Counterfeiting occurs where there is deliberate copying of a product or the packaging, label or its trade-mark. It is the unauthorized use of a legitimate product's commercial presentation or any protected indication.
The crime of counterfeiting has expanded beyond the realm of printing false paper money. Present-day counterfeiters take everything from designer fashions to birth control pills to oil filters to tractor parts. Unlike printing money, the counterfeiting of consumer products may have personal detrimental effects and even cause fatalities.
Counterfeit goods from software to watches and novels to tennis shoes undermine trade and incentives to produce, reduce profits and leave customers with shoddy products. Copied auto and aircraft parts have been implicated in several fatal accidents, pseudo face creams have damaged skin, false birth control pills have resulted in unwanted pregnancies, counterfeit fertilizers and herbicides have lost farmers' crops, fake drugs can be relatively harmless or potentially lethal.
The number of trademarks at risk has increased considerably with the increase in the number trademarks registered, over 9 million in 1999 (nearly double the number in 1974).
Counterfeited products cost USA companies an estimated $20 billion in lost sales in 1984, compared with $3 billion lost in 1978. In 1986 it was estimated that the worldwide cost of counterfeit and theft of intellectual property was $23.8 billion, divided as follows: scientific and photographic goods (21%), computers and software (17), electronics (10), motor and vehicle parts (9), entertainment (8), pharmaceuticals (8), chemicals (6), and petroleum products (6). An alternative estimate puts the value of such fraudulent goods at between 3 and 5% of world trade, or between $90 and $150 billion per year costing 130,000 jobs in US and more than 100,000 jobs annually in European Community countries throughout the 1980s. It 1998 it was estimated that $2.1 billion was lost to trademark pirates in 1997.
Major brand names like McDonald's, Coca Cola, and IBM are so valuable that even approximations to their names, logos or advertising slogans can result in major profits for a counterfeiter and major losses for the original manufacturer.