By  on November 12, 2007

LONG BEACH, Calif. — To better fight counterfeit imports into the U.S., partnerships between government agencies and industry are essential, said experts during a tour of the Container Examination Station in Carson, Calif., last week.

The visit was part of the American Apparel & Footwear Association's annual Knock It Off: Brands and the Counterfeiting Quandary conference. The dock visit was facilitated by U.S. Customs and Border Protection of the Department of Homeland Security.

"We can't be successful at stemming the tide of goods without the help of industry," said Kevin Weeks, director, field operations, Los Angeles.

Five million containers of goods entered the U.S. in the last full fiscal year through the Los Angeles-Long Beach port of entry. As a result, it is the busiest port in the U.S. As a comparison, Weeks said, the country's second-largest port in Newark processed one million containers during the same period. The port and Los Angeles International Airport collect revenues of more than $7 billion.

"We are very busy and we collect a lot of money," Weeks said. Additional challenges the port faces include quota circumvention, duty evasion and intellectual property rights. The bulk of goods that pass through the port come from China, he said.

Current training programs for customs officers to spot fakes offered by apparel companies are a good example of successful industry-agency partnerships. But more work can be done.

Footwear, for instance, represents the biggest intellectual property problem at the port, said Patti Dondero, supervisory import specialist for the footwear, handbag and luggage and toy team. Nike shoes in particular are seen frequently, she said.

The officers doing inspections look for patterns and trends to help them spot intellectual property violations, Dondero said. "I do reach out to trademark owners and talk to them. We keep in contact about shipping patterns, what to look for," she said.

Joanie Schoeny, supervisory customs border protection officer, who oversees the officers who conduct inspections, detailed some of the tactics used by counterfeit importers.

One case involved a counterfeiter shipping fake Louis Vuitton handbags that were sewn into a generic tote bag with no labels. What caught the inspecting officer's attention was how ugly the bag was, Schoeny said. When the linings of the pink and yellow totes were cut open, fake Vuittons were found inside.Officers said it is not unusual for counterfeiters to sew blank labels over trademarks or cover telltale marks in some way that can be undone upon arrival in the U.S.

Speakers throughout the Knock It Off conference, held the day after the CES tour, stressed the continued importance for brands of controlling their supply chain as counterfeiters develop increasingly sophisticated businesses and produce high-quality fakes. "A well-managed, centralized sourcing structure is key to preventing [gray market goods] and limiting fakes," said Ray Tai, assistant general counsel, Adidas. Tai oversees the company's intellectual property efforts in Asia.

The conference also focused on effective ways to work within China to target the source of counterfeit goods. Chinese customs is underutilized, Tai said. Registering trademarks in China and training customs officers there can be an effective tool, he said.

"Conventional wisdom is that you can't get anything done in China," said Kevin Brown, director of global brand protection for Nike. That is wrong, he said. A lot can be done in China, but companies need to approach it in the "Chinese way.

"Learn the system, be the system. 'Out system' the system," he told conference attendees. Apparel and shoe companies need to understand the legal system, as well as cultural patterns in that country. The structure of the legal system isn't drastically different from the U.S. once you understand which branch does what, he added.

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