Pitfalls of Buying Counterfeit Items

Counterfeit items continue to be a problem for travelers and U.S. Customs. Such goods may be confiscated by customs with little chance of getting them back, even if you purchased them in good faith.

No fine is levied; losing your merchandise is regarded as enough penalty.

Customs has different rules covering counterfeit items protected by trademark or copyright, and genuine merchandise that is still protected by trademark laws.

Be aware of which products are likely to be counterfeit. Copyrighted goods include records, cassettes, personal computers and video games. Robot toys are one of the hot items now. Trademark-protected items include designer jeans and other apparel, luggage, leather goods and watches.

“There’s been an upswing in such counterfeit items as Louis Vuitton handbags and luggage, Gucci accessories, designer jeans and polo shirts,” said Bernard Questel, a senior customs inspector in Los Angeles. “We’re also getting a lot of counterfeit jogging outfits and sweat shirts with designer labels from the Philippines.”

Types of Protection

A product might have both trademark and copyright protection, or just one. To illustrate, a personal computer might not have the manufacturer’s trademark but might still contain copyrighted material in its ROM (Read Only Memory).

There is also a possible health factor. Customs has seized counterfeit designer jeans made with carcinogenic dyes. “Travelers should also watch out for counterfeit Cabbage Patch dolls,” Questel said. “We’re still getting some from the Far East which have a kerosene-like odor, which isn’t very healthy for children.”

You should evaluate the nation and outlet where you are pondering a purchase. Don’t expect to find legitimate name products at flea markets or street vendors. Buy from reputable stores, which stand behind the products they sell and where you might get your money back if the item is found to be counterfeit.

Most counterfeit items coming through LAX are from the Far East.

Consider the price carefully. If a bargain looks too good to be true, chances are it’s no bargain. However, sellers have been known to raise their prices for counterfeit items to attract the consumer who operates on the premise that “you get what you pay for.”

Buying Counterfeits

“Perhaps 99% of travelers knowingly buy counterfeit watches and designer goods,” said Jack Fox, head of a Los Angeles-based intelligence firm serving U.S. corporations. “Because of the unrealistically low prices of some items, they have to be aware that the goods can’t possibly be legitimate.”

Jeffrey Sheldon, a Pasadena-based attorney specializing in patent, trademark and copyright law, said: “As a general rule of thumb, many domestic stores will mark a price up 100%, so if you find another outlet selling an item for less than half of what major stores are selling it, be wary.”

But, Sheldon noted, markups are likely to be less in countries where labor is inexpensive, such as in the Far East, so the difference in price between outlets can be less. “Basically, there’s less room for the individual entrepreneur in these countries to mark down products,” said Sheldon.

Check the packaging of products carefully, Sheldon advised. “As packaging is costly, this is one area where counterfeiters may cut corners. As legitimate manufacturers generally sell items with packaging, its absence can be a giveaway.”

If an item just looks like a name product, but doesn’t carry its name or logo, there may be no problem bringing it back to the United States. But if offered as a brand item, it should bear such a logo.

Fake Copyright Labels

However, counterfeiters may deceive you in this aspect as well. “Counterfeiters are putting fake copyright labels on goods, which makes it very difficult for travelers to spot false items,” Questel said.

Be on the lookout for misspelled logos, poorly attached labels or even upside-down labels.

Examine products for such aspects as unfinished areas, ill-fitting parts or any signs of shoddy work or inferior quality.

See if the outlet is selling a full line of a certain product or product area. “Some entrepreneurs will just sell hot items, and they won’t have other items in that line or accessories,” Sheldon said.

Make sure the item works before you leave the store. Check that the serial numbers on the product match those on any warranty card.

Travelers should also be cautious about goods bought in domestic gray markets, Sheldon said. “There isn’t anything basically illegal about a gray-market goods, and you get what you think you’re buying. The goods aren’t counterfeit, but you can have a problem with warranties and with liability if the product damages you or anyone else through a defect.”

Import Limitations

Problems can also occur with genuine merchandise purchased overseas. U.S. trademark owners can specify the amount of their products a traveler can bring back on any one trip. If there is a limitation on importing an item, it may be detained by customs.

“For example,” Questel said, “travelers are only permitted to bring in two Rolex watches per person per trip.”

Generally, at LAX the chances are good that you would be permitted to keep a genuine item as long as it is for personal use and not for resale.

If the item is detained, it’s up to the traveler to contact the trademark owner and request permission for customs to release it. You would have to present such permission in writing on the manufacturer’s letterhead to customs within 10 days to initiate reclaiming.

If merchandise you purchased is considered counterfeit, you might be allowed to bring in one such item under trademark protection. But if the product has copyright protection, expect to leave it behind.

Personal Computers

“Many travelers come back with personal computers and assume that since it’s for their personal use, they have no problems,” Questel said. “But there are some computers, such as Apple, where we have to hold the computer to see if there is a copyright infringement. These computers are sent to Terminal Island and then we advise the traveler accordingly.”

If there is a problem with a counterfeit item, you can voluntarily give up the goods, in which case the merchandise is destroyed. Or you can demur, and the item is seized. If seized items are subject to trademark protection, customs must contact the trademark owner who has 30 days to say if the item can be returned to you. Without such approval the product would probably be destroyed.

It’s a good idea to contact customs locally before you leave on a trip, particularly if you plan to buy items that you think might be protected by copyright or trademark. Call (213) 548-2461 with any questions or write to U.S. Customs, 300 S. Ferry St., Terminal Island 90731.

Free brochures, including “Trademark Information For Travelers” and “Know Before You Go,” are available at the Terminal Island office and at the customs booth in Bradley Terminal at LAX.

A source of information overseas is the U.S. Embassy or Consulate.