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On Sundays, Gothamist posts opinion pieces about issues relevant to life in New York City. If you'd like to write one, email us! The opinions expressed below belong only to the author.
I was walking down Canal Street yesterday when I noticed this sign, taped to the shuttered gates of a store just off the corner of 6th Avenue. If you have trouble reading fine print, it says the store was shuttered for "the open and notorious sale of trademarked counterfeit merchandise." I was amused, because not three feet from the sign, a guy was selling pirated DVDs out of a cardboard box for $5 a piece, and in front of the building next store, three guys were doing a brisk business dealing Prada and Gucci handbag-knockoffs. Clearly, the current NYPD policy of dealing with counterfeiters is not working.
What then should the city do? It seems to me that we have two choices: either get serious about cracking down on the people that distribute and sell these goods, or give up on criminalizing counterfeit goods and simply regulate their sale. The first solution is obvious, but difficult to put into practice. It would require the NYPD to do constant sweeps up and down Canal Street and other popular counterfeit retail locations, and this would most likely just push the activity somewhere else in the city. Lots of money would be required to prosecute all the offenders, and the city would probably need to start locking up tourists to encourage people not to purchase these goods. That might not be in the interest of the other businesses in Chinatown, who benefit from the foot traffic.
The first solution fails largely because it is almost impossible to disrupt the supply of (and the demand for) counterfeit goods. As long as people want to buy crappy DVD copies of current movies, and poorly sewn imitation designer bags, black-market businessmen are going to find a way to satisfy this demand. Cracking down on this activity just pushes the behavior into the criminal realm, where distribution is controlled by gangs, and profits can be used to fund other criminal activity. We've seen this all before with the criminalization of drugs: people who want to smoke crack still find it very easily, and our society pays an enormous price for criminalization in the form of legal system costs and ancillary crime.
What if instead of criminalizing counterfeit goods, we simply regulated their sale? The government could set up zones in which counterfeit goods could be legally distributed (how about Canal Street, between Sixth Avenue and the Bowery?) and tax and license all the people that sell there. This would earn the city tax dollars that could be spent fighting more serious crime. Legal businesses would slowly replace the shadowy distribution networks that we have now, and crime related to counterfeit goods would go down. The brands that produce the original goods wouldn't be hurt (because counterfeits will be distributed whether or not they are legalized), and they could even be brought into the system-- perhaps some of the license and regulation revenue could be directed back to them. In short, we could create a market solution to a market problem.
Of course none of this is likely to happen anytime soon (at least in New York!), but it's worth considering. Our current system of counterfeit regulation simply is not working, and if we do not consider alternatives, everyone in the city is the worse off for it. Do any of you have a better idea?
Jake is the publisher of Gothamist. The only counterfeit item he has ever purchased was a DVD copy of the Matrix Reloaded. He was disappointed with the quality of the copy and the original film.
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I don't think it would be legal to regulate counterfeit goods because making them is in itself a violation of the real companies' (gucci, prada) copyrights on the products. so the police would be complicit in a crime.
the idea reminds me of a law that 11 states have actually enacted termed an "illegal drug tax". the concept was that one possessing illegal drugs could anonymously pay a tax on them. needless to say, the response wasn't overwhelming.
That's a pretty stupid idea.
Not only is the sale of counterfeit goods illegal, but as you may not realize, it's also illegal to buy them or transport them across state lines. ALL counterfeiting is a matter of FEDERAL law, so your contention that this is the NYPD's fight is silly and uninformed at best.
In fact, the Department of Homeland Security and the FBI bear ultimate responsibility for control of counterfeit goods in the US, and Interpol is the international organized tasked with this charge. This is because the people who ultimately end up profiting from their sale include organized crime and terrorists. If you don't believe me, check this out: http://wwwa.house.gov/international_relations/108/nob0716.htm
And a little bit closer to home, check out the "organizations" benefitting from some Canal Street-type sellers of fake handbags and other items:
http://www.ice.gov/graphics/news/newsreleases/articles/060404newyork.htm
last but not least, bear in mind that a lot of these counterfeit items such as handbags and clothes are manufactured using child labor.
So, before spouting off in your blog about how maybe something like this should be legalized, I suggest doing a bit of research on the subject. If you're okay with supporting terror cells, child labor, and organized crime throughout the world, you're certainly not alone--but I somehow doubt that's really your contention?
So what is wrong with the half-assed enforcement we have now? Why legalize counterfeits?
