Faking a Company

gambit3 writes "What happens when pirating a movie, an application, or a game is not enough for you? Well, you take the next step and pirate a whole company. It happened to Japanese electronics giant NEC. Counterfeiters had set up what amounted to a parallel NEC brand with links to a network of more than 50 electronics factories in China, Hong Kong and Taiwan."

Comments

Wow, that is so cool

[Oldsmobile]

All I can say is, wow, that is incredibly cool! What moxy! What an idea!

These guys should get a criminal Nobel or something!

Re:Wow, that is so cool

[Fleetie]

It is pretty cool.

Such audacity and such a lot of effort!

Re:Wow, that is so cool

[sendtwogrey]

Common business practice see ' 'RedBerry'' for China's a recent example fair trade Policies.

Re:Wow, that is so cool

[squiggleslash]

You may feel that's the case. I'm baffled by it, to be honest.

There are a lot of "counterfieting" operations where the work involved makes you wonder why they didn't go legit. People selling "fake" iPod Shuffles, for instance, that actually work, they're just not real shuffles. Someone's taken the time and trouble to organize the manufacturing of this item, including a certain amount of R&D, for a working product. And then they proceed to spoil the entire enterprise by putting someone's else's name on it, meaning:

- they can't sell via legitimate distributors
- they can't get funding except from organized crime.
- they have to do business constantly looking over their shoulders.

Now, we're talking about creating a massive corporation. This solves the first part of the problem, but suddenly introduces brand new ones. We're no longer talking about a one-off production run of something that, once off loaded onto distributors, can be treated as a job done and, as time goes on with no knock on the door, a success that doesn't have to be worried about. We're talking about a business where you're guaranteed to get caught eventually. Your risks just went up massively. Even organized crime is going to be careful dealing with you. On top of this, you need the organizational ability and resources to hire a hell of a lot more people, which is going to be difficult to do if you either have to fool everyone in the organization that you're legit, or you limit yourself to a pool of people who don't really care about the almost certainty they'll end up in prison at the end of the game.

What the hell? If you're that skilled in business, why knock off NEC? Why not start something legitimate? Yeah, NEC's an established brand, but, c'mon!

Re:Wow, that is so cool

[mgblst]

The reasons you mentioned are why it doesn't happen that often (probably).

The advantages are now need for marketing, a well built up brand, and not having to provide warranties or support.

Re:Wow, that is so cool

[kfg]

There are a lot of "counterfieting" operations where the work involved makes you wonder why they didn't go legit.

The Secret Service often wonders the same thing, noting that in some cases the counterfieters could have "made" more money with the same effort through some legal practice.

I think the prime example in their collection of oddities is a hand drawn hundred dollar bill. Hand drawn so well that the artist got away with it, the bill passed and was only picked up at a bank check.

Think of the skill and time that went into that enterprise and how it might otherwise have been used for legal profit.

KFG

Re:Wow, that is so cool

[networkBoy]

As someone who works at a company that has been "pirated" in a similar manner, this is most decidedly Not Cool. I hope these guys become some of those famed Chineese organ donors.

-nB

Re:Wow, that is so cool

[networkBoy]

They also noted that the bill was worth far more than $100 simply as a piece of art. IIRC the guy actually drew 2 full bills and was in the process of drawing a third when he was caught?

-nB

Re:Wow, that is so cool

[Anonymous Coward]

It is a sad commentary that our society praises criminal, dishonest and unethical behavior as something to strive for. Perhaps on some level the creativity involved is something to admire but it is wrong to give praise for such anti social behavior.

Re:Wow, that is so cool

[Anonymous Coward]

Not cool...

Don't forget that China stole the Aegis system from the US and is building destroyers with it equipped.

Re:Wow, that is so cool

[kalidasa]

This sounds a lot like a misunderstanding of a guy I saw a documentary about maybe 10 years ago: his artistic "practice" is to try to pay for things with hand-drawn currency. In his case, the currency is NOT made to look like legal tender - e.g., he'll put MLK on a $100 bill, use lots of bright colors (this was before the preppification of the $20 bill), even put odd names on the bills. He makes no pretence that the money is US legal tender, or the legal tender of any other nation, but he does call it currency, and if the person he offers it to accepts it in payment, he signs it. His bills do, indeed, sell for a great deal more than the face value, if they have been used in a transaction; but the Treasury Department tolerates him because he's not actually counterfeiting money.

Maybe there's another guy out there who hand-draws currency designed to look real, but I doubt it.

Re:Wow, that is so cool

[networkBoy]

no no no... I know who you're talking about (and I've been trying to acquire one of his notes). The treasury dept. pretty much said that's what this guy should have done, because his "artwork" was so stellar.
-nB

Re:Wow, that is so cool

[Znork]

"I'm baffled by it, to be honest."

It's not that baffling. In trademarks, as in other intellectual 'property', there is a lot of so-called 'value' created through artificial scarcity. As the scarcity is artificially created through legal means, and not due to scarcity in the supply channel, this discrepancy in the market becomes exceedingly profitable. You can basically input an at-market-cost produced item, slap a zero-cost piece of paint on it, and charge more for it.

"Why not start something legitimate?"

Because then you'd have to sell the at-cost produced units at a competetive price, which means more or less at cost. The profitability comes from the legally enforced artificial undersupply of the market.

Ironically, the stronger the enforcement of intellectual monopolies becomes, the larger the discrepancy in the market becomes and the more profitable the black market will become.

Re:Wow, that is so cool

[kfg]

IIRC the guy actually drew 2 full bills and was in the process of drawing a third when he was caught?

Never do the same magic trick twice in a row. Unless you're Slydini, which is the equivilent of the guy who passes obvious fakes.

KFG

Re:Wow, that is so cool

[Illserve]

There are a lot of "counterfieting" operations where the work involved makes you wonder why they didn't go legit

I'm sure these guys, criminal though they may be, have put considerable thought into the alternatives.

The answer must be that they get to capitalize, for free, on Apple's advertising budget and years of reputation.

The benefits are enormous. If you crank out your own knock off ishuffle (assuming you avoid patent and trademark restrictions and good luck with that), it's an uphill battle to get the word out in a cutthroat MP3 market.

Re:Wow, that is so cool

[kilodelta]

What is far more interesting are a couple of sentences in the article.

Most significant of which is the one that says NEC is in negotatiations with some of the manufacturers. That and the fact that some of the knock-off goods were up to NEC standards. Talk about the dream of finding an in-place manufacturing setup with cheap labor costs. That's precisely what NEC has gotten.

so in the long run it isn't a total loss for NEC.

Re:Wow, that is so cool

[sjdude]

I'm surprised nobody has mentioned pharmaceuticals fraud in the context of this thread. A few years ago drug stores in Florida bought and distributed what they thought were real chemotherapy drugs. Here's a link to the story:

http://myfloridalegal.com/newsrel.nsf/newsreleases /2C02516B2654F1D18525713E006D02CA

Re:Wow, that is so cool

[Tweekster]

Reminds me of the guy, Josh Tatum back years ago. Basically the 20gold piece and the 5 non gold were so similar that if you rubbed gold dust it would be accepted as the 20dollar piece. So he would pay with the 5dollar piece and get change back for the 20. He was caught, arrested and found not guilty. He was a deaf mute, he never asked for change, they offered it to him. This is where the phrase, "Just joshing you" came from

Re:Wow, that is so cool

[jandrese]

"Up to NEC standards" isn't exactly a high bar to hurdle.

Re:Wow, that is so cool

[1iar_parad0x]

If I start a company in Uzbekistan selling counterfeit IPods, I'm sure I could get money from legitimate investors. How different is that from say large hedge funds that speculate on foriegn currencies? What's illegal on the national level is usually overlooked on the international level. Frankly, I seriously doubt Uzbekistan would extricate me, espcially if I paid them off. Plus, I doubt the US or Japan would want to really get involved in my prosecution, beyond the diplomatic channels. The biggest problem would be distribution channels. Maybe I could start a site called XPods.com. I could send spam and place annoying pop-up ads....

The key reason conterfeiters do what they do is that they can stomp all over any IP law that they want too. They can reverse engineer your best technology. They can sell inferior products with your trademark.

Re:Wow, that is so cool

[kalidasa]

Ok, thanks! The guy I'm thinking about is JSG Boggs.

Re:Wow, that is so cool

[everett]

I thought it was the liberty head nickel that looked like the $5 US Gold coin...wikipedia seems to agree. From the article http://en.wikipedia.org/wiki/Liberty_Head_nickel

"In early 1883, the Liberty Head nickel was first struck for circulation. The first 5.4 million pieces struck contained the Roman numeral "V" on the reverse, but did not contain the word "CENTS". Con artists quickly noted this, as well as the fact that the coin was roughly the same size as a five-dollar gold coin, and began gold-plating the new nickels and attempting to pass them as gold pieces. [3] According to numismatic legend, one of the perpetrators of this fraud was a deaf-mute named Josh Tatum, whose name is allegedly the origin of the verb "joshing". Supposedly, Tatum was not convicted because, being unable to speak, he did not actually make any fraudulent verbal claims regarding the coins, but merely accepted the change handed to him by the storekeeper [4]. This tale, however, may be apocryphal [5]. Whatever the truth of the case, what is known is that the Mint decided to add the word "CENTS" to the reverse design of the Liberty Head nickel in the middle of the 1883 striking [6], and this change remained until the coin was discontinued."

Re:Wow, that is so cool

[Tweekster]

woops, I stand corrected. I just was recalling what I saw on the history channel but it was a while ago. Thanks for the correct info.

Re:Wow, that is so cool

[milimetric]

reason is because if they put another name on it they'd be infringing on copyright. The only way to copy something is to do it illegally I guess.

Re:Wow, that is so cool

[soft_guy]

I agree they should be punished, but I think your proposed sentance is too harsh. Even if the person murdered someone, I think it would be too harsh and we are talking about a non-violent crime.

Re:Wow, that is so cool

[billcopc]

The kicker is that organized crime has little to do with it. It's not like you walk up to a guy in a dark alley with a business plan and product briefs for gadgets. These are often semi-legitimate companies that go rotten after a few years of lackluster success. One such market I'm very comfortable with is the booming FTA satellite receiver business. One particular company has had their receivers cloned like no other, looking and functioning almost identical to the original, except the software/firmware is incompatible. The beauty of this scheme is that you won't know you've been shafted until you go to update your firmware and end up bricking your receiver.

This company had a legitimate product at first, but they were jealous of their competitor's success and decided to clone the Pansat model. Since these are asian companies mostly dealing with american distributors (most of whom are sketchy affairs to begin with), it's really easy to fool the distributors which results in mass confusion. It wasn't until some crafty folks started ripping their dead machines apart that they figured out what had happened. If only the clone had been compatible with official firmware they might have gone undetected for years.

Re:Wow, that is so cool

[Anonymous Coward]

What're you talking about? I've owned several monitors, CD/CDR drives, and 3.5" disk drives under the NEC brand. They've all been stellar and I only wish they still did OEMs in the US.

Re:Wow, that is so cool

[DragonWriter]

There are a lot of "counterfieting" operations where the work involved makes you wonder why they didn't go legit. People selling "fake" iPod Shuffles, for instance, that actually work, they're just not real shuffles. Someone's taken the time and trouble to organize the manufacturing of this item, including a certain amount of R&D, for a working product. And then they proceed to spoil the entire enterprise by putting someone's else's name on it, meaning: - they can't sell via legitimate distributors - they can't get funding except from organized crime. - they have to do business constantly looking over their shoulders.

Well, yeah. So it doesn't make sense to set up a business like this -- unless you are organized crime. I mean, everything you do already requires you to look over your shoulder, legitimate businesses don't want to have anything to do with you, and you probably already have connections to gray- and black-market distribution channels.

