The Problem of Counterfeits


Apple has filed a lawsuit against a company called Mobile Star, LLC. Ordinarily, a lawsuit filed by a silicon valley company would be about the furthest thing possible from “news,” but this time Apple has the right of it.

Mobile Star was selling 5W USB Power Adapters and Lightning to USB cables on Amazon as genuine Apple products. They had Apple logos, came in Apple boxes and looked exactly like the real thing.

They weren’t; they were counterfeit. The results?

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Apple made blind purchases of a number of Amazon’s Mobile Star offerings and found that almost 90% of Mobile Star LLC’s chargers and cables were counterfeit. They are knock-offs, tagged with Apple labels and logos, but fake.  In response to a demand by Apple, Mobile Star’s selling privileges on Amazon were revoked.

Apple has filed a lawsuit against Mobile Star, seeking damages for copyright and trademark infringement and asking for an injunction to stop Mobile Star from constructing these dangerous knock-offs. WC applauds Apple’s efforts. Underwriters Laboratories – UL – tested these counterfeits and found they “were so poorly designed and constructed that they posed a risk of lethal electrocution to the user.” Sure, Apple is protecting itself and its brand, too. Apple isn’t and never has been selfless. It’s a corporation.

But the problem is larger than a single manufacturer and it is much more difficult for a manufacturer to control. The problem is with the end-seller, who uncritically accepts as genuine stuff that isn’t. We’re talking Amazon here.

Amazon does not require vendors to prove the authenticity of trademarked goods before accepting those goods for sale to its customers. Instead, Amazon acts if and only if a manufacturer complains. Only if a manufacturer complains does Amazon contact its vendor and require them to prove authenticity. So, in response to Apple’s complaint to Amazon, Amazon told Mobile Star it had to provide Amazon with:

• Copies of invoices or receipts from your supplier issued in the last 180 days. These should reflect your sales volume during that time.
• Contact information for your supplier, including name, phone number, address, and website.

The obvious question is why Amazon allows any vendor to market goods on Amazon without first providing this kind of basic information. If someone were injured or killed by one of these counterfeit products, Amazon, like Mobile Star, would face a personal injury lawsuit. Amazon, even more than Apple, has a business reputation to protect.

In particular, Amazon’s third party provider program, where you order through Amazon but fulfillment is by some outfit you’ve never heard of, is an invitation to this kind of conduct. Even the Wall Street Journal warned Amazon of this risk.

Some will say it would be burdensome for Amazon to have to perform due diligence. In the long term – even in the middle term – selling dangerous counterfeit goods will be even more burdensome. Some will say authenticating documents, like those Amazon is belatedly demanding of Mobile Star, can be forged and counterfeited as well. Certainly, no reasonable due diligence is going to be perfect. Quality control is an imperfect art.

But Amazon and other vendors could at least try. Right now, they aren’t. Be warned.

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