Category Archives: Blogs

Counterfeit Makeup Had Bacteria and Human and Animal Feces

LAPD recently raided 21 businesses and seized an estimated $700,000 worth of counterfeit cosmetics. Six of the owners were arrested while the rest received cease-and-desist orders. An analysis showed the fakes had bacteria and human and animal feces.
The bust in Santee Alley netted makeup similar to such popular brands as Urban Decay, NARS, MAC, Kylie Cosmetics by Kylie Jenner, and others. The products look almost identical to high-quality eyeshadow, lipstick, and mascara but, authorities say, their prices should have raised eyebrows. Police were tipped off after consumers complained of skin rashes.

Will the 2018 Special 301 Report result in $30 Billion in Trade Sanctions against China?

It’s possible . . .

In Friday’s Wall Street Journal (3/16 page A6) there’s an article that quotes a White House official and other sources that hint that $30 billion in tariffs and trade sanctions may be imposed on Chinese imports in an effort to end Chinese requirements that U.S. companies doing business transfer technology to Chinese firms. [China has been long been cited as a notorious pirate of trade secrets.]
This article followed an interview on Sunday’s Fox Business Network with Trade Council Director Peter Navarro [sometimes referred to as the ‘trade czar’] who said action on China’s intellectual property theft would come soon. He referenced a plan the United States Trade Representative Robert Lighthizer will be releasing shortly to address the issue head on.

What could trigger everything is the Special 301 Report that is expected to be released by the USTR. This is published in late February or March and it is prepared by reports submitted by U.S. business concerning problems involving intellectual property. It should be published the last week in March and would likely trigger the Section 301 investigation that was initiated by the USTR August, 2017, especially if China is identified as a Priority Foreign Country List. A list of tariffs and trade sanctions would be drawn up to be imposed if China does not meet U.S. demands. China would retaliate with a list of its own and the result would be a trade war similar to what happened in 1994.

Will history repeat itself?

I wrote a chapter on the 1994-1996 trade dispute with China in my book Trademark Counterfeiting, Product Piracy, and the Billion Dollar Threat to the U.S. Economy (1999, 2001 Praeger). It’s a great resource to read if a trade war erupts between the U.S. and China

Rise in Counterfeit Xanax

Counterfeit Xanax, often laced with fentanyl, is becoming a huge problem in the United States and in the United Kingdom.
The counterfeits are sold as a recreational drug on the streets and over the Internet after being interlaced with the powerful opiod fentanyl. Xanax, a minor tranquilizer used to treat anxiety disorders, is one of most prescribed medicines in the United States. However, Xanax is rarely prescribed in the United Kingdom—but its recreational use has made it a growing threat (see video). It is also a growing problem with students in the United States who use the drug for recreational purposes.

On the street, counterfeit Xanax goes by several names: Xanies, zany bars, footballs, Christmas trees, and blue devils.

Christian Louboutin’s red sole trademark could be invalid

At the center of the legal argument is whether or not “shape” includes color. If it does, Christian Louboutin well known red sole trademark can be ruled invalid.
The French designer, Louboutin, is currently in a court battle in the Netherlands to stop the Dutch chain, Van Haren, from selling copycat cat versions of his shoes. The case dates back to 2012 when Van Haren introduced a new line which included high-heeled shoes with red soles.
Louboutin argued that the shoes infringed his brand’s trademark. The District Court in The Hague agreed and ordered Van Haren to stop producing its black and blue shoes with red soles. But Van Haren appealed against that decision and in 2014 the case was referred to the ECJ for “clarification”.
Last week the Court’s advocate general, Maciej Szpunar, said that the color red could not be considered apart from the shape of the sole, with shapes not usually protected under EU trade mark law. Such an opinion is likely to be highly influential on judges’ decision, which has yet to be made.

Video on the Counterfeiting Problem

Counterfeiting is a massive problem that ranges from high end goods to low-end products; Manila Chan and Bart Chilton discuss this global threat with Lara Miller from the IACC. GE could be broken up as it struggles with money problems; Ashlee Banks has the details. Jeffrey Tucker talks Bitcoin and Natasha Sweatte talks about the economic impact of mudslides.
[The IACC report starts about 5 minutes into the video]

The 2017 Notorious Markets List

2017 Notorious Markets List 1.11.18
The Office of the United States Trade Representative (USTR) published the 2017 List of Notorious Markets. This was the first review under the Trump Administration. The List identifies physical and online marketplaces believed to facilitate the sale of pirated goods.