Re:Wow, that is so cool

[jandrese]

OEM, as in when they were known as Packard Bell?

Re:Wow, that is so cool

[grumpyman]

There are a lot of "counterfieting" operations where the work involved makes you wonder why they didn't go legit. People selling "fake" iPod Shuffles, for instance, that actually work, they're just not real shuffles. Someone's taken the time and trouble to organize the manufacturing of this item, including a certain amount of R&D, for a working product. And then they proceed to spoil the entire enterprise by putting someone's else's name on it

Don't be baffled. You realize that a lot of manufacturings are outsourced to non-US places, esp. China? These so-called pirate manufacturers are actually the legit out-sourced factories. During the day they're doing Apple's orders. During off-time, they're producing for the 'other distributors'. No I'm not kidding you.

Re:Wow, that is so cool

[Anonymous Coward]

Cry more, pussy.

Grow a pair some day.

This happens all the time...

[ookabooka]

Common, has anyone been to Washington DC lately? Areas outside of the US? I took a trip back in middle school to DC where people were selling "Oakley" sunglasses for 5 bucks. I think that faking a company name is done all the time. . . Oakleys, Rolexis, NEC electronics. . .the name of the game has been around for a while...

Re:This happens all the time...

[jrmcferren]

Don't forget Duracell with Durasell, Dynacell, Duraking, and so on.

Re:This happens all the time...

[Anonymous Coward]

In the future, please read the article before you waste our time.

Re:This happens all the time...

[EL3CTRO]

People sell fake brands all the time, what the guys in the article did went much deeper than that, they developed links with other companies under the false pretense that they were NEC. They even created their own products!

Re:This happens all the time...

[emotionus]

Some guy with a garbage bag of Sunglasses and Watches is a bit different then a company manufactoring goods on a massive scale and selling them in stores?

You know the guy with a garbage bag of the product is bullshitting you. But what if it was in the Sunglass Hut (tm) ?

Re:This happens all the time...

[GaryPatterson]

No... this kind of thing almost never happens.

Usually fakers just do what you said - use the name. They don't set up an entire outsourced manufacturing base with a global distribution arm reaching as far as Africa and the EU.

Re:This happens all the time...

[Whiney Mac Fanboy]

That show's you can copy & paste the article.

The GP was asking you to read the article.

Re:This happens all the time...

[absent_speaker]

Not quite. While Oakleys, Rolexis and other knock-offs have been manufactured for a while, this is a whole different ball game. These individuals actually lease property, negociate with suppliers and establish sales relationships in the name of NEC. They do all this under the flag of the firm's proper brand name, not some mispelling. Those are two very different scenarios. It's kind of a neat scam. It will probably inspire con-artists everywhere to try something similar. I could just imagine someone faking Hilton. They could order a large quantity of samples from a few suppliers - and pay upfront for the samples to build trust. The scammer later says they love the product and then order 5 cargo containers from each supplier on 30 days credit terms with a forged letter of credit. And then Bam! They disappear with a few million in goods to never appear again.

Re:This happens all the time...

[Anonymous Coward]

First you waste our time. Then you decide its okay to add 9 pages to the discussion? =/

I want to moderate users, not their comments.

Re:This happens all the time...

[ookabooka]

Ok, the article states that a "network of more than 50 electronics facotires" were chruning out these immitation products. I understand that this is probably larger and more damaging that a few fake sunglasses, but the issue is still the same. Until everyone (including China) adheres to trademark laws and such, these kinds of things should come of no surprise.

Re:This happens all the time...

[Cyvros]

Exactly. This was a very well-coordinated and well-conceived plan, not something down in the backyard. This was done in the open with, as the article noted, "official-looking documents", passes, ID cards, etcetera.

This is just taking piracy to new levels. This would have taken a lot of effort, but I'm sure that it would be increasingly commonplace in years and decades to come.

As a few people have said, slapping a bodge label on a bodge product in a bodge market is something, but producing decent-quality products, as the article infers, in proper factories and sold in proper shops and retail outlets is another.

Re:This happens all the time...

[myxiplx]

Read the article. They're not talking about putting a NEC brand on one or two shoddy items. They're talking about setting up a company and pirating the entire NEC image.

They were placing orders with factories using the NEC name. They commissioned R&D, their factories had NEC signs on the outside. They even designed and built their own products.

This is a huge step from the guy selling Oakley sunglasses. By faking the company and not just the product they were able to get their goods sold in legitimate outlets, right alongside genuine NEC products.

When you start to think about it, the scheme works on so many levels. Ordinarily you run a huge risk to create a factory producing fake goods and everybody in the factory shares that risk. That means it's massively expensive to set up and run, your staff are sub-standard and there's always the risk of blackmail. By creating a fake parent company and just ordering the goods from 'legitimate' factories, they bypassed all these problems. You've now got good cheap staff, proper management, and all in all a far more efficient service.

Even better, now the police can't prosecute these factories for producing the goods since they've done nothing wrong - they've just fulfilled orders as normal. Of course they'll have to stop production and will have their goods confiscated, but their insurance will cover that... The police have no choice but to go for the parent company. Fair enough you've now got to collapse that side of the operation but you've got nowhere near the costs. A few staff, some nice headed paper... sure beats loosing a factory.

Plus, you're no longer selling cheap pirated goods on the street. Instead you're able to charge full retail price.

In one fell swoop they've cut the costs of producing goods, made production more efficient, sold them at a higher price, and managed to legally insure the vast majority of their pirate production line against the risk of getting caught.

Genius, sheer genius. Yes it's illegal, but you can't help but be impressed. Somebody somewhere deserves serious Kudos for coming up with this.

Re:This happens all the time...

[Anonymous Coward]

Also, in the future, you may be interested in the No Karma Bonus checkbox when replying to a personal comment :)

Re:This happens all the time...

[Anonymous Coward]

Did I go to school with you?

http://www.tgpo.info/

Re:This happens all the time...

[aaronl]

So... these people set up a company, did legitimate business, developed products, shipped and sold products. They did everything any other company does, except come up with their own name and logo.

Perhaps these "official-looking documents", passes, ID cards, etcetera, *were* official. Perhaps they were just issued by the bizzaro-NEC that was stepping on the real NEC's name. That's could still be nothing more than trademark infringment.

There is nothing here that even resembles piracy, or copyright infringment, or theft. These people used the NEC mark, and the real NEC is pissed. These guys were able to exploit the ease with which NEC could close business deals for manufacturing, or marketing a product. They have been riding in on the coattails of a large company with an established brand *by infringing their trademark*.

Re:This happens all the time...

[aaronl]

Why should they have all those good confinscated? There should be an injunction placed on the sale of the merchandise, and they should be required to be relabelled to not violate NEC's trademark. *THERE IS NO PIRACY IN ANY FORM.* Nothing was taking from NEC, NEC lost no property or money. A company was masquerading as NEC, and taking advantage of the name. That is trademark infringment.

If they change their name from NEC to NAC or something, they should be able to keep on going doing business. Then you deal with the infringment of the NEC mark in court, and figure out what restitution is appropriate.

Also, "Kudos" is a snack bar when you use it as a proper noun. They do deserve some praise for getting their sneaky plan to dispatch with sales channel agreements and advertising from their costs, but they can buy their own food, thank you very much.

Re:This happens all the time...

[mapkinase]

Genius, sheer genius. Yes it's illegal, but you can't help but be impressed.

Firs of all, crime when organized were always coming up with quite elaborated (far from genius) schemes that inspired many art creations. The reason for existence of those "geniuses" is slackness of the government and business culture in particular region.

What is exactly so "genius" in this scheme? Since when pretending to be someone and going very far in it is "genius"? How long would it take for their unsuspecting wholesale partners to verify the identity of the entity they are dealing with? The reason they did not do that is simply this: they did not care.

In Russia, in nineties, there were similar cases in spirit manufacturing. I do not think this is something new.

Re:This happens all the time...

[surprise_audit]

So here's an excellent opportunity for poetic justice - NEC should turn around and *really* order those products from the innocent factories, and market them for themselves... Someone else has very kindly done the research and product development, and the products obviouly sell fairly well. The article says the bogus NEC products were of generally good quality, so why not pirate them back??

Re:This happens all the time...

[emotionus]

Uhh.... What about the various products they "stole" - by way of not having to do the research and design needed to "Create" a product. The company did steal something. As has been pointed out, the entire operation deserves some sort of admiration however. Sure, Trademark infringement is apart of this. How else could they have done what they did without the NEC name? It may even be the biggest part because it being the only way it could have happened (possibly). However this company did steal something other then just a logo: they stole R&D.

Re:This happens all the time...

[Anonymous Coward]

In Russia, in nineties, there were similar cases in spirit manufacturing.

But before the nineties, in Soviet Russia, spirits manufactured you!

Re:This happens all the time...

[mgblst]

If someone comes from NEC and places a large order, and pays, what are you going to do? Ring up the national NEC number, and query it? Look for their picture on the website?

Why would you even question it, unless they came of rather dodgey.

Re:This happens all the time...

[ArsenneLupin]

What about the various products they "stole" - by way of not having to do the research and design needed to "Create" a product.

Read the article... They did their own research and developed entirely new products for which no corresponding genuine NEC product existed! Which makes the whole thing all the more bizarre...

Re:This happens all the time...

[ArsenneLupin]

If someone comes from NEC and places a large order, and pays, what are you going to do? Ring up the national NEC number, and query it? Look for their picture on the website?

Well, now that this has been in the news, yes, you will to all this, and still not fully trust them!

So, in a way, NEC may have shot themselves into the foot here by making this public. Suddenly they will notice that it will be much harder to them to establish new business relationships as everybody will wrongly question their authenticity ;-)

Re:This happens all the time...

[squiggleslash]

The FA actually implied that some of the products being sold were knock-offs of legitimate NEC products. So can we quit the "There's no piracy here" meme? Copyright infringement, which is one of the definitions of "piracy" according to 99% of dictionaries for the last God-knows how many years, certainly has occurred.

Re:This happens all the time...

[labyrinth]

NEC to NAC- are you Dutch?

Re:This happens all the time...

[cheezus_es_lard]

What's amusing is the amount of gravity that the statement 'a network of more than 50 electronics factories' is given. That's like saying 'he's ordered from every major online distributor in the U.S.!'. In this day of commodity everything, any of these places will manufacture whatever you want if you throw the data at them, so if anything, that just shows the length of time this scam had been running. The fact that they had placed orders with more than 50 factories doesn't make those more than 50 factories complicit in anything, just in completing orders from Bizarro-NEC.

When hub is Bizarro-NEC and the spokes are the 50 factories, that's not a network, that's one company doing business.

$0.02 deposited

Re:This happens all the time...

[wenzi]

Pirates are in the business for the same reason as everybody else, to make money.

The soon find out that if they move up the product chain, they can charge more and make more profit.

Look at the pirate DVD market in china. First it was just shabby envelopes with badly copied covers. In just a few years, they had moved to products that counld be sold next to legitimate products.

This is just another example. They probably started off pirating some small NEC part, and it just kept growing and they had to make the fraud look more and more realistic over time.

Re:This happens all the time...

[Bloke down the pub]

They were placing orders with factories using the NEC name. They commissioned R&D, their factories had NEC signs on the outside. They even designed and built their own products.

In which case they might as well have just set up as a normal company. Obviously the name NEC is already taken, so I'd suggest something nice and distinctive like Söny, Pànasonik, Hitaçhi ...

Re:This happens all the time...

[orkysoft]

The only thing to distinguish the scammers from the real NEC is that the real NEC people (can) have @nec.com email addresses, and the scammers can't. But perhaps they registered nec under an obscure TLD? (No, I did not RTFA...)

Re:This happens all the time...

