Tim Kraus is Executive Director of the Heavy Duty Manufacturers Association. Prior to joining HDMA, he served as director of sales and marketing at Triseal Corp. The Heavy Duty Manufacturers Association (HDMA) is the heavy duty market segment association of the Motor & Equipment Manufacturers Associations (MEMA). HDMA exclusively represents the interests and serves heavy duty product manufacturers.
It is becoming all too frequent that you read articles or hear news stories about counterfeiting issues. Up until recently, it would be common to hear about the Gucci knockoff bags or pirated DVDs of recently released movies.
These knock-off products are victimless crimes, right? Wrong. How would you like to have fake brakes with your brand name on them equipped on an 18-wheeler bearing down on a stalled school bus?
According to a 1997 Federal Trade Commission study, counterfeiting costs the automotive and heavy duty industries $12 billion globally—$3 billion of that in the United States alone. We believe these the problem is much worse than estimated.
It's easy to see why the FBI has called counterfeiting the "crime of the 21st Century." In a response to members' concerns, the Heavy Duty Manufacturers Association (HDMA), in conjunction with the Motor & Equipment Manufacturers Association (MEMA), created the Brand Protection Council. The Council includes manufacturers of light and heavy vehicle components who share the same concern: protecting their brands from intellectual property violators. I invite any manufacturer who believes their brands are or may be at risk to join the Council, as it is better to be proactive and head off problems before they may occur.
On a positive note, MEMA has worked with several government agencies including the Department of Justice, the U.S. Patent and Trademark Office, Department of Commerce. All agencies we have met with have listened to our concerns and have expressed interest in helping our industry. We are clearly off to a strong start.
Intellectual property rights violations can cost manufacturers hundreds of millions of dollars, significant job loss and brand degradation. But there are also significant civil and criminal penalties you can face as a wholesaler, distributor, retailer or service professional for trafficking counterfeit parts.
Because we're all in this together, we can collectively learn from each other. We must understand as an industry the major safety risks to consumers and truck operators who unknowingly have their vehicles equipped with counterfeit and/or non-compliant products. We cannot compromise the trust and safety image that is so critical to our industry, and ultimately to our livelihoods.
Counterfeiting emerged as an issue in our industry about a decade ago when fake Class-8 bolts made their way into the supply chain and onto truck cabs. The bolts, made of sub-par steel, began to break because of insufficient tensile strength.
Frequently replaced parts, such as brake pads, oil filters, fan belts and windshield wipers are at the top of the most counterfeited list. However, one of the most challenging aspects of counterfeiting is the quality and appearance of the fake products. Counterfeiters have become more sophisticated and being able to spot a fake product from a genuine product has become much more difficult.
At one time, the heavy duty market was not seen as a lucrative market for counterfeiters due to the narrow distribution channel and inaccessibility. The increased presence of industrialization overseas is part of the reason why the heavy duty market is experiencing a spike in trademark and intellectual property rights violations.
You can be smart and avoid being part of this problem. First, understand the scope of the problem. Consider that counterfeiting steals good manufacturing jobs, counterfeit products pose safety risks to unsuspecting consumers, operators and service professionals, and counterfeiting destroys the brand reputation of legitimate companies, hurting them at home and in foreign markets.