Years ago when Jay Moon served as deputy director of the Mississippi Development Authority, he often accompanied Mississippi manufacturers on trade missions to foreign countries. These goods-makers would drop in on establishments there to check on how their products were being handled and marketed.
Many times manufacturers were shocked at what they found.
“Manufacturer would often see their products in places where they had never sold a single item,” Moon said.
In fact, these were not their products at all. They were counterfeits.
Now head of the Mississippi Manufacturers Association, Moon lists counterfeit goods as one of the biggest challenges facing the state’s manufacturers. And the problem is growing.
“The sale of counterfeit goods around the world represents a $250-billion loss to global and U.S. manufacturers,” Moon told the Mississippi Business Journal. He had no numbers for the losses specific to Mississippi manufacturers, but called them “significant.”
Thus, Moon, the manufacturing community and law enforcement welcomed the announcement last month that a new state law aimed at deterring the trafficking of counterfeit goods in Mississippi cleared the Legislature and was signed by Gov. Haley Barbour. The law’s aim is to give law enforcement new tools to fight the distribution of bogus goods in the state.
The anti-piracy law, which was authored by Rep. Edward Blackmon Jr., D-Madison, and pushed by Attorney General Jim Hood, makes dealing in counterfeit products a felony. The punishment can be as much as five years in prison and a fine of $10,000. Even if the goods’ value is less than $1,000, a perpetrator could face a year in jail.
In addition, the law provides for the seizure and forfeiture of property used in trademark and recordings violations, seizure and forfeiture proceedings, notice to lien holders and parties with security interests, the disposition of property and proceeds, the amendment of four sections of Mississippi Code of 1972 and related purposes.
The new law has garnered attention well outside the state.
“Mississippi lawmakers showed their dedication to protecting businesses and consumers by enacting this legislation,” said Alan C. Drewsen, executive director of New York-based International Trademark Association, in a statement. “The sale of counterfeit goods is a serious problem, and the cost to Mississippi businesses can hinder the state’s economic growth. The new bill provides stronger protection from this threat, and we congratulate the State of Mississippi on this important development.”
Chip Morrow, a partner in the law firm of Butler, Snow, O’Mara, Stevens & Cannada, PLLC, in Ridgeland, practices in the area of intellectual property. He said he is supportive of the new anti-counterfeit law, and said it has the potential to at least curtail the trafficking of bogus products in Mississippi.
However, Morrow said much of the criminal activity is overseas, and many of these perpetrators have no brick-and-mortar operation.
“So much of this is on the Internet,” Morrow said. “You get a website shut down, and they simply change a few letters in their domain name and continue to operate. It can be very difficult and frustrating.”
Moon said most of these bogus product operations are based in China. In order to earn most favored nation trade status, China agreed to clean out these criminal operations.
Moon said there has been progress, but the problem remains enormous.
“I think there has been progress (in China),” Moon said. “I have been there and personally seen some progress. Has there been 100 percent progress? No.” He added that the National Association of Manufacturers continues to constantly monitor the illegal trade coming out of China.
The new state law also targets pirated movies and CDs, which are common targets for scammers. Just this year, a Bay St. Louis man, Neil John Brimelow, was convicted of copyright infringement for reproducing and selling copies of the “Family Guy” television series.
Moon pointed out that there was more risk from bogus products than just lost revenue. Counterfeit products do not offer the same quality, posing a PR problem for manufacturers.
However, both he and Morrow said consumer safety is an even bigger issue. Counterfeit drugs are a prime example of the risk to domestic consumers.
Attempts to reach Hood for comment were unsuccessful at press time.
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