Customs stopped checking out counterfit ICs?

[Jon Kirwan]

So... US customs simply stopped checking out imported parts
because they were afraid of law suits?

See 2nd to last paragraph in:
http://www.mercurynews.com/breaking-news/ci_15990184?nclick_check=1

Customs used to ask legitimate chipmakers to help it
check out suspected parts. But it stopped that two
years ago, fearing it could be prosecuted for revealing
confidential information about the seller of the parts
to another company. Since then, the association noted,
there has been a "dramatic decrease" in fake-chip
seizures.

....

Part of what I'm curious about is why there wasn't enough
interest by the manufacturers themselves to work out a
suitable approach; why it was that US customs feared a law
suit, in the first place, over issues they saw related to
their prior practice... a worry about which I assume the
industry wasn't completely ignorant of; what credible threat
was actually made, at some point, and by whom. Etc.

Why did things degrade to the point where the US customs felt
they could no longer do this job anymore?

It seems clear that the problem is on the rise, after this
change in policy and practice. Why was it so impossible to
deal with various concerns here?

It doesn't make sense to me.

Jon

 

[Jon Kirwan]

It would be interesting to see a technical analysis of the defects in
the counterfeits. They must be close in form and function to the
targeted parts or they wouldn't get past the first factory day (am I
naive to assume that companies still test their products?). Are they
just faking the packaging and logos? Faking the test documentation?

On the source side, it is likely to be many different things,
from what I read before. Some of the counterfitting is about
taking cheaper (lower grade) parts and remarking them as
better. For example, perhaps buying cheaper +/-2% Vref parts
and marking them and selling them as +/-0.5% Vref parts. Some
are just dead parts -- I recently saw a case of CPUs that
simply weren't. The best they could be used for is jewelry,
I suppose. And very probably there are even more complex
situations, where perhaps 1/2 of a lot is tainted ... or 10%
of it... or 90% of it... but not all of it. Whatever works
to catch a few more people unaware.

On the receiver side, there are several kinds. There are end
users and there are distributers, like Digikey. Also
stuffing houses. Not everyone validates every shipment and
the interests in doing so vary from shipment receiver to
receiver, anyway. Some get caught unawares because the new
stock doesn't get used until the older stock is used up. Some
find out very soon because they test a few parts right away
upon receiving them. Some find out when they receive and
then test a stuffed board.

It would be interesting to know what the breakdown is and
what is the bigger problems, I suppose. But even knowing
that and working to address the problem areas directly also
means that the counterfitters will then have more
information, too, and will shift their practices to target
areas that aren't getting as much attention. It's going to
be a game, of sorts.

My curiosity is about why it was the case that US customs,
working together with concerned manufacturers (and I have to
believe that legitimate manufacturers _do_ care), failed so
utterly and completely to be able to work out a system that
would meet various legitimate interests and ultimately had to
simply stop doing anything. There must have been _credible_
legal threats in the air in order to force that change and
those making the credible threats must not have been
sufficiently interested in finding an accommodation, for
reasons I have a hard time figuring out.

It would seem to me to be both in the interests of legitimate
outside-the-US manufacturers, as well as inside-the-US
distribution and manufacturers and various electronics
engineers (and on down the line to end users of the final
products), to work out a reasoned approach. It is hard to
imagine why negotiations couldn't arrive at a workable answer
and instead the only answer became a complete breakdown with
nothing left in place to help curb the problem.

Jon

 

[Ecnerwal]

There must have been _credible_
legal threats in the air in order to force that change and
those making the credible threats must not have been
sufficiently interested in finding an accommodation, for
reasons I have a hard time figuring out.

You're making a big mistake in the "taking them at their word"
department, I think. Legal threats (the vaguer, the better) make a fine
red herring when the real reason is perhaps much simpler - any of the
following seem possible:

A: simply that they didn't want to be bothered (time, manpower/etc. wise)

B: are concentrating more on "homeland security" than "giving a #@$&
what fake crap is being shipped in" - looking for bomb materials etc.
and not wanting to look for chips that look like other chips but are not.

C: were not getting enough in fines and fees to make it worth their while

D: were offered too much in paper bags and offshore accounts for it to
be worth their while continuing, since counterfeiting is a nice high
profit business.

 

[Jon Kirwan]

You're making a big mistake in the "taking them at their word"
department, I think. Legal threats (the vaguer, the better) make a fine
red herring when the real reason is perhaps much simpler - any of the
following seem possible:

A: simply that they didn't want to be bothered (time, manpower/etc. wise)

Not very believable, in this case.

B: are concentrating more on "homeland security" than "giving a #@$&
what fake crap is being shipped in" - looking for bomb materials etc.
and not wanting to look for chips that look like other chips but are not.

