Most contractors probably have a torpedo level in their toolboxes, but fewer can be certain about that tool’s provenance or quality.
The mention of torpedo levels isn’t random. A leading supplier, Wisconsin-based Empire Level, has been stepping up its efforts to thwart the perennial problem of counterfeits coming into the U.S. from Asia and primarily China.
Illegal knockoffs of tools and just about every other product these days—consumer electronics, footwear, and pharmaceuticals are the most popular items— for decades have been a scourge of global proportions for North American manufacturers. One recalls instances in the 1980s, when Stanley Works brought federal marshals onto the floor of the National Hardware Show to arrest vendors that were displaying knockoffs of Stanley’s products in their booths.
Just last week, the Ministry of Trade in Qatar seized 15,000 fake tools bearing the Stanley brand. And on July 31, China and the U.S. conducted their largest coordinated raids ever, seizing 243,000 consumer electronics counterfeits at American ports.
Last year, the U.S. Department of Customs and Border Protection seized the equivalent of $1.26 billion in counterfeit products. But the government’s efforts sometimes seem like it’s trying to bail out a flooded boat with a teaspoon.
In a report it released in May, the Intellectual Property Commission—co-chaired by former Utah governor and presidential hopeful Jon Huntsman and by the former director of National Intelligence and commander in chief of the U.S. Pacific Command Dennis Blair—conservatively estimated the annual losses from intellectual property (IP) theft at more than $300 billion, “comparable to the current annual level of U.S. exports to Asia.”
Counterfeits emanating from China-based sources alone account for 50% to 80% of total IP theft, the report stated. You don’t have to tell that to Jenni Becker, Empire Level’s president. She claims nearly all of the knockoff levels her company has uncovered in the stores and warehouses of North American retailers and distributors have their origins in China.
“If it’s made in China, it’s not ours,” says Becker, whose company makes all of its torpedo levels, and 90% of all of its levels and squares, in the U.S. Becker adds that another telltale sign of an illegal knockoff is the white frame around the torpedo level’s vial, which she says is Empire’s signature.
Empire has issued dozens of cease-and-desist letters to U.S.-based distributors and retailers that were selling counterfeit levels. “Once we brought it to their attention, they’ve been cooperative and we’ve been able to come to some kind of resolution,” be it financial compensation or destroying the product in the field, says Becker.
The supplier also has launched more than 100 enforcement actions, which have resulted in the dealers insisting that the source from which they bought the counterfeit levels—and, usually, other products—take everything back or the dealer would stop buying from that source entirely.
Empire’s efforts to prevent Chinese suppliers from shipping counterfeit tools to its markets have been more frustrating, says Becker. Just finding these suppliers can be a challenge, especially repeat offenders who “will switch company names three or four times.” Becker says that many of these suppliers don’t understand—or couldn’t care less about—U.S. intellectual property law.
Becker concedes that Empire and other toolmakers might be just whistling in the wind in trying to stem the flood of knockoffs. But she does believe that China eventually will figure out that if it doesn’t cooperate with U.S. efforts to protect intellectual property, “it is going to lose its ability to sell to this country. I do think there’s a trickle-down effect as rules get enforced on the street.”
Empire sells products in 50 countries, with the bulk of its business coming from the U.S. and Canada, where Becker sees “pockets of concern” about but not fervent resistance to buying counterfeit products among consumers. “A lot of Americans don’t practice what they preach,” meaning their buying decisions are still driven mostly by price.
Becker sees greater awareness of and demand for quality and durability among contractors and builders who use Empire’s products, particularly levels that “are precision instruments,” says Becker. “We’re using the same equipment [to make those vials] as the medical profession.”
The Intellectual Property Commission says that any strategy to reverse this tide must start with “changing the incentive structure for IP thieves … by making theft unprofitable,” primarily by putting trade pressure on the countries where the offending suppliers operate, often with impunity.
Meanwhile, Becker says Empire will continue to hold its trade partners’ feet to the fire to keep knockoffs off retail shelves. She sees this “as the normal protocol for maintaining our business. It’s no different from buying insurance.”
John Caulfield is a senior editor for BUILDER.