[swillden]

The FA actually implied that some of the products being sold were knock-offs of legitimate NEC products. So can we quit the "There's no piracy here" meme? Copyright infringement...

Copyright law doesn't generally apply to products. At most it may apply to artistic, non-functional aspects of the exterior design, but even that's rare. Note the number of iPod knock-offs that look just like an iPod, except they have to use a different input mechanism because the iPod wheel controller is patented. And they don't say "Apple" or "iPod" on them anywhere.

Unless there are patented components, it's generally perfectly legal to produce and sell knock-offs of a company's products. It's not legal to put the company's name on them, that's trademark infringement.

Re:This happens all the time...

[scottv67]

The only thing to distinguish the scammers from the real NEC is that the real NEC people (can) have @nec.com email addresses, and the scammers can't.

1) Why would you post a comment when you haven't Read The Fine Article?

2) According to your scam-detector rule listed above, the people at "nissan-usa.com" must be ripping off the auto manufacturer that produces the Maxima because their email address does not end in "nissan.com"....

Re:This happens all the time...

[squiggleslash]

This isn't the 1960s any more, and we're talking about NEC, a major electronics manufacturer. Unless the fraudsters were substituting their own firmware, microcode, and other copyrightable components of goods they were knocking off, they most certainly were engaging in copyright violations.

Re:This happens all the time...

[swillden]

Unless the fraudsters were substituting their own firmware, microcode, and other copyrightable components of goods they were knocking off, they most certainly were engaging in copyright violations.

Agreed, if they were copying copyrighted software, then there is an element of piracy.

Re:This happens all the time...

[mgblst]

Yeah, I am not sure that the real NEC will have to many problems convincing people that they are authentic - for most stuff they would just go through regular channels. For new companies, just invite them to the company headquarters - what they would probably do for a big deal anyway.

Re:This happens all the time...

[kalidasa]

You're forgetting about design patents. A lot of the iPod knockoffs may violate Apple's design patents; we'll see.

Re:This happens all the time...

[Anonymous Coward]

Faking Hilton? I thought the video was real

Re:This happens all the time...

[Anonymous Coward]

And if they were robing ships at sea there is an element of copyright infringment.

Re:This happens all the time...

[orkysoft]

1) You're new here, aren't you? :-P

2) Well, I don't know which domain names Nissan has. I remember the case of a guy named Nissan who has or had nissan.com, so Nissan the car manufacturer might not possess it. So if you want to do business with Nissan the car manufacturer, you might have to dig a little deeper to find out who they really are, and not just be bamboozled by a credible-sounding domain name.

not "faking a company"

[mapkinase]

this is called "faking a brand". To fake the company, one needs to fake offices, for starters, so people can walk up to the office with sign "NEC" on it without knowing.

Did they pretend to be NEC in wholesale deals with other businessmen and the other businessmen did not they were dealing with them? I did not find it in TA.

I do not know if previously electronics was faked, it seems to me that it happened ito happen in the past as well, so I do not think this is news of "faking a company", looks like it is the case of "faking the news".

Re:not "faking a company"

[cnettel]

If the involved factories indeed were producing under what they thought were real licensing contracts, then it's more than just faking a consumer brand. (Now, of course the involved factories and other parties can just benefit by claiming that they were in good faith, but there might be some truth to it in some cases, who knows?)

Re:not "faking a company"

[Tx]

Did they pretend to be NEC in wholesale deals with other businessmen and the other businessmen did not they were dealing with them? I did not find it in TA.

Only because you didn't READ IT.

These records showed that the counterfeiters carried NEC business cards, commissioned product research and development in the company's name and signed production and supply orders.

Some of the factories that were raided had erected bogus NEC signs and shipped their products packaged in authentic looking boxes and display cases.

etc, etc

Re:not "faking a company"

[Whiney Mac Fanboy]

. To fake the company, one needs to fake offices, for starters, so people can walk up to the office with sign "NEC" on it without knowing.

TFA:

...the counterfeiters carried NEC business cards, commissioned product research and development in the company's name and signed production and supply orders.

He said they also required factories to pay royalties for "licensed" products and issued official-looking warranty and service documents.

Some of the factories that were raided had erected bogus NEC signs and shipped their products packaged in authentic looking boxes and display cases.

Re:not "faking a company"

[Anonymous Coward]

Only because you didn't READ IT.

If the article wasn't embedded in flash/javascript obfuscation from hell, perhaps everyone COULD read it.

Imitiation is the sincerest form of flattery

[Mostly a lurker]

... so why does NEC seem so upset?

Re:Imitiation is the sincerest form of flattery

[pimpimpim]

Because you won't buy NEC stuff a second time if it turned out to be crap. Now say, for a 2 dollar versace shirt you can be sure that it is fake, but I can imagine that they were selling the burnable DVDs for "expectable" prize-ranges.

The people doing this apparently have the skills to set up a whole production and distribution network, they should stop buggering other companies and start their own! Who knows, they might get somewhere with it, samsung was only a B-brand in electronics not too long ago and look where they are now! (Ok, maybe bad example since samsung is a pretty old company, but still there are plenty of possibilities to grow'

Re:Imitiation is the sincerest form of flattery

[Opportunist]

Because they don't want your admiration, they want your money. Now, if there's an imitator, they have to share that money with him, while he doesn't give them any. So...

Re:Imitiation is the sincerest form of flattery

[The-Bus]

I'm assuming it would be embarassing if the top execs looked at this fake company and saw that it was running more profitably than the real company or building better products.

Re:Imitiation is the sincerest form of flattery

[Anonymous Coward]

I'm assuming it would be embarassing if the top execs looked at this fake company and saw that it was running more profitably than the real company or building better products.

as NEC computers seem to be rebadged Packard Hell machines, I think you may be onto something!

Re:Imitiation is the sincerest form of flattery

[jandrese]

Because you won't buy NEC stuff a second time if it turned out to be crap.

Yeah, but what if I accidentally bought the knockoff instead?

Re:Imitiation is the sincerest form of flattery

[digital.prion]

... so why does NEC seem so upset?

The quality was better.

Piracy means what again?

[DJ Rubbie]

This is not supposed to be called piracy of a company, it's a trademark violation, unauthorized and fraudulant usage of the NEC trademark. The affected factories claims that they have papers to prove that they were licensed to manufacturer the goods, but the papers were faked, which is considered fraud. The term 'piracy' has been utterly bastardized and overused already, please be more specific.

Re:Piracy means what again?

[jozi]

The misuse of the word piracy gives all us true pirates a bad name. Piracy doesn't even have to take place on the high seas anymore. Damn all sweet water pirates to hell!

Re:Piracy means what again?

[Octorian]

Actually, it sounds a heck of a lot more like "identity theft," on a corporate level. Well, I suppose that would be trademark violation of sorts, except taken to a whole new level.

Re:Piracy means what again?

[QuantumG]

It's not just piracy. It's any word. This is the battle over memes and the transnationals (err, multinationals) are way ahead of the game. Our little voices yelling can't compete with their saturation media outlets.

Re:Piracy means what again?

[Tom]

Hey, let's pirate the pirate term! Once it's lost all its meaning, the RIAA will have to come up with something else.

In fact, I think it's pretty dumb to use piracy in the first place, at least while the latest hollywood movies promote the usual romantic, somewhat-evil-but-ultimatly-good-at-heart image of pirates.

Re:Piracy means what again?

[maxwell demon]

Maybe the founders of that fake-NEC actually used ships to enter NEC factories (probably they caused a flood to do it) in order to steal the name as well as any needed documents.

Re:Piracy means what again?

[Jesus_666]

Exactly what I think. We should just apply the word "piracy" to any kind of misdemeanor whatsoever. Make it a part of the common slang. Once teenagers talk about pirating apples from the neighbour's garden we can be sure that nobody will care about the oh-so-evil pirates anymore.

Re:Piracy means what again?

[Anonymous Coward]

its kind of like stuttering... like if i call you a stuttering bitch, chances are you are just stammering, not stuttering. stuttering is a spasmodic form of stammering where you actually can't get the words out where as stammering is just messing up a word like 'ta-ta-ta-today junior'

Re:Piracy means what again?

[Anonymous Coward]

It's more than trademark infringement, it's "identity theft". The fact that the companies thought they were working for the real NEC was the real thing that differentiated this from run-of-the-mill trademark infringement cases.

Re:Piracy means what again?

[ultranova]

Exactly what I think. We should just apply the word "piracy" to any kind of misdemeanor whatsoever. Make it a part of the common slang. Once teenagers talk about pirating apples from the neighbour's garden we can be sure that nobody will care about the oh-so-evil pirates anymore.

Better yet, make it the verb equivalent of "it". Once you can say "I pirated my wife twice last night" or "The Sun is pirating", or "It's pirating" the whole concept of "pirating movies" will lose its meaning, since it could refer to absolutely anything.

Yes, we should definitely pirate this !

Re:Piracy means what again?

[metsu]

Real High Sea Piracy is not as rare as you might think. http://www.imo.org/Circulars/index.asp?topic_id=33 4

Re:Piracy means what again?

[Billosaur]

This is not supposed to be called piracy of a company, it's a trademark violation, unauthorized and fraudulant usage of the NEC trademark. The affected factories claims that they have papers to prove that they were licensed to manufacturer the goods, but the papers were faked, which is considered fraud.

<pirate>Ahhrrrrrrrrrrrrrr!!! Sign over yer intellectual property rights and branding, or yew'll be swimmin' with the sharks, Maties!</pirate>

Re:Piracy means what again?

[MADCOWbeserk]

I pirated your wife last week in the motel by the airport......

Re:Piracy means what again?

[Fred_A]

And despite what Hollywood says, it's neither dashing nor romantic...
Boarding a cargo ship and murdering everyone on board to steal the merchandise isn't cool however you look at it. I know quite a few people who were officers in the merchant marine and they didn't find it particularly amusing either.

Re:Piracy means what again?

[DerekLyons]

This is not supposed to be called piracy of a company, it's a trademark violation, unauthorized and fraudulant usage of the NEC trademark. The affected factories claims that they have papers to prove that they were licensed to manufacturer the goods, but the papers were faked, which is considered fraud. The term 'piracy' has been utterly bastardized and overused already, please be more specific.

No, this is a legitimate usage of the word 'piracy' based on comparable usage going back centuries, you've been mislead by anti-[MPAA|RIAA] marketdroids into believing otherwise. The term 'piracy' actually has much broader meaning than they would have you believe.

Re:Piracy means what again?

[floorpirate]

Wait, piracy requres water?

What about ocean-blue carpet? Or tile? I swear I'm a real pirate, I just get seasick!

Re:Piracy means what again?

[Grishnakh]

That's because today's pirates aren't as cool as they used to be. They don't have hooks and eyepatches and say "Arrr Matey!". Pirates... they don't make them like they used to.

Anyway, I looked through some of those reports about piracy, and it seems like they ships being attacked were all unarmed. If there's nearly 500 acts of piracy committed every year now, why wouldn't ships carry machine guns or something? It seems pretty stupid to me.

Re:Piracy means what again?

[RFC959]

I really don't want to get into the g*n c*ntrol argument here YET AGAIN, but suffice it to say that in most countries, it would be a huge legal hassle to arm your ship/crew, especially with automatic weapons. This is something international sailors really do have to deal with; you don't want to dock in Frobozzia only to have the local cops say "An illegal gun! 20 years in prison for you!"

That said, some ships do use other kinds of "weaponry", such as sonic devices, or the simple expedient of keeping fire hoses playing on the water around the ship, which will make it difficult for small boats to approach without being swamped.

Re:Piracy means what again?