Unlike drugs, few people really care that counterfeits are being sold.
The idea of legalizing the sale of counterfeit goods is laughable. Protection of trademarks, copyrights and patents is the cornerstone of a market economy because without it, the incentive to create gets destroyed.
Also, by suggesting that the city could use this as an opportunity to gain tax revenues, you turn NYC into a partner in committing copyright infringement.
what a dumb idea. there are so many things wrong with this, its not even worth listing.
As long as Big business wins who cares about the dead guy shot by the NYPD during a counterfeit operation, right?
Nothing will change because no one wants it to change, there's too much money in it on both sides.
The cops, Dept of Homeland security, the trademark lawyers, it's a cash cow.
I'm good with the half-ass enforcement we have now. It seems to be working.
Re: terrorists! child labor! organized crime!-
Save it.
I know you're upset that an exact copy of your $2900 status-symbol handbag can be had for $40 on canal street, but I'm willing to bet that you don't check out the labor practices in the louis vuitton factory before you make your purchases.
With respect to "ties to organized crime;" no shit. Selling counterfeit handbags /is/ the crime they're organizing. Not exactly drug dealing or prostitution.
As for your "terrorism!" charge, I'm sure there are plenty of ways for al Quaeda to make money. Shuting down the fake fendi merchants on canal won't prevent another september 11.
Look, you don't buy a fake on Canal street instead of the real thing. If you've got money like that to waste on a bag, you're going to go for the real deal. If you want the look but wouldn't think of spending $2100 on a handbag, you buy one on Canal street. If canal street doesn't have what you want you don't go 5 blocks uptown to the boutique and buy the real one.
The only people hurt by bootlegged handbags are rich women who are pissed off that poor people can have their expensive status symbols. They shouldn't worry. Anyone who noices status handbags will be able to tell what's fake and what's real.
Say what you will about counterfeit goods, there's just no way to avoid it. In Beijing, the Silk Street Mall, which is an entire mall dedicated to selling fake luxury items, was sued by various brands (Prada, LV, Chanel, etc.) for copyright infringement. How do you sue a mall? You sue the landlord. The luxury brands lost and the landlord was ordered by the Chinese courts to pay a (laughable) sum of 12,000 USD to each company. The next day, people went back to Silk Street and discovered that it had not changed a damn thing; the stalls were still selling fake goods.
In Shanghai, during the international film festival last year, the local government cracked down on fake DVD sellers, closing down all stalls operating in pirated material. After the festival was over, all the fake DVD sellers were back in action, selling more than ever.
Whether it's in China or Chinatown, fake goods are here to stay... You can pass all the laws regulating this but as long as there are people willing to buy, there will be people willing to sell.
Counterfeiting is a dirty business. It hurts Americans and New Yorkers especially hard. If anything, our city should have the toughest laws since New Yorkers have the most to lose from the trade. My wife is a handbag/accessories designer and plenty of people in her industry are hurting because of these crooks on Canal Street. What makes it worse is that we live right across the street from a very large counterfeit retailer in Tribeca. The landlord (Ray Abramcyk) has done nothing. The Fifth Precinct does nothing. The middle aged customers from New Jersey and Long Island (who are escored into the locked storefront by a sophisticated series of walkie-talkie weilding Chinese gangsters) come out looking like giddy teenagers. Ah, the illicit thrill of it! Right now they're making a killing with handbags and watches and fake Viagara. The future is a lot scarier.
to Max:
Do YOU know how Louis Vuitton makes their luxury goods? probably not, because if you did, you wouldn't be running your mouth about how LV produces their goods because it is, in fact, a long and precise process.
Another thing, counterfeit goods don't hurt wealthy women who can afford to buy the product. Counterfeit goods cost the world economy $600 billion dollars a year. Companys (LV, Prada, etc.) have a right to be angry at the counterfeit goods. A fake bag is no different than illegally downloading music.
With what you are saying, you're showing support to the criminals who sell these fake bags and hold factories that are contributing to child and slave labor.
And people who buy fake goods are pathetic people anyway. No one buys a LV bag for the design, they buy it because the logo is slapped all over the bag. Obviously anyone who buys a fake Louis is a lowlife who wishes to be considered wealthy. Yes, regulating sales of counterfeit bags will be hard but if we dont try to stop it, we're just letting the criminals continue making money illegally and at the expense of children working in the factories who try to support their families.