join for a mere $10,000 under a program initiated recently.
Duffy was quoted as being perplexed as to the lack of aftermarket participation: "He [Duffy] says the lack of response may be due to a clause in the membership application certifying that applicants ‘have not been convicted of the criminal offense of trademark counterfeiting nor has judgment entered against [them] in any civil action for trademark counterfeiting.’"
Slumping stocks have reinvigorated the OEM appetite for dollars, and remanufacturers are once again in the damage path. Whether depicted as trash collectors, charlatans or crooks, remanufacturers are under attack in the latest wave of OEM propaganda.
The Imaging Supplies Coalition has a lofty purpose. to abrogate counterfeiting of imaging supplies. Unfortunately, counterfeit imaging supplies are turning up everywhere, from the Far East to U.S. office superstores. On mainland China, counterfeit supplies are so pervasive that there are even counterfeit products bearing the brands of aftermarket industry vendors, such as PrintRite and Static Control. ISC claims that the problem is taking a $1 billion bite out of the industry.
These criminal actions are deplorable and are injurious to both OEM and legitimate imaging supplies businesses, such as remanufacturers. More so perhaps for the remanufacturers because the sale of these products cut into the lower- priced unit producers’ market share while simultaneously tainting the image of reused products.
However, few remanufacturers can afford to pay $10,000 per year to join an organization to combat this concern. According to the HCSJ article, Duffy believes that the membership cost is not prohibitive. Duffy ameliorates the impact of the statement regarding involvement in litigation by adding that even "legitimate" firms "have had some sort of civil complaint filed against them."
The comparable integrity of industry participants aside, no one wants to do business in a marketplace that is rife with thieves. Therefore, an organization that is legitimately trying to fight that problem would enlist the aide of all the market’s members, not erect overwhelming financial barriers to membership nor color a legitimate market sector as corrupt.
Nighttime Raid by the Counterfeit Cops
Counterfeiting is a serious problem that should be investigated and arrested, if possible. However, due process still is the law of the land. The accused is innocent until proven guilty, unless you are an aftermarket distributor of imaging supplies.
Industry members tell tales of clandestine raids at distributor warehouses during which shipments are torn apart by OEM representatives with armed police escorts. When these raids turn up no contraband, there are no apologies and no efforts to compensate for products and packages that are destroyed.
What do OEMs glean from such tactics? Plenty. They learn about gray market movement of goods. The OEMs manufacture products all over the world and attempt to control distribution, and therefore prices and profits, by assuring that goods are sold in the markets for which they were destined.
Take HP’s ink jet cartridges. Cartridges in tighter economic markets such as Asia have been built with greatly reduced ink quantities. These cartridges are not meant for distribution in the U.S., and can cause customer confusion and anger when sold as comparable to cartridges in the U.S. market.
However, with a few notable and irrelevant exceptions, gray market sales are legal. Often gray market goods surface after product is "dumped" or sold overseas for fast dollars. Some of that product may be bought and then resold into other markets. The danger in these deals, of course, comes when the goods may be comprised of counterfeit goods. (This is at issue in the pending Finetone litigation.)
"While I can’t verify the number of legitimate anti- counterfeiting activities by OEMs and the Imaging Supplies Coalition, I can say that a significant number of companies have claimed complete innocence," said Lester Cornelius, president of Optical Technologies Corp. "It is my opinion that some OEMs and the ISC appear to be engaged in a witch-hunt to stop legitimate gray market sales. I have watched first-hand how Lexmark pursues counterfeiting, and it is an appalling web of truth and lies designed to confuse a judge and intimidate the company they accuse."
As in all international transactions, two rules of thumb apply. 1. Know from whom you are buying and 2. If it looks like it is too good to be true, it probably is.
Some OEMs may be using anti-counterfeiting efforts as a way to police both counterfeiting and gray market problems. Once ensnared in an OEM dragnet, small businesses like remanufacturers are at a severe disadvantage, regardless of their level of culpability.
Check it Out, but only if you’ve got clout
The ISC has spawned wonderful anti-counterfeiting programs such as the "When in doubt, check it out" program, which allows anyone to submit a suspicious product for determination as to its authenticity. ISC meetings bring together OEM representatives to discuss more and better ways to pursue bad guys and bad goods.
But it is logical to infer that these meetings are also a breeding ground for the exchange of information between OEMs. And the price tag for joining assures that the club remains exclusive.
However, to its credit, the ISC allows members of the press to join for free. Whether Recharger Magazine representatives are extended an invitation remains to be seen, but our request for an application is in. And our lack of civil and criminal records qualify us for membership.
Editor’s note: If your company has been accused of counterfeiting and subjected to any OEM or ISC activity, please notify Sue Jones at the Office of Industry Advocacy at sue@rechargermagazine.com. All information will be held in confidence.