[Grishnakh]

I'm not saying you're wrong, but this is really silly. No one's suggesting letting cargo ship sailors carry automatic weapons into port cities when they go bar-hopping; I'm thinking something more along the lines of deck-mounted 50-cal. machine guns. Guns that stay on the ship, and are used when the ship is attacked out in international waters.

Of course, stupid laws are the norm in most countries, it seems, but wouldn't it be sensible to allow merchant ships to have weaponry on board to protect themselves from pirates? All the countries with ports have to do is change the law to allow ships in port to have weapons on board the ship (but not to take the weapons off the ship).

The IHT Goole AD says it all

[arivanov]

Well... The ad on the article says it all:

• 
  Product Sourcing
  Buy Risk Free From China IVELL - Global product sourcing
  www.ivell.com

and

• 
  Quality Manufacturing
  Plastic, electronics and metal UK Management, Chinese Factory
  www.motiontouch.com

More Questions anyone?

Re:The IHT Goole AD says it all

[digitaldc]

Product Sourcing Buy Risk Free From China IVELL - Global product sourcing

Buy Risk Free From China? IVELL certainly NOT!

All i have to say is.

[NinjaNoh]

Yarr!

I suspect this is extremely common

[bobamu]

I was looking at a chinese electronics manufacturers page some time ago, and they had a bulletin board.

One of the posts effectively consisted of "Can you make me some tv's branded panasonic and send them to north africa"

Tip of the iceberg, perhaps.

Re:I suspect this is extremely common

[sjwest]

There was no trademark law in China - thus it would not be illegal. Its comming as part of the wto banwagon but the Chinese communists dont really care about it, while there 'cracking down' now and again its more to keep Bush and his riaa pals happy.

If you move your operation to China - and pay poor wages, why should any firm complain that there product is being made by not them elsewhere in that new country?

If boss moves the manufacturing operation to 'its no crime here yet land' then that just shows you that those chinese people are enterprising and the managers of that business that moved the manufacturing operation from america (or elsewhere with trademark law) to china as slighty dumb.

Its a view with its merits

Re:I suspect this is extremely common

[Anonymous Coward]

What does the RIAA have to do with counterfit appliances? There are differences between trademarks, copyright and patents. And there's a huge gap between the things that americans make a big deal out of and chinese anarchism.

I know one guy would be proud...

[Tavor]

"Man has climbed Mount Everest, gone to the bottom of the ocean. He's fired rockets at the Moon, split the atom, achieved miracles in every field of human endeavor... except crime!" ~Auric Goldfinger, in the movie "Goldfinger" (1964)

You've got to pirate the right company...

[Centurix]

1. Register slashdot.net
2. ???
3. Profit!

Why target NEC?

[antifoidulus]

Why did they go through all the motions of creating a distribution network but only pretend to be one company? And why NEC? NEC isn't really much of a player anymore in the consumer world, they are more into industrial grade manufacture and IT consulting. They still do make consumer electronics, but they hardly seem to be the companies bread and butter anymore. Nor are they dominant in the field, TFA goes on to say that some of the products weren't even close to anything NEC currently makes. Why not also claim to be Philips or Sony or Samsung?

Re:Why target NEC?

[petermgreen]

i'd guess because NEC is a well known brand without having so many existing deals with retailers/distributors that it would be difficult to set up such deals for the clone company

Re:Why target NEC?

[NinjaNoh]

No one suspects a company such as NEC. If you go down to Hong Kong, and look into buying some Nike shoe or a Sony Monitor of some sort; you may be inclined to double check the product. With NEC, you basicly know that you get what you pay for. Although why pirate a company, when you could just start your own? Well it is like "How many licks will get you to the center of a tootsie pop?","What is the true motive of Google?", or "How many roads must a man walk down, before you can call him a man?" the world will never know.

Re:Why target NEC?

[stanmann]

The answer is 42. 42 I say. I also say YOU FOOL!!!

Re:Why target NEC?

[builderbob_nz]

Why NEC? I'm not so sure about over-seas but here in New Zealand, NEC and Packard Bell are the same outfit. Unfortunately (IMHO) the Packard Bell brand is still popular here for cheap PCs.

Re:Why target NEC?

[Herkum01]

This does not suprise me, it is the result of the way large american companies do business. Think about it, you are a new company who can produce anything and when you go to Sears, Dillards, Target, etc... they will not even talk to you because you are not a major supplier; never mind can provide the same product for a better price. By pretending to be NEC they get their foot in the door; before they could not even get on the parking lot.

I bet the next step is for major companies to license small companies (like this one in the article) as subsidiaries of the major companies. They pay a fee to use the company brand and say they are a subsidiary (when they are not), and then market their own products to the likes of Target and Wal-Mart.

Re:Why target NEC?

[Echnin]

NEC is bigger in Japan than in Europe. Cell phones, computers, are some of their popular products if I remember correctly. I wouldn't be surprised if they were also better known in China and Taiwan, which were the markets targeted by this scam.

Re:Why target NEC?

[jamar0303]

Well... They are most certainly not the same company in China and elsewhere- NEC is a Japanese company, Packard Bell is not (I hope not)- NEC produces handphones (mobile phones), Packard Bell produces mildly reliable PCs- NEC has a reputation for being innovative, Packard-Bell doesn't- the only similarity is that they both seem to be targeting the low-end of their markets (NEC now produces quite a lot oc cheap handphones, Packard-Bell produced some of the cheapest PCs I have ever used).

Re:Why target NEC?

[ElGanzoLoco]

The NEC brand is still quite popular in Asia.

Asia is soooo flooded with fake products it's almost hilarious. I bought a kickass "Sony" VCD player there some time ago. And I have some pictures of cheap iPod nanos labelled "Sony" as well...

In Thailand you used to find Nike Air Max shoes with "Reebok" printed on the sole and the FILA logo on the side (or maybe it was the other way round). Quite cool!

Anyway, best knock-off I ever was a pair of (thai) Levi Strauss jeans, perfectly imitated but called "Live's Stress". Ha ha :)

As a side note, in some asian countries (Vietnam, Cambodia, probably Laos), you just CANNOT buy original CD's, DVD's, or books, simply because the market is so small & poor that no-one actually bothers to distribute the legit stuff. So it's pirated goods or bust. Of course, since it's cheap (2 bucks per DVD), regular folk actually can buy some music and movies from time to time, something they wouldn't be able to do if they had to buy them at "normal" prices.

Oh, and in Cambodia the TV CABLE COMPANY (that distributes, among others, HBO, CNN etc...) runs its OWN PIRATE CHANNEL that broadcasts cheap VCDs of hong-kong kung-fu movies (dubbed in thai and subtitled in malaysian...). Since the movies usually hold on 2 VCDs, sometimes the movie stops for a couple of seconds before an operator at the company switches disks (yes I've seen it with my own eyes!!). Absolutely amazing.

Re:Why target NEC?

[Eivind]

I got a very nice "Nelly Nansen" bag in Poland. (Hint, it's 'Helly Hansen')

Everything from design to font in the label was identical to the real thing, as far as I've been able to tell even the quality is comparable to the original. Or atleast it's good enough for me, I've used it literally daily for years, and it's still got all seams intact, all zippers working perfectly, fabric looking like new, and still waterresistant like new.

Will the real slim shady please stand up?

[Thecarpe]

Hi, Bill Gates here. I'd like you to visit my new site:

http://www.m1cr0s0ft.com/

Re:Will the real slim shady please stand up?

[50m31sl4sh.]

No, moron, I'm real Bill Gates!
I own this great site: http://www.g00gl3.com/
There's a picture of me and my friend Steve there.

All your google are belong to me.

Suddenly it all makes sense!!!

[soren42]

This is exactly what Microsoft did to IBM's PC software division in the 80's!

I always knew there was *something* underhanded there, but couldn't put my finger on it.... ^_^ Contract, schwantract.... No company, not even IBM, could have been that stupid. It was all just "Corporation Piracy".

It all makes sense... DOS, CP/M, and, of course, once MS had made enough money from the theft they started taking less and less of IBM's assest - with the last partial theft in the Windows 95 + OS/2 Warp releases... from there, Microsoft could just keep heaping "original" code onto the DOS codebase it secreted away.

Ahhh, all is right in the world when everything finally falls into place!

(Disclaimer: This is a joke. Sarcasm. Humor, people. We all know the real facts..... or do we???)

Download please

[AndyTheSayer]

Ooh, piracy. So, anyone got a link to the torrent?

That's a co-incidence

[mustafap]

I've been faking being an employee for years :o)

Re:That's a co-incidence

[dpilot]

Have they been faking paying you?

Re:That's a co-incidence

[mustafap]

One did, bastards.

Re:That's a co-incidence

[chainy]

Wally?

Re:That's a co-incidence

[Anonymous Coward]

yeah...you're going to have to talk to payroll about that.

Re:A school project

[Anonymous Coward]

If everyone was paid $1,000,000 worth of stock for a year's 'work', the company would be capitalized at ten billion dollars.

Don't you capitalize on turnover not outgoings? You have a turnover of nil.

Already done here in the US...

[dietrollemdefender]

That would make the Canada's equivalent of the Fortune 500 at least. After a year, having achieved our goal, the stock would become worthless.

It was already done, here, in the US: it was called "Enron".

Re:Already done here in the US...

[MooseTick]

"That would make the Canada's equivalent of the Fortune 500 at least."

Canada's so small, wouldn't a guy selling 20-30 items on eBay make their Fortune 500 list?

oops

[mapkinase]

I guess my post was still useful, to bring upfront the relevant passages from the article. :-)

Neat!

[mano_k]

And I thought the guys who claimed to work for the railway company and started removing the rails of an abandoned line not far from where I livedhad been something!

The hired local companies for transport and even distributed leaflets to the people in the neighbarhood informing them of the upcomming works! They made some money from the scrap iron before anybody noticed!

I don't trust the article...

[Anonymous Coward]

How do we know the reporters were getting comments from the real NEC executives?

Re:I don't trust the article...

[slcdb]

How do we know the *reporters* are the real IHT reporters?

How do we know this article was posted on the *real* slashdot?

How do we know this website is on the *real* Internet?

It's all a big friggin conspiracy I tell ya. There is no NEC. There is no IHT. There is no Slashdot. There is no Internet.

And there is no spoon.

Re:I don't trust the article...

[the eric conspiracy]

Just take the red pill.

MP3 Players, too

[Killshot]

An aquaintance recently went to China to visit a factory that makes the sony bean mp3 players. They told him they could make the players for him and just leave the sony logo off it. He then plans to sell them on ebay.

I tried to explain how bad an idea this was and how there are so many other legal ways to invest your money, but he wouldnt hear it.

Re:MP3 Players, too

[StupidStan]

the joke will be on him. I owned one of those, one of the poorest designs/interfaces I have ever seen.

Re:MP3 Players, too

[univgeek]

This would be perfectly legal if the company was ODM/OEM'ing the product for Sony. Then they own the design, etc., and Sony might merely be branding it as their products.

Re:MP3 Players, too

[the eric conspiracy]

IANAL but it seems to me this might be an actually legal idea.

Re:MP3 Players, too

[kfg]

So long as he does not claim they are Sony, only the same as Sony, this is a legal way to make money, and a perfectly good one.

How do you think the "designer" jean and entire generic products market works, and, for that matter, most of the electronics gear market. See the Netgear backdoor scandal.

In some special cases it's even legal to use a "false" label. I hold in my hand a "Stradivarius" violin, dated 1736. The label also bears the notation "Made in Germany" (circa 1936).

So long as that "Made in Germany" is on the label it's perfectly legal and millions of such violins are sold around the world. It's even legal to buy violins built in China, finish them in the US, and label them "Made in USA," so long as sufficient US labor went into the finishing work.

Of course Stradivarius isn't around to sue anymore, but the mere threat of potential lawsuit isn't evidence of any actual laws broken, although it is a business risk to take into account.