Two of the most interesting selections were the PirateBay and Alibaba’s Taobao.

Pirate Bay is of symbolic importance as one of the longest-running and most vocal torrent sites of illegal downloads of movies, television, music, and other copyrighted content.

Alibaba blamed politics for Taobao’s listing and cited its impressive anti-counterfeiting record, which was cited in the USTR’s report. The USTR acknowledged that Alibaba has taken steps to improve the situation, but it noted that “important unresolved concerns remained.” Taobao was reinstated on the list under the Obaba administration a year ago.

Canadian Pharmacy Storefronts Operating in Florida

The USDA’s Office of Criminal Investigations raided 9 storefronts in Florida in early December that helped customers, mostly senior citizens, purchase prescription drugs from unlicensed online sources. Search warrants allowed agents to access computers, paperwork about foreign drugs sales and any drugs.

Although none of the stores were closed, FDA-OCI warned store owners that importing drugs from foreign countries is illegal and that helping to “administer” such medicines puts them in danger of being fined or receiving a jail sentence.

Sentenced for distribution of Counterfeit Human Growth Hormone (HGH)

George Patino, 57, of Houston, Texas, was convicted by a jury on Oct. 18th for conspiracy in the distribution of Human Growth Hormone (“HGH”) for unauthorized medical purposes, and smuggling. [Note: Counterfeit medicine is fake medicine that includes a wide spectrum including misbranded, contaminated, mislabeled, misbranded, unauthorized, and other fraudulent use or misrepresentation.]

Under federal law, doctors can lawfully prescribe HGH for several narrow medical uses, for example to patients with wasting diseases associated with AIDS or Prader-Willi syndrome. HGH cannot be prescribed to help patients with body-building, anti-aging, or weight loss treatments. From April 2014 through June 2015, the evidence showed at trial that Mr. Patino sent numerous packages of HGH to a local St. Louis, Missouri doctor and many local patients.

The HGH smuggled by Mr. Patino was misbranded in that the drugs’ dosage and use instructions were in Spanish not English, and the drugs came from a Korean drug manufacturer that had not been approved by the U.S. Government to sell this drug in the United States.

Mr. Patino now faces a maximum penalty of five years in prison for his conspiracy conviction, ten years in prison for his HGH distribution conviction, and twenty years in prison for the smuggling conviction, and/or fines up to $250,000 for each count. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

“For drugs that enter the U.S. from outside the FDA-regulated distribution system, there is no guarantee that the drugs are safe and effective for patients to use,” said Special Agent in Charge, Spencer Morrison, FDA Office of Criminal Investigations’ Kansas City Field Office. “We will continue to work to protect the health of patients who rely on prescription drugs and to ensure the safety and effectiveness of those drugs.”

Patient Rick Roberts Describes The Effects Of Counterfeit HGH Medication He Received From An Unscrupulous Drug Supplier.

10th Annual Operation Pangea Targets Hundreds of Fake Pharmacies

The tenth annual Operation Pangea, an international week-long action organized by Interpol to tackle the sale of counterfeit and illicit medicines online, targeted hundreds of fake pharmacies. 197 police, customs and health regulatory authorities from a record 123 countries were involved. A record number of 25 million illicit and counterfeit medicines were seized worldwide. The action resulted in the launch of 1,058 investigations, 3,584 websites taken offline and the suspension of more than 3,000 online advertisizements for illicit pharmaceuticals. There were 400 arrests worldwide and the seizure of more than $51 million worth of potentially dangerous medicines.

Among the websites taken down was GlavMed, which used infected computers to send pharmaceutical spam directed to so-called “Canadian” pharmacies, and was selling oral chloramphenicol, a drug that was pulled from the U.S. market due to serious and potentially life-threatening side effects.

As part of Operation Pangea, the FDA and other federal agencies worked together at the International Mail Facilities in Chicago, Miami and New York to detain 500 packages of suspected illicit pharmaceuticals. Commissioner Gottlieb said that the FDA has “recently tripled the staff we have in the IMFs to improve our ability to inspect packages that are suspected of containing illegal drugs.”