Stolen Property; U.S. Fight against Counterfeiting Makes Limited Progress

Article excerpt

Byline: Jeffrey Sparshott, THE WASHINGTON TIMES

Greg Booth says as many Zippo lighters are made in China as are made in Bradford, Pa., the company's hometown.

The problem is, Zippo Manufacturing makes its iconic, rectangular lighters only in Pennsylvania. The Chinese-made products with the Zippo name are cheaper, tinnier knockoffs riding on the reputation and markets built up by the American company during the past 72 years.

"It's illegal. And it takes sales and jobs away from us, from our workers," said Mr. Booth, Zippo's president and chief executive officer.

Zippo's problem is far from unique.

Counterfeiting is a global problem that costs U.S. companies an estimated $200 billion to $250 billion a year, and China is the world's leading source of counterfeit goods, according to government and industry data.

Resolving the rampant piracy in the fast-developing Asian nation is a top priority for the Bush administration and U.S. businesses, though so far progress has been limited at best.

"The infringement levels are too high, and it's affecting American brands," Deputy U.S. Trade Representative Josette Shiner said earlier this month as the administration initiated an effort to have companies document and measure intellectual property theft in China.

Intellectual property includes patented inventions and trademarked industrial designs, as well as copyrighted literary and artistic works. Knockoffs range from purses, sunglasses, DVDs and music to potentially hazardous pharmaceuticals, electrical products and automotive parts.

In one case this past summer, the U.S. Attorney's Office in Houston won a conviction against Zheng Xiao Yi, a Chinese national, on six counts of trafficking in counterfeit merchandise. Mr. Zheng imported several illegally made products, including extension cords that burst into flames when tested under household conditions, according to the Justice Department.

When consumers aren't directly affected, the bottom line and reputation of companies are, though the precise scope of the problem is unknown. Some companies may not even know their products are being copied.

"If you don't have a counterfeiting problem, you probably don't have a successful product," said Paul Fox, spokesman for the Boston-based Gillette Co., maker of personal grooming products and Duracell batteries.

The pirating can be blatant. Mr. Booth said he has seen Zippo knockoffs sold on China's streets. Zippo still sells about $7 million worth of its lighters a year in China, where the product is popular despite competition from cheaper imitations.

"In fact, the Chinese consumer looks very carefully and inspects the lighter before buying it ... because they realize they can be fooled," Mr. Booth said.

Still, the imitations take a chunk of Zippo's sales in China and overseas. …