KFG

KFG

Re:MP3 Players, too

[Rolo Tomasi]

You mean like Sony buying LiteOn Optical drives, putting their logo on them and changing the firmware to report 'Sony' instead of 'LiteOn'?

Or like virtually every notebook manufacturer (including Apple), assembling their notebooks out of Chinese OEM parts?

Do you know why Chinese 'piracy' is so rampant? Because all the products are made in China anyway. One factory produces the 'brand' product during the day and the 'pirate' product after-hours. Of course they're completely identical.

I mean think about it, if you were a Chinese company manufacturing electronics, and you see how the stuff you design and produce is sold for ten times the price that brand X pays you in the West, you'd start to wonder a bit too.

If the products were designed and produced in the 'West', this would be much more difficult. But the corporations don't care. They still make a huge profit by sticking their brand name on Chinese stuff and selling it for a huge markup.

Re:MP3 Players, too

[identity0]

Whoa, it's not nessacerily legal. Sony may own the actual design or have a exclusive license on it, and it may be a breach of contract for them to sell them to you. In the U.S., inducing someone into breach of contract is illegal. In fact, his friend may get in more trouble than the Chinese factory, since they don't really prosecute for those kinds of things over there.

I find it hard to believe a company as anal and controlling as Sony would not have a exclusivity contract with the manufacturer, even if everything in the player (minus shell and logo) are generic or non-Sony.

And second, TM violations are wrong because you're taking advantage of the marketing, reputation and customer relations of the company you're ripping off. The Sony/Lite-On branding is okay because they have an actual contract/agreement with each other letting them do so. It's not wrong for Lite-On to sell their drives as Lite-On or for Sony to sell licenced drives as Sony; what WOULD be wrong is if Lite-On sold their drives as 'Sony' or Sony sold their own products as 'Lite-On' WITHOUT permission. For one thing, if some of them break (as a certain % inevitably do), they'll end up going to the other company for support and burdening the other company with support and bad public relations.

If the Chinese want the same level of profits, they should try to build their own brand reputations. IIRC, Lamborghini(sp?) was originally a tractor manufacturer, and started making sports cars after they found out Ferrari used the same transmissions in their cars as Lamborghini tractors, and making big bucks(Lire?) doing so. What they did NOT do is start selling cheap knockoff Ferraris. Instead, they worked on their own brand and built up their own reputation.

I'm a big supporter of Free/Open source software, but I strongly believe in protections of trademark. It's what makes companies/brands improve themselves instead of mooching off the reputation of others. I'm really glad Lycoris is trying to win customers over with their own product instead of trying to make it sound like a "off-brang Windows", ie, Lindows. That sort of thing really hurts F/OSS's image among the public.

Re:MP3 Players, too

[Killshot]

That is not the impression i've gotten I am 99% sure that the sony bean is an exclusive sony product.

Now that's an idea...

[Arcturax]

So there is a use for the MikeRoweSoft name after all!

FAKE THHIS

[joe coffee]

Hello
Actually this is a fake Hello. This post also fake. I am typing it on a keyboard disguised as a typewriter. That is also fake. My name is also fake it should read Joe Tea. No wait that is also fake.
This is also fake C YA

So which one is the real NEC?

[tddoog]

This pirated company built existing and new products and business relationships. What if the fake company became more successful?

Just a thought. Seriously though, if I was NEC, I would try and by up the fake company and continue to operate it. you could probably get it for pennies on the dollar and you already have trained employees.

Re:A school project

[lw54]

Assets = Owners Equity - Liabilities

Re:A school project

[kartack]

I'm no legal or finical expert however, wouldn't your 10 000 friend be legally required to pay taxes on their $1 000 000 of stock? I was doing a quick look at the fortune 500 FAQ, market cap is equal to the number of shares times their value as of such and such a date. Therefore, the shares have to actually be worth $1 000 000 or you company will have a market cap of $0. If they are therefore worth $1 000 000, then your friends have each been paid $1 000 000 and would be required to remit taxes on it. Since the stock is really worthless, in that they can't sell it to anyone, they would have to use other sources of income, aka their real jobs, to pay for the tax on that $1 000 000. Good luck finding your 10 000 friends willing to do that. I don't think the taxation office takes "it was a joke" as an excuse for not paying.

Chinese counterfits are excellent

[Oldsmobile]

Everytime I go to China I always buy a ton of counterfit goods. The stuff is quite often of excellent quality, sometimes even better than the original. I am talking about things like shoes, bags, clothing etc.

I am not so sure about electronics and counterfit media, except for movies, that are usually DVD rips. DVD rips actually work better than commercial DVD's as they don't have encoding on them -so no complaints there either.

I heard from a reliable source, that many western companies have been forced to enter the Chinese market by counterfitters presenting them with products identical to their own at trade fairs.

They have the choice of getting into a joint venture, or competing with a counterfitter at unequal terms. Or rather, not much choice at all.

Re:Chinese counterfits are excellent

[Splab]

Actually alot of "pirated" stuff is the real deal, the dealers in China just go have a chat with the foreman of the factory makeing the real stuff and asks for a few crates (thats the penalty you get from outsourcing production - try get a pirated B&O television*).

It's just like crackin, theres no point in bruteforcing the solution, when you can go have a chat with the middleman and have him supply it.

*I'm not sure of their status any longer, but they used to be produced in Denmark.

Re:Chinese counterfits are excellent

[arodland]

"Counterfit" is not a word.

you're one dense amerinigger.

[Anonymous Coward]

nT

Duck?

[pryonic]

If it looks like a duck and quacks like a duck, then it's a duck?

Re:Duck?

[weeboo0104]

NO! It's a witch! Burn her!

Re:Duck?

[MadTinfoilHatter]

If it looks like a duck and quacks like a duck, then it's a duck?

Well, you need to be careful and apply logical thinking here: There's also the possibility that it merely weighs the same as a duck, in which case it floats, and therefore is made of wood. You wouldn't want a wooden NEC, now would you?

Re:Duck?

[bloobloo]

You mean NEC is a witch? Burn it!

Re:Duck?

[Anonymous Coward]

No!
now-days If it walks a duck and talks like a duck
odds are its a chicken in drag

Re:Duck?

[Anonymous Coward]

If it looks like a duck and quacks like a duck, then it's a duck?

Only if its ass is waterproof.

Chain of trusted sources

[RubberDogBone]

I'm a fan of NEC's burners and happily recommend the brand to my friends. Good stuff.

One of these friends said "Wow, I am sure am glad I get my NEC stuff from a reputable online dealer, like Newegg!"

My question is, where'd Newegg get these drives? Did their distributor vouch for the goods? How about their distributor's distributor or the originating factory?

When somebody up the chain said "I _KNOW_ these are good drives" and vouched for them, then that product carried that credential all the way to the end users and that's what we're trusting. But we don't know, really.

"It came from Newegg" might be nice sentiment but Newegg probably has no idea if they were selling fakes or not. I don't think they would knowingly do so, of course. That kind of cheap money is not worth the hassle with an IPO in the works.

Re:Chain of trusted sources

[Detritus]

Counterfeit goods are more likely to show up at retailers that don't buy from authorized distributors. The companies that specialize in inventory liquidations, overruns, excess inventory, etc. They can be fooled by a smooth salesman with a genuine-looking product at an attractive price. Some don't need to be fooled. They know they are selling counterfeit merchandise and do not care.

Re:Chain of trusted sources

[Tweekster]

If the quality seems good and it is simply a good deal and not an AMAZING cant pass it up type of deal a lot of vendors would not even think about it. Or like you said they dont care, and again if the quality is good, there is a reason not to care heh.

Re:Chain of trusted sources

[DerekLyons]

Counterfeit goods are more likely to show up at retailers that don't buy from authorized distributors. The companies that specialize in inventory liquidations, overruns, excess inventory, etc. They can be fooled by a smooth salesman with a genuine-looking product at an attractive price. Some don't need to be fooled. They know they are selling counterfeit merchandise and do not care.

Ever wonder where those eBay sellers get the $NAME_BRAND_ELECTRONICS that they are selling for 1/2 (or less) of the MSRP?

Re:Chain of trusted sources

[shelterpaw]

They probably got them from TechData or IngramMicro. They are the big distributers in the US for most tech manufacturers. You don't see NEC, SONY, Hiatchi trucks running around because a middle man takes care of business and in the US these are the big boys.

wow

[Tom]

Many of these pirated items were not part of the genuine NEC product range.

In other words: The criminal version of "embrace and extend". Plus, of course, it avoids direct comparison which would threaten the appearance of authenticity.

Genius, pure genius.

Also note that the article says the goods were generally of good quality. I wonder if NEC - provided they had known about these before starting criminal investigations - would've simply bought them out instead, expanding its product line at the same time. :-)

Re:wow

[LiquidCoooled]

Why buy them out.
Come under our wing and follow our direct authority and give us all your profits or we turn you scumbags in.

Made in China

[BadassJesus]

They does that all the time, Nike, Adidas, Reebok.. China apparel manufacturers are doing this for years. I am not surpriced to see someone taking this to the next step and pirate a brand in electronics.

Blaim foolish management of U.S. corporations that outsource whole factories to China. What happens? China is then able to duplicate high-end manufacturing itself, rebrand or even steal the brand. First U.S. lose jobs secondly they lose their mindset-technology advantage. What a ripoff.

Wait, it's coming to me now...

[Mille Mots]

True to the /. tradition, the solution for all of GM and Ford Motor Company's woes has just occurred to me:

1. Set up pirate version of their own corporation
2. Order parts from existing suppliers
3. ???
4. Profit!!

--
Sig arrêt

Re:Wait, it's coming to me now...

[Anonymous Coward]

You might as well just kill yourself. It's not funny anymore.

Re:Wait, it's coming to me now...

[Mille Mots]

More accurately, it never really was.

Quite simple

[Oldsmobile]

It is quite simple compare business case number 1:

1) Buy generic mp3 player innards off general market for next to nothing
2) Wrap iPod shuffle lookalike plastic
3) Sell as iPod
4) Profit

Compare with business case number 2:

1) Buy generic mp3 player innards off general market for next to nothing
2) Pay designer to design a cool funky faux iPodesque white plastic exterior
3) Pay huge international marketing firm to make worldwide humongously expensive marketing campaign
4) Rummage through garbage for scraps of food, use cardboard for shelter

Re:Quite simple

[squiggleslash]

You're forgetting a number of steps that I specifically mentioned in my write up:

1) Buy generic mp3 player innards off general market for next to nothing
2) Wrap iPod shuffle lookalike plastic
3) Sell as iPod
4) Profit

Let's insert 0) Raise money for (1) and (2), from investors who need a rough idea of what you're doing. This limits you to organized crime. Congratulations.

Between 2) and 3) you need to insert "2.5) Find distributors for a product who know you're not Apple but will be selling a product branded as Apple, therefore putting themselves at risks of lawsuits. This limits you to organized crime, and they'll be demanding a high margin on the products. Which they'll be selling discounted anyway. Congratulations.

4) needs to be replaced with "Get some money, pay back your investors, and hope you're not caught"

So: to recap: you're having to get your money from people who'll kneecap you if you don't pay it back. Despite the high price of the legit product, you'll be making a tiny margin, if one at all, because you're selling to distributors who will be taking a massive risk and will want to be compensated for it and who don't want to sell for the same price as the legit product, you're restricted in terms of the number of sales anyway. Where's the profit?

Your second example, of the legitimate company, is absolutely laughable. Have you seen Apple's profits lately?

Re:Quite simple

[ultranova]

Let's insert 0) Raise money for (1) and (2), from investors who need a rough idea of what you're doing. This limits you to organized crime. Congratulations.

