Not+Exactly+Counterfeit - - w - J 'EXACTLY 7 1 , A s:- $*...

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J ' EXACTLY 7 , A 1 -w- .'$&* s:- MOST BIG BRANDS DON'T WANT TO TALK ABOUT IT, BUT THERE'S A BUG IN THE OUTSOURCED ECONOME FOREIGN THEY'RE SUPPOSED TO, THEN SELL 7 CONTRACTORS MAKE MORE PRODUCTS THAN , ., EXCESS OUT THE BACK DOOR. NEWUCE FOUND OUT JUST HOW HARD IT CAN BE SHUT DOWN "THIRD SHIFT." BY RO.$RP PARLOFF " . GEE, COUNTERFEIT ARE GETTING SO REALISTIC! Doubtless you've heard some version ofthat comment in recent years. Well, they are getting more realistic, for two reasons. One you 1 know about, but one might not. a The prong of the problem-eve~ne understands is that technologi- '-q , cal adv-mces in printing, scanning, 3-D modeling, and so on have made copying through reverse-engineering easier cheaper than ever. And if ask any brand owner why counterfeits convincing these - days, that's the answer you'll get. -- 1 But there's another factor. Now that Western companies perva .+ -6ively outsourcing manufacture of their products to factories over- seas, they're entrusting their precious intellectual property-designs, holds, specifications, trade secrets-to hundreds contractors ~ubcont~actors --- all over ?-- -I the world. - 3-aFORTUNEMayf,2006 . PHOTOORAPI~SWDAV~ AND STARE J$-c
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It's extredy hard to police global supply chains, and IP is leak- ing out tbmugb 1,000 cracks. The simpkt ad most dramatic form of the problem is some- thing that Asia-based hestigatore jocularly refer to as the "third shifl,' the "midnight shtft," or "ghost shift." Say a U.S. com- pay orders 20,000 dresses fmm an-worseas factory. The con- tractor Eills the order dqipgjts iwo day && but hen runs off 10,000 extra at night, passib& using inferior materials, Thosa be sells out the back door, so tospeak, trademark and all. In t& case of apparel, says Vinmit Wpi, the M PICA, a braad- protection firm, third-strift products m;ry "sub&&& tinguishablt, down to same3 hd cow" Ddel C.K Chow, an IF- professor at Obio State Univer- sity, recalls his own former em- a mul- consumer- brands company he declines to aame, bavbg a tbitd-shift prob- lem at a factory in China that producespackaging labels. The mhctor 'Wuld sell the night sbiA counterfeiters," says Chow. uYou'd wind up discwering a
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Not+Exactly+Counterfeit - - w - J 'EXACTLY 7 1 , A s:- $*...

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