I don't know how they were doing the checking before. The
article mentioned enough to suggest that the process involved
manufacturers and that the problem seemed to be nothing like
what you are suggesting, reading the article closely.
Besides, they appear to have been doing a successful job of
it until they stopped doing it in 2008. Which is well after
the peak of post 9/11 homeland security activities in the US.

No, I don't think that's believable, either.

C: were not getting enough in fines and fees to make it worth their while

Not a convincing theory to me, in this case.

D: were offered too much in paper bags and offshore accounts for it to
be worth their while continuing, since counterfeiting is a nice high
profit business.

Okay. I think we stop here.

I'll keep wondering, for now.

Jon

 

[[email protected]]

His brain, which probably was the second thing to go, forgot that the
genius George Dubya Bush pushed for most favored nation status for
China. Oh, let me toss in Mexican truck drivers while I at it. I can't
believe how two guys, Bush and Cheney, could so hate the people of the
United States.

Gee, I didn't know Bush was President in 1996. Maybe he likes cigars, too.
Idiot.

 

[Nobody]

So... US customs simply stopped checking out imported parts
because they were afraid of law suits?

One possibility is that the manufacturers overreached, calling
"counterfeit" on genuine parts being traded through non-approved channels
or even just competing work-alike parts.

I have no idea whether that's at work here, but there are plenty of cases
of law enforcement getting involved in "IP infringement" cases where the
infringement was dubious if not entirely absent.

 

[[email protected]]

One possibility is that the manufacturers overreached, calling
"counterfeit" on genuine parts being traded through non-approved channels
or even just competing work-alike parts.

No, unless the parts have the manufacturer's markings on them they wouldn't be
considered counterfeit, by anyone. If they do (and have not been sold into
the channels by the manufacturer), they are, no matter how well they might
work. Simple.

I have no idea whether that's at work here, but there are plenty of cases
of law enforcement getting involved in "IP infringement" cases where the
infringement was dubious if not entirely absent.

So, even you admit that you have no clue what you're talking about. Amazing.

 

[Nobody]

No, unless the parts have the manufacturer's markings on them they wouldn't be
considered counterfeit, by anyone. If they do (and have not been sold into
the channels by the manufacturer), they are, no matter how well they might
work. Simple.

They may not be "counterfeit" by any reasonable definition of the term,
but "IP holders" don't seem to be constrained by such definitions.

The term "counterfeit" is regularly used to describe products which are
obviously not legitimate copies, e.g. CDs and DVDs made on recordable
media. This usage even extends to the proposed "Anti-Counterfeiting Trade
Agreement" (ACTA), which has little do with counterfeiting, and is
primarily related to copyright.

So, even you admit that you have no clue what you're talking about. Amazing.

I very much doubt that anyone in this thread actually *knows* the reasons
behind customs' decision.

 

[[email protected]]

They may not be "counterfeit" by any reasonable definition of the term,
but "IP holders" don't seem to be constrained by such definitions.

Customs is, or is supposed to be.

The term "counterfeit" is regularly used to describe products which are
obviously not legitimate copies, e.g. CDs and DVDs made on recordable
media. This usage even extends to the proposed "Anti-Counterfeiting Trade
Agreement" (ACTA), which has little do with counterfeiting, and is
primarily related to copyright.

Read what I said above.

I very much doubt that anyone in this thread actually *knows* the reasons
behind customs' decision.

Yet you're pulling shit out of your ass and flinging it anyway.

 

[Spehro Pefhany]

Sounds interesting. Do you have some cases in mind you can reference?

Duracell batteries- gray market imports of genuine Duracell batteries
from their Belgian plant were undercutting batteries sold through the
US distribution chain, so they tried to stop them by claiming some
kind of IP infringement IIRC.


Best regards,
Spehro Pefhany

 

[Spehro Pefhany]

You do realize there is a difference between temporary most favored
nation and permanent most favored nation.

Almost every nation is "most favored" which is why they've stopped
useing that term. It's now "Normal trade relations". The exceptions
can be counted on a few fingers.

 

[Nobody]

Customs is, or is supposed to be.

In which case, if they're going to involve manufacturers in decisions as
to whether or not products are "counterfeit" (which is what the article
was about), they shouldn't automatically treat such claims as gospel.

Otherwise, the manufacturer gets to make overreaching claims of
infringement while the public picks up the tab for any liability arising
from improper seizures.

While customs may be entitled to a fair amount of discretion, basing
decisions on information from an interested party is likely to be
problematic.