Um, why ? We are talking about fraudsters here. Why would a fraudster treat his investors any more honestly than his customers ?

Just sell them a plausible business plan that has nothing to do with what you're really going to do, take the money, use it to set up a criminal operation, and disappear one night with the cash.

Why set up a criminal organization if you have a plausible legitimate business plan, you ask ? Because the criminal one has higher profit potential, and simply because the plan is plausible-sounding enough to fool some investors doesn't mean that it would actually work.

If I was going to set up such a risky operation, the last thing I'd want was to have to watch out for mafia debt collectors in addition to the cops. Pissing off the law is bad enough, no reason to risk the wrath of the mob too.

Despite the high price of the legit product, you'll be making a tiny margin, if one at all, because you're selling to distributors who will be taking a massive risk and will want to be compensated for it and who don't want to sell for the same price as the legit product, you're restricted in terms of the number of sales anyway. Where's the profit?

Sell on ebay or some other direct-to-customer marketplace. Have numerous fake identities, some selling "almost new" and others "in good condition" iPods. Traditional flea markets are also good places - there's two permanent ones within walking distance of where I live, and market days (temporary flea markets) happen occasionally.

The last thing you want to do is make a massive sale to distributors that is easy to track back to you. But yeah, if you're smart and not too greedy, you can make a nice profit without too much risk. Of course setting up a company for that would be pretty darn stupid, since it would draw attention...

Re:Quite simple

[Silverstrike]

Simple:

The people that do this ARE organized crime. John Smith, engineering degree from XYZ college, who has a wife and three kids and used to work salary for a legit business doesn't wake up one morning and start a business like this.

No, its Joey Fishhooks who starts this sort of thing. He's already organized crime, and he doesn't bat an eye at dealing with that crowd.

Re:Quite simple

[squiggleslash]

Um, why ? We are talking about fraudsters here. Why would a fraudster treat his investors any more honestly than his customers ?

Because he actually wants the money? He might possibly be able to get away with ripping off a huge number of legit investors once, but he's going to find it increasingly difficult to raise the money if he establishes a pattern of doing this. Realistically, the investors need to be as crooked as the fraudster is.

Why set up a criminal organization if you have a plausible legitimate business plan, you ask ? Because the criminal one has higher profit potential, and simply because the plan is plausible-sounding enough to fool some investors doesn't mean that it would actually work.

No, it doesn't. I just went through that with you. The person who produces the fraudulant goods is going to have to produce them for a much, much, cheaper price than an Apple or Creative would have to do to make any kind of profit at all. Not "What Apple would sell them for if they could only sell the same number as the counterfieter" (which is already much higher than what Apple already sells them for) but "20, 10% of the price of what Apple, who makes them by the millions, sells them for." The wholesale goods are going to be sold to a distributor that's taking a massive risk by taking them on and who can't buy in serious quantities akin to a nationwide distributor of iPods. That distributor is going to want to both offload the devices cheaply, much cheaper than the "real" goods, and want massive margins. The distributor also doesn't want a lot of stock. The profit potential is minimal if not non-existant. You'd be better off not repackaging the MP3 players, but selling them as is. You'll be able to sell them for a higher value per unit than the counterfiets because you can sell to legitimate distributors who will not have to worry about being shut down.

Other than minor savings in the R&D department, that are largely covered by the quantity of sales companies like Apple can engage in that a fraudster can't, you've shown no way whatsoever in which this has a higher profit potential. In the mean time, you pointedly are not addressing the tighter margins and lower volumes that the pirate has.

A counterfeiter is, in the majority of cases, a moron. They will not make anything like as much profit per unit as a legitimate manufacturer, and they're taking a MUCH bigger risk. They're more likely to go bust. They're more likely to go to prison. And they're more likely to get physically roughed up or killed.

Re:Quite simple

[putaro]

Who's raising money? You don't need to. The factory and the suppliers give you credit. You don't need to put any money into R&D (or at least not much) and you're not putting any money into branding or advertising.

You're not selling in the US. There's no threat of lawsuits really. Maybe, possibly, the goods might get confiscated but the odds are highly against it.

It's an easy way to make a buck and it's been going on in the Far East for at least the last 50 years. Counterfeit products are big business. The people buying them usually know they're fake (hey, want a Rolex for $50? If you don't know that it's either fake or stolen you're an idiot). People buy fake iPods because they're half the price so they can afford them but they want something that looks like the real thing not Joe Blow's MP3 player. It's all about the image.

Your second example, of the legitimate company, is absolutely laughable. Have you seen Apple's profits lately?

Yah, Apple's doing great in the MP3 market. Have you seen everybody else's financials? If it's not an iPod your chances of selling an MP3 player are pretty low.

Re:Quite simple

[Minwee]

"He might possibly be able to get away with ripping off a huge number of legit investors once, but he's going to find it increasingly difficult to raise the money if he establishes a pattern of doing this."

And yet, somehow, this guy still has investors lining up to dump money on his long running scam and these guys still seem to receive millions of dollars in venture capital, possibly from the Tooth Fairy who is at least as real as the product they have been hawking for the past four years.

I think you may be overestimating the intelligence of people who have money to invest. It seems that they are nowhere near as clever as we would like them to be.

Re:Quite simple

[C0vardeAn0nim0]

serial fraudsters have existed since money apeared.

the world is incredibly big, with millions of potential small inverstors willing to put money on a sure-fire business plan. defraud a group of small investors. pocket the money. move to another town with a new identity. rinse, repeat.

in the case of iPod knockofs, you only need to defraud a bank ONCE. after you bought the first batch of fake iPods, the profits from it will pay for ne next batch.

selling it is also not a big deal. here in brasil there's thousands of mom and pop shops operating in galeries on the ground floor of comercial buildings specialized in selling grey and black market goods for cheap. this kind of commerce is paraguays largest "industry". so there's plenty of market ready to consume falsified goods, and for everyone the authorities bust, another one opens across the street.

the people pirating NECs brand built such an operation because the market for their fake products _already existed_, they didn't had to convince their distributors of anything.

Re:Quite simple

[Anonymous Coward]

Let's insert 0) Raise money for (1) and (2), from investors who need a rough idea of what you're doing. This limits you to organized crime. Congratulations.

First, investors can be lied to. Second, people make good money working with organized crime.

Between 2) and 3) you need to insert "2.5) Find distributors for a product who know you're not Apple but will be selling a product branded as Apple, therefore putting themselves at risks of lawsuits. This limits you to organized crime, and they'll be demanding a high margin on the products. Which they'll be selling discounted anyway.

You really should educate yourself instead of spouting bullshit. There is a reason that counterfeit goods are so common. It's a big time money maker for the perps. You clearly do not grasp the scale of the problem. You could go into many legitimate retail stores near you today and find counterfeit goods being sold.

Re:Quite simple

[DerekLyons]

Between 2) and 3) you need to insert "2.5) Find distributors for a product who know you're not Apple but will be selling a product branded as Apple, therefore putting themselves at risks of lawsuits. This limits you to organized crime, and they'll be demanding a high margin on the products. Which they'll be selling discounted anyway. Congratulations.

Nah. Just get yourself a couple of dozen eBay accounts and sell 'em direct.

Re:Quite simple

[Fulcrum of Evil]

hey, want a Rolex for $50? If you don't know that it's either fake or stolen you're an idiot

$50? You paid too much. For $30, you can get one that does the constant sweep motion that Rolex is famous for.

Re:Quite simple

[Grishnakh]

The people that do this ARE organized crime. John Smith, engineering degree from XYZ college, who has a wife and three kids and used to work salary for a legit business doesn't wake up one morning and start a business like this.

  No, its Joey Fishhooks who starts this sort of thing. He's already organized crime, and he doesn't bat an eye at dealing with that crowd.

Maybe there's some crossovers:
John Smith, with engineering degree from top-ranked XYZ University, works salary for a legit business. One morning, he wakes up and realizes he's put in a lot of work for a pathetic salary, year after year of "Your work was great, but there's no money in the budget for a raise for you. Sorry. Maybe next year. Oh by the way, sorry, but the great product design you worked on all year is being canned.", while his neighborhood garbageman is making the same salary. Then he realizes that through his contacts in China, and his EE expertise, he could design iPod shuffle knock-offs and have them manufactured in China for pennies on the dollar, and his old friend Joey Fishhooks from high school might know how to make a (illegitimate) business out of this.

John and Joey team up, make Shuffle knock-offs and sell them on Ebay for a huge profit. Just before the Feds catch up to him, John moves his family to beautiful Costa Rica and lives a life of luxury while the Feds wonder where he went to.

Re:Quite simple

[GWBasic]

This really isn't business case 1, because they aren't faking just one product. They're faking an entire brand! Specifically, in addition to iPod, they would be selling fake Macintoshes, fake Apple monitors, and a few other fake Apple products that they don't even make.

This really is a case of starting a consumer goods company that just uses someone else's trademark as a way of avoiding advertising costs.

Re:Quite simple

[allroy63]

Squig, I think there's still a few logical leaps to your argument:

You say:
Let's insert 0) Raise money for (1) and (2), from investors who need a rough idea of what you're doing. This limits you to organized crime. Congratulations.

What you're not considering here is that the smart legitimate investor is probably not going to throw his money behind yet another generic mp3 player in an already saturated (and clearly brand name dominated) market. Yes, there are those of us in the slashdot community and others at large who are buying generic mp3 players because they are hackable, cheaper, or offer some minutae of features that the vast number of consumers don't care about. Why would any "legitimate investor" be compelled to provide the supporting captial to market a product that doesn't appeal to the vast number of consumers? Most (and I emphasize most because I don't mean ALL) consumers of MP3 related products are seeking the brand name commodity- we're really talking about the difference between the "Walkman" and the 20 dollar portable cassette player of the 1980's. Brand names and marketing are part of consumer culture and social identification. If you don't believe me, look to the fashion industry or consider how many people you know who called you up on Christmas morning to tell you "Not only did I get an iPod video, but it's BLACK!" Marketing has a TON to do with success of a product, and the pre-existing dominant forces in the mp3 player market will make investors less likely to back a generic product. To suggest that at this point a new "legitimate" entity with no prior association with consumers could enter the market with a new product and succeed is somewhat foolish.

You also say:
Between 2) and 3) you need to insert "2.5) Find distributors for a product who know you're not Apple but will be selling a product branded as Apple, therefore putting themselves at risks of lawsuits. This limits you to organized crime, and they'll be demanding a high margin on the products. Which they'll be selling discounted anyway. Congratulations.

The problem here is that you're completely discounting the situation at hand. This group of pirates established themselves AS NEC. You imply that each and every one of the distributors KNEW that they weren't working with the "legitimate" NEC. Given the fact that this investigation has turned up a "replica" of the company, right down to official memos, letterheads, documents, ID cards, etc., how does your explanation that the only people involved in such practice are organized criminals? Is it not also possible that small mom and pop shops who meet with a legitimate looking NEC sales representative (who appears to have all the credentials one would expect) to be duped into purchasing products from an illegitimate source?

Finally, you conclude with:
Your second example, of the legitimate company, is absolutely laughable. Have you seen Apple's profits lately?

Absolutely sir, Apple has huge profits. They also have over two decades of consumer history and influence under their belts. They also market their products to be "cool" and have been associated with "coolness" for quite a while. When your friend (regardless of computer experience) sees you with your new iBook and it's shiny white aerodynamic design and the apple logo clearly displayed across the lid, he/she notices it. This is not the phenomenon someone experiences when they purchase a Dell/Sony/IBM-Lenovo-Whatever/HP machine. My point here is that the fact that Apple is successful doesn't grant weight to your argument - it only illustrates the existing roadblocks any new entrant into the market must surpass to be profitable. Point me to a new start-up organization that has been able to conquer an existing technology market and I will be more than glad to rescind this argument and award you with many gold stars.

