Chamber Calls for an End to Counterfeiting Loophole

WASHINGTON, D.C. – The United States Chamber of Commerce urged lawmakers to support legislation that would close a loophole allowing the sale of authentication components which are then added to counterfeit products that are sold to consumers.

"Closing this loophole provides law enforcement with an important new tool to protect copyright holders and to end a pervasive trend in global counterfeiting activity," said David Hirschmann, Chamber senior vice president. "Stand alone components have no intrinsic value other than to authenticate counterfeit products."

To deter counterfeiting, software companies and other product manufacturers increasingly use sophisticated authentication components, such as holograms, micro-printing, and special ink. Since the components cannot always be added to the actual product, they are bundled with, or placed on, the product packaging.

Consumers look for authentication features to protect themselves from counterfeit products. Legitimate authentication features are in high demand by counterfeiters. There has been a sharp increase in the theft of legitimate authentication features from factories that produce them and from shipment facilities that store and transport them.

"Lawmakers must ensure that federal laws keep pace with the growing sophistication of counterfeiting activities in this country," said Hirschmann. "Congress should increase anti-counterfeiting efforts, raise public awareness of the implications of counterfeit activities, and work with international allies to counter global intellectual property theft."

Trade in counterfeit goods accounts for 6–9 percent of all world trade and is sharply rising, according to some estimates. Intellectual property crimes drain an estimated $200-250 billion from the U.S. economy alone, resulting in the loss of hundreds of thousands of jobs each year. In addition to these economic harms, counterfeit sales help finance global organized crime activities and, in the case of pharmaceuticals and other consumer products, can jeopardize health and safety.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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