NCPA - National Center for Policy Analysis

Using The Profit Motive To Stop Counterfeit Goods

December 30, 1998

Marc Barry, an activist who is out to get those who counterfeit expensive retail items such as Rolex watches and Gucci shoes, thinks he can motivate law-enforcement officers to join the chase by making it profitable for them.

Authorities seldom go after counterfeiters, Berry discovered in 1995, after he built a case against 54 wholesalers in Atlanta. Georgia had no state law against counterfeiting; the Federal Bureau of Investigation declined to investigate, citing a lack of interest from the U.S. Attorney; and U.S. Customs couldn't act -- since the items had been brought into the country in pieces, rather than as finished goods, and therefore were legal.

  • So Barry drafted a law which lets police departments pocket 70 percent of all the booty they confiscate and use it for official purposes.
  • He helped to get the law passed in three states that are reportedly hotbeds of bogus brands -- Georgia, Rhode Island and Texas.
  • Since the seizure bill became law in Rhode Island last year, the Providence police department has conducted 18 raids and netted $75,000.
  • In the Atlanta area, police have staged 20 seizures since mid-1997 -- up from none in 1996.

While an industry trade group, the International AntiCounterfeiting Coalition, estimates that cheap clones cost legitimate manufacturers about $200 billion a year, other experts put the cost at around $10 billion.

Source: Adam L. Penenberg, "Cops, Cash and Counterfeits," Forbes, December 28, 1998.

 

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