I'm not saying that what these guys are doing is defensible, but their business plan (while illegit) certainly makes for a profitable venture that allows them to avoid the hurdles of the market...

Re:Quite simple

[SurfSlade]

Distribution is the easy part.
Send Everything to Dubai, that's the global market place for counterfeit product.

Re:Quite simple

[Anonymous Coward]

Just before the Feds catch up to him, John moves his family to beautiful Costa Rica and lives a life of luxury while the Feds wonder where he went to.

Because they never do. Just like capitalist, they made some money, and see a way to make more. If we do this another six months, then we can ritire to a Villa in Costa Rica. Then its a Villa in Cazumel. Then they want the private Yacht for junkets. And then the Feds knock on the door.

Ever know a guy who made just 1 drug mule run to pay for this semesters colleg ebill? I knew a few who started that way, and 2 years later were spending 5-10 years in a Georgia jail.

Re:Quite simple

[Grishnakh]

Yeah, but once John has made enough money to get out of the country and buy a villa in Costa Rica, this doesn't mean he has to give up the fake iPod business that he and Joey have set up. He can keep having them made in China, and have them directly shipped to buyers in the US. Or maybe he and Joey can find another person in the US to take the risk of receiving the large shipments and sending them out to buyers, while John and Joey do all the other work, like designing the next-generation fake iPods, traveling to China to meet with the manufacturer, etc.

OT: New catchphrase

[SpaghettiPattern]

Honey, fake me a company

Format of text

[brunes69]

This article has the            ere is no need to
most hard to read               create a stupid column
format for the text             based layout. These
I have ever seen. The           guys should be shot.
web != the newspaper, th-

Re:Format of text

[Anonymous Coward]

Your justification has failed it!

Re:Format of text

[utexaspunk]

I kind of like it. The line lengths are short, which makes it easier to read because your eyes don't have as far to travel from the end of one line to the next, which makes it less likely that your eyes will land on the wrong line. Having multiple columns takes advantage of what would otherwise be white space or unrelated information and it minimizes scrolling. The IHT have put a lot of thought into their website- I think it's one of the best-designed news sites online.

Re:Format of text

[Anonymous Coward]

maybe if you were like me and you had to read tens of thousands of pages of technical information a year you would also realize that unlike a piece of paper a computer monitor does not have a stable image and has a finite resolution learning this you would find it incredibly irritating when web designers place about 150 characters per line in a font which is not a fixed width seemingly running way off the right edge of the page without justification causing me to scroll and making me nauseous as this example shows the lack of proper column width a serif font and poor paragraph spacing and indentation makes it so damn hard to read that you'll probably just give up

Re:Format of text

[bigmouth_strikes]

I strongly disagree.

The International Herald Tribune has had this layout for several years and were pretty early adopters of using dhtml to allow the readers to save articles and also modify the size and format of article text.

Anyway, the wide 3-column format usually allows for much more text than the traditional one-column variant, at least with the wide margin that the latter comes with.

Re:Format of text

[DavidD_CA]

No kidding! This is dumb for two very important reasons:

1) You can't copy-and-paste text from the article, unless what you want happens to be at a non-clickable column. This is dumb because if someone wants to cite their article in another work, they will just get frustrated and find another article.

2) Unless you're running some crazy-high resolution, you have to scroll down about 100px to see the bottom of the columns. This means you have now scrolled the ad banner at the top of the page off the screen. If I were that advertiser, I'd be quite pissed.

But then again, since when have traditional papers made the transition to web in a smart way?

Re:Format of text

[testerus]

I disliked it as well, when I used the textzoom of firefox, text got cut off. Fortunately nowadays the layout is defined by a stylesheet and can be disabled:
Konqueror: View / Use Stylesheet / Basic Page Style
Firefox: View / Page Style / No Style
Opera: View / Style / User mode

Re:Format of text

[nasch]

I actually liked the format; what I found funny is that the next/previous page buttons would highlight and then actually work when my pointer was halfway up the text, inches away from the button. Did anyone else see that on Firefox?

Re:Format of text

[JofCoRe]

what I found funny is that the next/previous page buttons would highlight and then actually work when my pointer was halfway up the text, inches away from the button.

heh, yeah, that's pretty neat. Looks like you can click anywhwere in the column of text and it'll take u to the next page. Actually kinda convenient... don't have to move the mouse down to the button after reading, just click anywhere in the column of text! Not sure if it was intentional or not, but interesting nonetheless :)

So what was the problem?

[nordee]

"In the name of NEC, the pirates copied NEC products, and went as far as developing their own range of consumer electronic products - everything from home entertainment centers to MP3 players. They also coordinated manufacturing and distribution, collecting all the proceeds.

The Japanese company even received complaints about products - which were of generally good quality - that they did not make or provide with warranties."

So what's the problem?

Brought to you by the letter Arrrr!

[Anonymous Coward]

Aye maties! Here be the pirate alphabet!

Pfft. I know a genuine Panaphonics when I see it..

[narkotix]

And look, there's Magnetbox and Sorny.

DVD players

[ArsenneLupin]

As far as DVD players are concerned, the "fakes" are probably superior to the "originals". Here's why:

The "fake" NEC is not just a shoddy backwater pirate, they put quite some effort on the scheme. They didn't merely copy genuine NEC products, but did their own research, came up with new models with better features, etc.

The only thing they didn't have, is deals with the content industry that restrict what kind of features they may offer to their customers. Unlike a real company, the fake NEC had no reason at all to honor CSS, HDCP, ... or any other kind of annoying DRM. However, they still had an interest of pleasing the customer.

That's nothing,...

[Yewbert]

...there's a place near here that's doing the same thing with a whole industry/product line - couterfeit food. Luckily, they're easy to spot, all being labelled with a big bright yellow M,...

Re:That's nothing,...

[dbolger]

Wow, you live near a McDowell's too? :D

Re:That's nothing,...

[PayPaI]

Fake Eggs

Reformatting the text is possible

[tepples]

To get a slightly more traditional web format on IHT articles, look for "ARTICLE TOOLS" on the left and click "CHANGE FORMAT".

The next level in corporate deniability:

[Aim Here]

Of course, once this 'faked company' meme has taken hold, the multinationals will exploit it to the full by making sure all their outsourced third world factories and production centres can be turned into 'pirate' factories at short notice:

Bleeding heart liberal type: You're running sweatshops and paying 12 year olds 10 cents for an 18 hour working day! You're pumping toxic chemicals into the drinking water supply! You're making defective products that explode and kill people! You bribe politicians!
Your factories are run by fascist thugs who hire death squads to kill union organisers! And we have proof this time! You're going to jail at long last!

CEO of MegaCorp, your friendly neighbourhood planet-raping multinational: Errr umm ... that's not us! Yeah, that's it! They're a bunch of pirates who made a fake MegaCorp factory! We've never seen those guys in our lives! Officer! Arrest that factory! Secretary - type me up a shoddy-looking forgery of our licensing agreement. "Fake" factory workers - You're all fired! Back to unemployment and poverty for you!

Third World Workers: Sigh. Shafted again...

Cisco suffers a great deal from this

[puzzled]

    A WIC-1DSU-T1-V2 is $1,000 list, $700 or so to a small reseller in distribution, and $400 for a clean used unit from a reliable aftermarket dealer. Go look for that part number on Ebay and check out how new boxed product is 15% of list price ... this stuff is everywhere and it basically drove me out of the Cisco aftermarket.

Re:Cisco suffers a great deal from this

[Anonymous Coward]

    It would seem the trade journals are starting to notice this problem as well:

http://www.computerworld.com/networkingtopics/netw orking/story/0,10801,110978,00.html?SKC=networking -110978

because the playing field is not level

[Anonymous Coward]

you act like these pirate companies just 'sprang up' and somehow did a buch of work to copy NEC. actually most 'american' companies just outsource production to china, which means lots of people in china know exactly how the products are made, distributed, etc.

they didnt have to 'create' a whole hell of a lot, other than company letter head, telephone lines, a few signs, etc.

so if they are so skilled at business, why not set up their own company?

easy answer: they dont have access to the supply chain that will get them in to target, wal-mart, best buy, etc, and they dont have the clout, and furthermore, they would simply get sued for copyright infringement, etc.

not to mention the unknown corrupt practices of the chinese government, which may or may not have special deals with american companies that preclude certain types of competition from existing in the open.

you say 'why dont they play fair'? because they wouldnt be allowed to.

That explains it....

[Anonymous Coward]

Now I know why my new DVD player came with a certificate for free WoW gold.

Anonymous, of course...

[Anonymous Coward]

You may not know about it, but there's also a *huge* market (I'd estimate it at over $50,000,000 per year) in North America to buy Chinese pirated goods. The last one I observed was an very well pirated (down to the silkscreen on the circuit board) satellite receiver of a famous brand name. With 1 or 2 repairs, these fakes were, in fact, BETTER than the originals (higher quality heatsinks, better quality power supplies, better quality tuners).

It's ridiculous that China can not only nowadays produce knockoffs of incredibly complicated electronics, but that they can not only knock it off but also improve it is incredible.

Sometimes these electronics, if the manufacturer is playing it safe, carry similar, but slightly different brand names to the originals. Eg: "Sorny" instead of "Sony", etc.

(AC for a good reason)

Why NEC?

[RareButSeriousSideEf]

Personally, I would have picked a sexier brand to counterfeit.

That's all; it's back to stamping Logitech nameplates for me...

wow

[seventhc]

wow, thats amazing, but I really don't understand the reasoning. I mean if they are going to go through all that trouble to get everything set up, why not just start a legitimate company and do it legally.

The Yes Men

[Brackney]

This is news? The Yes Men have been doing this for a long time. http://www.theyesmen.org/ Pure genius. :)

Japanese did exactly things many years ago

[deconvolution]

This is a totally ridiculous story! Japanese have been well-known about industrial spies for many many years then they received what he sent.

Just an example, before 1980s Japan was pretty crap about Chinese medicine making and China manufacturing. They just sent lots spies into China for "technical disscussion". Nowadays, the market share of Japanese is far bigger than Chinese without paying anything.

Yes, I took a brief look about a ripped Ice Age 2 from my friends yesterday. But I would never watch such film even if they only charge me a penny. I believe most Chinese people would still never go to cinema if there is no such DVDs. How f***ing hollywoods can account such cases into their "losts"?

From my point-of-view, nothing wrong about Chinese people do, it is a kind of fair trading and knowledge sharing good for everyone. Linux never make programmers in the U.S. become poor or retired but MS/HP/... do (by outsourcing). IP is pretty bad since it has been abused.

Re:Japanese did exactly things many years ago

[MooseTick]

"Linux never make programmers in the U.S. become poor or retired but MS/HP/... do (by outsourcing). "

Perhaps that is because you don't have to outsource free labor? I don't see how you can blame outsourcing on MS and HP. If you work for free for MS or HP I bet they'd keep your job here also.

Chinese learning capitalism well

[doesnothingwell]

A close relative told me the company he works for has an a little secret that no one talks about. Seems after setting up a partnership with a chinese company to outsorce production (eliminate local jobs) they went to china to further the deal. Production lines were seen, hands shaken, and everthing was going along nicely. Before getting on the planes to go home someone had to return to the "factory" for something they forgot. It sould seem that thieves had made off with the workers and were taking down the "factory". I don't think the theives got too much money, but today no one at X corp. will mentions foreign investment without a quick look and a cautionary tale. Probably just a story told by the middle management to explain a lack of ambition, maybe. Ahh capitalism... don't ya just love the smell?

Fake

[ZenKen]

It's ok. We have fake CEOs, and CEO/CFOs who make fake profits.

Re:A school project

[Anonymous Coward]

You can't give everyone $1,000,000 worth of stock in a company worth $0...

