It is amazing why people are still risking their freedom to sell illegal drugs when you can sell fake products have little to no jail time. We all know the US has the highest incarceration rate in the world, mostly because of illegal drug dealing. That business is dangerous, whole federal agencies are dedicated to finding drugs, and most of the sellers end up dead or in prison. US or not. Even Pablo Escobar, the richest drug dealer in history got killed.
Our post last week showed the biggest counterfeit busts. If you read the stories, you will find the sellers of counterfeit items are only arrested and fined. If that. No mandatory sentencing, rehab, etc like drug dealing. European counterfeiting laws are way more relaxed then the US when it comes to this, and the US is relaxed itself. Take for example this study from the EU itself saying counterfeits are harmless and are good for the economy and companies. The only time the government enforces counterfeit laws is when it is money that is fake. It is debatable if counterfeiting a brand’s IP is a business issue, or a governments. In China for example, it is a national past time to counterfeit things, and the government views this as a business issue, and should be resolved by businesses in a civil court, not criminal.
I need to make a difference between counterfeiting a product, and infringing a companies trademark. The word counterfeit generically refers to both, but there is a major difference. Some counterfeiting can land you in prison. Making look a likes of pharmaceuticals, electronics(such as surge protectors), or anything that involves consumer safety can lead you to jail. Counterfeiting a product is not that big of a deal either if it does not harm the buyer. However infringing on a companies trademark is way less serious in the eye of the law. Take a famous movie, slap the dvd cover picture on a t shirt, or a phone case, and just like that you can sell a item very fast. Go to any internet store that allows 3rd party sellers, and you will see this everywhere. I know for sure that Sesame Street did not license the image of Elmo doing drugs to a shirt company. I saw those shirts back when I was in school and in YouTube videos. Head over to Google Images, and type any famous TV show or musician, and you will find their name, and face, and other trademarks are all over unlicensed merchandise. There are thousands of news stories online about someone using a brands trademark, gets caught, and is send a cease and desist letter, or has his merchandise seized, if that at all. I know many people personally that sold counterfeit products at some time in their lives. It is a easy way to make money, and is low risk.
Consider this post, where I discuss how a friend of mine a couple years ago made 2k in profit for only 5 hours of work selling fake Beats by Dre online.
Go to Europe, and you will have really no one stopping you from infringing.
The customs are also a lot easier to get through due to how the customs work for the EU bloc. You can read our blog post here about how counterfeiters exploit the weakness in the EU system. Once you import it to a single country, you can move it freely anywhere in the EU. So counterfeiters take advantage of this by using ports in countries where customs are understaffed. Under staffing is a huge problem in the EU, a result from austerity programs.
China, where drug dealing is a death sentence, and counterfeiting is a national past time.
If you were there, which would you choose for easy and fast money. China is the worlds manufacturer of fake goods, so if you live there, you can see how it is a great position. You have the whole world to sell to, the internet has made it easy, and there is no one stopping you in your own country. I remember a few years ago, a factory in China was manufacturing fake Nike and other sport shoes. After years of pressure and money, the shoe companies finally got the factory to shut down. What did the factory do next since the shutdown was like a slap on the wrist? They moved the factory 2 miles down the road. The companies now have to start all over to shut down this new place. Small fortunes and self employment is very common to the sellers and manufacturers of counterfeit goods in China. The Government will not seize your assets, and will generally leave you alone. So if you are living in China, selling fake goods seems like a good idea no matter what. Why would you drug deal there?
China law also states that law enforcement will not go after a counterfeiter until there is proof of profit. Something that is near impossible to prove. Every time Nike wanted to shut down a factory, they would have to bribe police.
Which would you choose, selling drugs, or selling counterfeit goods? Selling fake goods may not be as glamorous, but it is way safer, just as easy, and very low on the crime meter.