Cigar Aficionado Magazine, April 2008.

How to avoid purchasing fakes inadvertently?  Here are a few tips:

1. Price Point:  Often the most telltale sign.  If the price is too good to be true, it usually is. Do yourself a favour and check the price against the original manufacturer’s recommended retail price on their website or that of an authorised dealer. Deep discounts are a huge tip-off. Before you make a purchase, stay aware of the typical market price for that item. If most mp3 players begin at 100 Dollars/Euros/Pounds, one being offered up for 40 may be a fake. Brian Duggan of the Motor and Equipment Manufacturer's Association, who researches counterfeit auto parts, explains "if it sounds too good to be true, it probably is."
2. Contact is Key: Especially if buying online, determine the physical location and contactparticulars of the seller. Test their authenticity and call them by phone or check out their address on Google – remember location, location. Examine closely whether they really are an authorised and reputable retailer. If you are buying from an online auction site, email the seller and see how willing they are to reveal their authentic contact details – often an excellent polygraph test.
3. The Devil is in the Detail:  become an avid label reader. Be shop and tech savvy. Counterfeiters often make spelling mistakes, get the type font wrong or some other detail. Spot the differences. If something just looks wrong, follow up with further investigations – contact the manufacturer’s customer service centre. And study the product itself closely. Vintage wines are supposed to have sediment in the bottle as a natural occurrence of ageing, the labels are often damaged and have stains while most Chateau wine corks should bear the correct vintage and trademark. Hi-end mechanical watches always have a very distinctive dial. Cartier watches, for example, have the word “Cartier” minutely etched onto the “V” of the Roman numeral “VII” and counterfeiters oftenmiss this detail in their replicas. Authentic Cuban cigar boxes are very detailed and must carry the warranty seal, the “Habanos” chevron, hallmarks and proper bands around the cigars.  Recent fake Colgate toothpaste packaging used the British and not American spelling of “favour” and indicated African countries as the source of origin where Colgate does not manufacture.
4. Call upon the Experts: This may not always be possible but if you are able, call in the experts such as watchmakers, winemakers, car engineers and other specialists.  Because copies are so perfect these days, even the gurus find it impossible to determine authenticity without a full scientific analysis – often based on an in-depth test such as DNA fingerprinting.

"Luxury fakes is my dubious specialty.  In the course of my work, Imanaged to meet with New York Police Commissioner Kelly, President Barroso of the European Union and high-kick wizard Jackie Chan.  On each occasion, I dressed to impress. I paired my Armani suit with an Alfred Dunhill shirt, Versace tie, Ferragamo belt, Louis Vuitton shoes and Givenchy socks. The Commissioner wanted to arrest me, the President thought I was certifiable and Jackie tore my outfit to shreds kung fu style and left me facing the press in my underpants.  My entire outfit was fake and these gentlemen do not take kindly to counterfeits.  Neither do I.  For the last 20 years my job as an intellectual property lawyer has taken me from Ciudad del Este, to Guangdong Province in China, to Manhattan’s Canal Street as I search for pirates of luxury goods.

Counterfeits are often associated with the shady street vendor, peddling imperfect copies.  But in the last eighteen months I have witnessed a paradigm shift in the manufacturing of fakes.  It is still only a ripple – but it is set to become a tsunami.  It will change the face of manufacturing and retailing and it is fuelled by a quantum leap in technological engineering.  Here’s the story –

The counterfeit world is often the world of the shabby and shoddy.  But things are changing. Why is there such a sudden surge and vast proliferation of almost copy- perfect fakes in the last 18 months?

First, there are two types of counterfeits.  At the bottom of the pile, you find what I call “genuine fakes”.  Here we are talking about the knock-off luxury watch, which until recently, was sold on the street corners of New York, Milan and Hong Kong.  “Genuine fakes” are typically made and sold by mom and pop enterprises. Both seller and buyer know the product is fake.  A $20 Rolex watch?  Yeah, right. 

But a whole new wave of second-generation counterfeits has emerged:  “digital fakes”.  The advent of digital technology has made perfect copies possible by the touch of a button on a keyboard.  Never has copying been so easy, quick and of such high level.  Digital fakes are immaculate in their appearance.  Their packaging is superb and typically includes warranty cards of such high standard, they fool experienced experts. Only upon closer scientific testing can the differences be distinguished between original and imitation.

