Canal Street in Chinatown, the center of the Manhattan trade in knockoff luxury goods, has changed since Sept. 11. Fewer tourists roam the area. The already crowded storefront displays have made room for overpriced American flags and photographs of the World Trade Center.
But what bothers Vance Lommen is how Canal Street remains the same: wedged next to the flags are dozens of styles of Oakley sunglasses, all of them fakes. In autumn, sales of counterfeit sunglasses usually start to slow, but this year stores are selling fake Oakleys briskly, and with more impunity than ever.
It was not supposed to be this way.
Lommen, the security director at Oakley, has worked diligently with US Customs Service officials, training them to spot fakes. He has cultivated police departments around the country, trying to educate them about the importance of enforcing trademark violations. He has hired private investigators to develop leads.
But the Sept. 11 attacks have led the police to focus on preventing terrorism, not trademark infringement. Customs officers are trying to stop explosives from entering the country, not fake sunglasses. And even private investigators, busy bolstering corporate security, have more work than they can handle.
The cost of counterfeiting
Oakley's troubles on Canal Street are emblematic of what is happening to companies in other parts of the country. Some American manufacturers are worried that as the US turns its attention to fighting terrorism, counterfeiting will be virtually unchecked and may expand.
Counterfeiting and product piracy are major headaches for manufacturers of products ranging from detergent to watches, and computer software to jeans. The International Anticounterfeiting Coalition, a manufacturers' organization based in Washington, has estimated that counterfeiting costs the American economy US$200 billion a year and erodes consumer confidence in the quality of the real products.
Although manufacturers acknowledge that preventing terrorism must come before fighting counterfeiting and piracy, some trade groups that have led the fight worry that their work has been dealt a setback.
High profit, low risk
"Clearly we have had agents who have done criminal intellectual property investigations, and their attention has been diverted," said Tim Trainer, president of the coalition.
Some experts in intellectual trademark enforcement contend that the battles against counterfeiting and terrorism may not be as distinct as they seem. Roslyn Mazer, associate deputy attorney general in the Clinton administration, said that there were criminal organizations, including those of terrorists, that used counterfeit goods to finance their activities. That means that the effort to cut off the money flow to terrorists could include fighting counterfeiting.
"It's natural for them because of the high profits and low risks," she said. "The commitment to combating counterfeiting has not been serious until recently, but the events of Sept. 11 are a challenge to us to strengthen those efforts."
Oakley, a publicly traded company based in Foothill Ranch, California, has been a leader at fighting counterfeiting. So far this year, 304 people have been arrested on accusations of selling fake Oakleys, and 363,651 pairs of sunglasses have been seized in the US, according to the company. Outside the US, 85 people have been arrested and 261,045 pairs of sunglasses seized. By comparison, Oakley made 4.9 million pairs of sunglasses last year.
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