 

[[email protected]]

In which case, if they're going to involve manufacturers in decisions as
to whether or not products are "counterfeit" (which is what the article
was about), they shouldn't automatically treat such claims as gospel.

So you think that Customs should he the judge and jury?

Otherwise, the manufacturer gets to make overreaching claims of
infringement while the public picks up the tab for any liability arising
from improper seizures.

While customs may be entitled to a fair amount of discretion, basing
decisions on information from an interested party is likely to be
problematic.

So you thin that Customs should work in a vacuum, with no input from the IP
owner (or licensee)?

 

[[email protected]]

I'm the proud recipient of a DMCA takedown order from Apple, claiming that a
used cell phone I was selling on eBay was "counterfeit." The auction's title
didn't contain anything suggesting "Apple," "iPhone," or similar, and the
actually talked about how, while the styling was similar to that of a
mini-iPhone, the performance was nowhere near as good, with the touch screen
being awful and the software being clunky.

In other words, it made it very, very clear that it was anything BUT an
iPhone. (It's a CECT KA08 phone, for the curious.) It's absurd to suggest
that anyone would think this was somehow an actual Apple product.

I'm mulling over whether or not I want to up the ante and send Apple a counter
notice -- at that point they're required to either rescind their orignial
notice, or else sue me.

Go for it. Then counter for restraint, Sherman, libel, and a bad hair day.

(I'm giving them a week to respond in the interim...)

Should be fun...

You think they're going to respond without motivation?

 

[JosephKK]

Not very believable, in this case.

You are way too trusting of government.

I don't know how they were doing the checking before. The
article mentioned enough to suggest that the process involved
manufacturers and that the problem seemed to be nothing like
what you are suggesting, reading the article closely.
Besides, they appear to have been doing a successful job of
it until they stopped doing it in 2008. Which is well after
the peak of post 9/11 homeland security activities in the US.

Security show is far more inportant to the politicians than real
security.

No, I don't think that's believable, either.


Not a convincing theory to me, in this case.

When the military is getting bilked, it changes the issues, think it
through.

Okay. I think we stop here.

Yes, America is becomming as publucly corrupt as African nations.

 

[JosephKK]

I don't have citations for specific cases.

One area where dubious claims of trademark infringement are particularly
common is fashion (clothing, accessories, cosmetics, perfume), where the
brand owners seem to habitually claim that any unauthorised resale is
trademark infringement.

Is there nobody else here that remembers some threads within the past
year about some regulars here getting burned by counterfeit power
transistors?

 

[Charlie E.]

In which case, if they're going to involve manufacturers in decisions as
to whether or not products are "counterfeit" (which is what the article
was about), they shouldn't automatically treat such claims as gospel.

Otherwise, the manufacturer gets to make overreaching claims of
infringement while the public picks up the tab for any liability arising
from improper seizures.

While customs may be entitled to a fair amount of discretion, basing
decisions on information from an interested party is likely to be
problematic.

Or, the case a guy I met told me of...

Major Cel Phone Company contracted with chinese plant to build 500K
cel phones, and told him (chip manufacturer rep) to expect order for
500K parts.

Order comes in for 1M parts! he checks with chinese rep, No, no
mistake, they need 1M parts.

Factory was going to go ahead and build 1M units, and sell the extras
themselves. Whether they were for 'domestic' consumption, or export
as 'counterfit' he didn't know!

Charlie

 

[Nobody]

So you think that Customs should he the judge and jury?

There's a difference between obtaining input on a decision and simply
letting another party take the decision for you; particularly when
there's reason to believe that they may have an "aspirational"
interpretation of their legal rights.

 

[[email protected]]

There's a difference between obtaining input on a decision and simply
letting another party take the decision for you; particularly when
there's reason to believe that they may have an "aspirational"
interpretation of their legal rights.

SO you think the government should have the expertise to know a fake IC from a
real one? You think the bureaucrat should be the judge and jury?

 

[[email protected]]

They sent me back a boilerplate response today. I sent them a polite
response... perhaps I can get to someone who can actually think there...

One sentence in the boilerplate did make me think: "Please be advised that
eBay was notified because the item in question was identified as containing
counterfeits and/or infringements of Apple's federally-registered trademarks
and/or copyrights, based on the photographs and description you provided.
These trademarks include, among others, the Apple logo, home screen icons and
the home button." -- The phone in question is made to *look* roughly like an
iPhone (see, e.g., http://ka08phonereview.com/ ), so I'm beginning to think
that Apple maintains *any and all* CECT band, model KA08 phones infringe on
their trademarks by virtue of the home button and icons looking similar... and
they just haven't gotten around to sending out takedown notices to every web
site with a picture of one?

That's a good point, and one probably wide enough to not invite a suit. ;-)