I first came across this new way of producing fakes about a year ago during a raid on a factory in southern China.  In the midst of all the commotion - raids are noisy, disorganised and happen really fast  - I spotted, quite by chance, a stack of innocuous-looking software discs.  Upon subsequent analysis, we discovered that the counterfeiters made smart use of digital technology and laser scanners in order to reverse-engineer highly complicated mechanical watches.  I was so fascinated by this ingenuous use of technology, that I visited Minolta’s laser scanner labs after my return home.  I will never forget the moment I was invited to remove my watch from my wrist and place it on the laser scanner turnstile.   Within 5 minutes  - eerily - a picture perfect three D digital version of the outside contours of my watch was produced:  the ultimate, undetectable copy.

Armed with this knowledge, our investigators in Hong Kong track-and-traced the sources of the software back to  -- not China, surprisingly -- but Singapore, Taiwan and Hong Kong.  In other words, the triads and larger crime syndicates in these locations are “outsourcing” their counterfeit manufacturing to the less expensive labor markets of China, Vietnam and Thailand.  And Asia should not be singled out.  Organised crime groups in other parts of the globe have also jumped on the digital fake revolution.  Not just luxury goods, but every product known to mankind can, and is, being perfectly copied. This is sure to have profound implications for global future retail.

What follows is a rag-tag list of fake products  -- digital and non-digital -- on the market today:  Cell Phones including iPhones  -- it didn’t take but a blink for counterfeiters to concoct a copycat model.  iPhone Q380 was being scooped up across China for $75 to $250 soon after the launch of the original in the US.  And in June 2007, the unfortunate Xiao Jinpeng died when a phoney Motorola battery in his counterfeit cell phone exploded.  Book Titles from authors such as Isabel Allende, J.K Rowling, John Grisham and the Oxford English Minidictionary have been faked as have baby milk formula, whisky, Colgate toothpaste, Viagra (the ingredients can be inactive but also positively harmful – authorities recently found phoney Viagra sprayed with lead-based blue paint and pills made from cement powder), antibiotics, anti-cancer drugs, contact lenses, surgical implants (already used in surgery), cough syrup, condoms, Timberland boots, perfumes, circuit breakers, automobile brake pads (made of sawdust and dried grass) and even scarier – spare parts for helicopters and aeroplanes.  

Counterfeiting is not a benign crime.  The guys behind the fakes are not nice.  I came across my first counterfeit factory employing child labor in distressing circumstances a few years ago but I have since seen countless examples.  Children are exploited by working in factories producing fakes, or peddling the goods on the street, and such situations have now been reported in Thailand, China, Brazil, and even the UK.  Gone are the mom and pop operations of yesterday where impoverished families constructed fakes in their garages:  they have been replaced by triads, cartels and Mafiosi.   More sinister -- terrorist organisations such as Al Quaeda, the IRA, Farc, Hezbollah and Hamas have fully latched onto the lucrative high reward-low risk nature of the counterfeit business. As Dr Magnus Ranstorp, an international terrorism expert, warns: “ Counterfeiting has become the third most important form of funding for terrorism today”.  For those who still think counterfeiting is merely a way of stiffing fat-cat companies and a “victimless crime”, pay attention to the words of Joseph Scott, a veteran New York investigator: “ … if you’ve ever bought a piece of counterfeit merchandise – watch, action toy, handbag, sweatshirt – you have supported organised crime, tolerated child abuse, committed larceny, and participated in a business that uses murder as a sales tool.”  The US Chamber of Commerce estimates that counterfeiting cost Americans $25 billion in lost tax revenues and contributed to a loss of 750,000 jobs in the US last year and even led to smaller companies going under.  Zippo, an American classic, was severely threatened when fake Zippo lighters flooded the market. 

The profile of this problem has to be raised. In March, EU President Barroso will open the Global Anti-Counterfeit Summit in Brussels under the banner “Fakes Cost More”:  an attempt to start a global awareness campaign.

Read full story here.