Fake Slashdot, too...

[Maljin Jolt]

In China, they have a fake Slashdot, see slashdot.cn, registered to jesse.webmaster@gmail.com. The website even keeps crashing my firefox-1.5.0.2 on linux box.

Re:Fake Slashdot, too...

[qwertyatwork]

At work we use explorer. It redirects me to a site called solidot.org looks like /. but its in chinese. Looking at the number of poll options, it doesnt look to be /. in chinese.

Since when was it possible to steal IP?

[Anonymous Coward]

I thought TFA was quite interesting, that's a pretty savage burn those pirates have been pulling on NEC, so big I have to respect the sheer scale of it.

However I'm disgusted by the reporter and his choice of language. How many times does he mention stealing IP or IP theft. Does he not understand IP at all? You can infringe IP but you can't steal it as in order to steal something you have to be removing that possesion from the legitimate owner. Copying a CD, movie, blueprint for a design, patent or corporate logo don't do this, however they can infringe on someone's rights - an entirely different kind of misdemeanor. That's why we have IP law.

Of course Richard Stallman might say that the idea of IP in itelf false, we have 3 seperate types of law, copyright, trademark and patent to cover these things and to present them all as one is dissembling however I'm assuming for arguments sake that IP does exist.

The MPAA and RIAA are equally bad for this. There is that cinema trailer that say's very boldly that "Piracy is theft". I'm sure the MPAA are aware that this is simply untrue... I wonder if I can complain to the advertising standards about that here in the UK?

Why Not? Name Brands Don't Manufacture

[stealie72]

Now that name brands are pretty much all set up solely for R&D and advertising, I'm surprised this doesn't happen all the time.

Back when an NEC-owned factory made NEC brand products, this would have been impossible. Now that NEC gets all of its products made for it by another business, what's stopping that business from selling the same product to somebody else, with or without the NEC.

Take apparel for example. Nike designs and markets a shoe. They send the specs to a factory in china and order 10,000 pairs. What's stopping the factory from ordering enough raw materiels for 12,000 and selling the remaining 2000 on ebay, or to shady retailers? If nike finds out, they'll probably never do business with the manufacturer again, but if the manufacturer doesn't get greedy, they might be able to skim 20% for years. And they get all of nike's profit.

Re:A school project

[Sique]

They are worth $1,000,000 if they get traded for $1,000,000. So let someone sell his share for $1,000,000 and buy it back for $1,000,000. Here we go. Low volatility in the stock though... Two shares traded (the same twice).

THAT'S the NEXT STEP?

[AlgorithMan]

What happens when pirating a movie, an application, or a game is not enough for you? Well, you take the next step ...

you say that like faking companies was inevitable for movie, app and game pirates... they'll all fake companies sooner or later

why don't you say "what happens when shooting enemies in first person shooters is not enough for you? Well, you take the next step and kill lots of pupils"? thats the inevitable next step for every FPS player (at least according to some retarded politicians on voter-hunt...)

Faking a company?

[TheWizardTim]

That's nothing, right now we have a dictator faking a democracy in the US. Beat that pirates!

Re:Faking a company?

[Anonymous Coward]

Boy, the hate and venom just spew out of you. You really shouldn't let it eat at you like that.

Maybe you should move to some other country where you wouldn't have to suffer under such horrible oppression; like China, Syria, Iran, or North Korea. I'm sure you would be much healthier and happier.

you forgot 5)

[argStyopa]

in the first case
5) remain immune/invisible to litigation and persecution by the MPAA and RIAA for piracy

in the second case
5) be declared an international pariah contributing to the wholesale destruction of the entertainment industries because of your mp3/movie player, be sued by xxAA shills in every civilized state, and eventually have the black helicopters hunt you and your family down as "pirates".

Re:you forgot 5)

[bloobloo]

Assuming you're in America. If you're based in China you don't care.

Next step in preventing piracy

[Intron]

Use javascript to prevent copy/pasting your article to /.

Why buy?

[Excen]

Why bother buying up the fraudulent factories and warehouses? NEC can just sue the organization and force them to turn over their illegally-gained assets, thereby getting all the benefits of a takeover without actually divesting any capital except for lawyer fees.

so cool!

[Anonymous Coward]

i'm going to setup a fake telco company
using the teleco name of the biggest teleco
here in thailand "TOT". should be fairly simple
to be the acctuall ligit firm in a few months once they notice,
considering the at-this-time-"real" company operates like some
pirated/company. :)

Re:A school project

[kartack]

I think that one is easy to solve. Give each person 1 000 000 shares each valued at $1. This is easy and cheap to establish. I trade you one share for $1. Then you trade me one share for $1. Therefore we both have $1 000 000 worth of stock. I'm not 100% that this actually works but I do believe it does. My original concern though still holds I think, each person would have to pay personal income tax on their $1 000 000 of income, in most countries that would be a pretty huge amount.

If you can't beat them, acquire them

[FooAtWFU]

Random crazy idea. They should buy the counterfeiters out for a nominal sum in exchange for dropping the charges. If it's that well-organized...

fake iPods

[peter303]

The press was showing off fake iPods last week. Similar looking case, but someone else's stolen off mp3 software.

Re:fake iPods

[Synic]

they're called mp34's and they're being sold in Hong Kong and Japan's Akibhara (sp?)... in addition to that you can find them on eBay. They look similar to the Nano's casing but the software is more akin to that of the iRiver stuff.

Hey...I now the company they are talking about...

[GoChickenFat]

I think the name of the parallel company was Packard Bell... LOL

Faking slashdot

[rayver]

Speaking of which, there's also a Chinese group trying to fake slashdot: http://www.slashdot.cn which redirects to: http://solidot.org/

Holy Noodles!

[Anonymous Coward]

What are you? A Pastafarian fundamentalist?

If only

[soft_guy]

If only you could get someone to pirate just the technical support part of your company!

Re:A school project

[Anonymous Coward]

Your idea doesn't work.

First of all, you need to incorporate. That costs money.

Second, if you sold shares to 10,000 people the SEC would be on your ass because you didn't register with them (which you are required to do when you do a public offering). If you do register, that is whole lot of money for lawyers and investment bankers.

Third, you can't give shares for free if they have a value, it is considered corporate waste.

Fourth, if you use your $1 par shares and give them away for free, it creates an obligation on those who got them for free to pay up the difference between par and what they paid. This means you could now collect $1 per share from each of the people you gave the share to. Who would voluntary accept these "free" shares if they came with a legal right to demand payment. This right can be exercised by others, too.

Fifth, since your corproation has no captial, you are instantaneously insolvent. This creates yet more legal problems.

Sixth, you cannot be listed on a stock exchange until you fulfill certain capitalization requirements. It won't happen without a good product, a couple of VC's helping out, and a whole lot of hard work and luck. Without being listed on a stock exchange, you are not going to make it onto any lists, because nobody knows you and your numbers can't be verified.

Seventh, there is so much more wrong with your idea, it would take me another hour to write them up. But I think I made my point.

In conclusion, your idea is like a musician deciding to build a space shuttle "because you can just buy LEGO and build it really really really big. I'll just talk to some engineering professors to make sure it doesn't collapse." Ridiculous.

Yarrrr!

[TubeSteak]

Damn all sweet water pirates to hell!

Arrrr, us pirates of the bitter water will take much pleasure in sending those sweet water bastards to hell.

Identity Theft

[equivocal]

Hope NEC has as much success clearing this up as individuals do.

Confused

[Midnight Thunder]

So is the one with Sony label a fake or the one without the Sony logo?

Re:Confused

[Killshot]

basically they are the same product, they are just willing to make extra ones and sell them to people for considerably less than what sony charges for them

Re: It is known

[Abreu]

Extraordinary profits justify extraordinary risks, just ask any venture capitalist

I wonder...

[rvolz]

I wonder if you could fake a government... Oh, wait! I live in the USA - we've got that already! My bad!

Paging !

[mdecarle]

TFA sure is a crazy implementation of paging!

Now that's what I call piracy!!

[menace3society]

I want to set up a corporation doing the exact same thing, but instead of basing in East Asia I'll base it on the high seas. Arrrr!

No need to fake according to Federal Reserve-10hrs

[NRAdude]

According to Federal Reserve, they measure unemployment on the US population that if anyone is in business for at-least "TEN HOURS PER WEEK" then a "person" is considered em-ployed.

I find this a verry misleading concept on what is a "ploy" and whatnot. Especially misleading is the unemployment statistic being used as a measurement of productive work; By that FEDERAL RESERVE code, anyone that awakes for the Day, apply grooming and hygiene principles, prepares their own meal, washes their clothes, have already attained qualification to the 10-hour FEDERAL RESERVE code that they are an employee/employed. Given this fact, I think it is possible that more fearful truth is not being told; what does the economy truthfully appear? It could be worse than Mexico, but none knows because FEDERAL RESERVE only has lawful jurisdiction within that District of Columbia and wherever its DEBT NOTES move, not the neighboring Washington's District of Columbia.

I can't show where the quote came from: I'm not at my filing cabinette, not at my main console with SCSI RAID HDD array that holds the file that quotes their Code. (I'm posting to SLASHDOT at a mere wireless network location with an embedded mini-computer)

The Code isn't appearing on Google and Yahoo, not like we can trust them with reliable search anymore though. Can someone bring this forth?

Google showed a similar quote from some idiots at TEDNUGENT.COM, but that's just dross IMHO.

Network Redundancy Administration,
M. Gregory Thomas(tm)

Legal reasons?

[freakmn]

From the article: NEC declined to identify the companies for legal reasons.

I bet that the companies involved were NEC, NEC, NEC, and NEC. It seems pretty obvious to me.

Slightly off-topic: Do you pronounce the name of this company as 3 letters: N E C? Or as a word, neck? I remember working in IT with a guy who pronounced the company as "neck", and it confused the heck out of me for a while. After I was there only a few weeks, he asked me to check out his new neck, and how clear the picture was on it. I couldn't figure out what he meant, and if I should report him to HR for harassment, but then he pointed at his new NEC monitor, and it came clear.

in other news....

[indy_Muad'Dib]

Cmdr Taco sues Digg for counterfiting Slashdot.

news at 11.

What you did not know

[Trubbel]

Now what you did not know is that this NEC brand conducting the investagion into a pirating NEC brand is _actually_ the second NEC brand! They are the ones pirating the NEC brand. You wouldn't know it, or really have any way to verify it of course, since the NEC brands have run parallel NEC brands all this time... Additionally the pirating NEC brand who is (unfairly?!) accusing the real NEC brand of pirating their NEC brand, is the one with the better NEC products!!! OMG teh sHitZ hit's the fan!!11!one

In Soviet Russia

[Anonymous Coward]

company fakes YOU!

Re:MP3 Players, too Hmmm Play Station, anyone?

[davidsyes]

Hmmm, this is probably how the Play Station was duplicated. If not, then somebody had a LOT of nerve...

I don't remember if it was on /., but I sometime around last year read that Sony was knocking their head against the wall trying to figure out where units causing high sales volumes but with not cashflow traceability were coming from. Apparently, there was a WHOLE COUNTERFEIT factory in full-swing operation, building and shipping them off. Reminds me of the counterfeit KFC once found in China. Right down to the meat and logos and uniforms.... People called in to verify a franchise and the loc wasn't on the books...

Hmmm... /. imageword "article" funny, considering this "article" is about "counterfeit articles"... heheh

Re:A school project

[Eivind]

Not really.

Something is worth what you can get for it. What someone else once "got" for it at some point in the past is only tangentially interesting.

Swapping equal shares is a no-op in most cases anyway, shares tend not to be numbered anymore, so it's not really possible to swap identical shares and have anyone accept that a trade has taken place.