It is right and good to revel in the satisfaction of a job done well.
Which is approximately what those charged with stemming the flow of counterfeit merchandise at the Vancouver 2010 Olympics did as they tracked the lower-than-feared presence of ersatz goods during that golden February fortnight.
“Then, a few days after the Games end, the phone rings,” said Lorne Lipkus, a Toronto-based lawyer whose firm led the Vancouver Olympic committee’s anti-counterfeiting efforts.
It was a contact at the RCMP’s Border Integrity unit reporting a seizure of “a few hundred” Team Canada hockey jerseys at a B.C. postal terminal.
The exact count was somewhat more surprising.
“There were 16,000 counterfeit jerseys, they had come in about 1,500 shipments over a two-week period,” he said. “Most of them were Hockey Canada jerseys, but about 40 per cent of them were NHL jerseys. Not one was authentic. Not one person asked for their shipment back.”
The boxes were opened by border officers and set aside not because they were under-appraised apparel (a customs infraction), but fakes, which made them a police matter.
“It was just: put it in the bin. Well the bin ended up being a tractor-trailer’s worth,” said Lipkus, a co-founder of the Canadian Anti-Counterfeiting Network who has worked with most of the major sports leagues (he also advises Hockey Canada).
International law enforcement and anti-counterfeiting advocacy groups estimate the bogus-goods market – propelled by a robust global trade in luxury-brand knock-offs – could represent as much $500-billion a year.
If counterfeiting is a long-standing problem for outfits such as the NFL, English Premier League and Major League Baseball, now it represents a gathering storm for the NHL.
“From the 2008-09 season until now, the amount of counterfeit jerseys we’ve seized has quadrupled, and it shows no signs of slowing down. That’s the number that’s been seized, so it’s the tip of the iceberg,” said Thomas Prochnow, group vice-president of legal and business affairs for NHL Enterprises L.P., the league’s merchandising wing.
The total police haul in the first nine months of this year, according to the NHL, was 3,200 jerseys with a retail value of more than $1-million.
“Counterfeit jerseys wasn’t a huge problem until four or five years ago for the NHL. ... I think one of the reasons for that is it’s a lot harder to make a hockey jersey with the different materials and the crest, and things like that,” Prochnow said.
Such is no longer the case.
“They,” Prochnow said of the counterfeiters, “really have no shame.”
To provide perspective on what merchandise sales mean to the NHL, an executive at Reebok, the NHL’s official jersey supplier, said the company sells “hundreds of thousands” each year.
Despite increased enforcement efforts, the battle could prove difficult to win – many fans, even diehards, are put off by the prospect of shelling out $400 for a game-quality jersey.
To speak to those who buy fakes is to quickly understand few have any qualms.
“It’s just the price of them. I can get a personalized jersey for $40, the name’s stitched on, the material’s nice, the cresting’s good, they have tie-downs, they look pretty genuine to me,” said a Southern Ontario hockey fan who has purchased several jerseys from a website registered in Montreal. “They’re fine for what most people use them for. I put them on and go eat chicken wings.”
Beyond the lure of low prices, there are systemic factors at work.
Earlier this autumn, the NHL launched an anti-counterfeiting campaign in Montreal, another hockey market awash in fakes.
Choosing a Canadian hockey city to unveil the campaign was appropriate: it turns out this country is an excellent destination for exporters of bogus goods.
In 2009, the Office of the U.S. Trade Representative put Canada on a priority watch list – along with China and Russia – because of political foot-dragging over the reform of intellectual property and copyright laws.
Parliament has been mulling a new copyright act since 2008, and re-introduced legislation tabled in 2010 this past September. It is expected to pass in the coming months although critics contend it is deeply flawed.
It’s not clear whether beefing up the law – Canada must do so as a signatory to an international anti-counterfeiting convention – will make a big difference in the near term.
“Counterfeit goods flow largely unimpeded into Canada for retail distribution and Canada continues to serve as a transshipment point for goods manufactured elsewhere, and intended for other end-markets including the United States,” said a 2010 report by the International Anti-Counterfeiting Coalition, a U.S.-based lobby group that represents dozens of companies including luxury brands Rolex and Louis Vuitton.
According to police and other sources, most knock-off NHL jerseys come from the Guangdong province in southern China (its largest city, Guangzhou is a well-known centre for fake textiles).
They are generally sold wholesale to websites and other middle-men, then shipped to North America by courier service, usually in small batches – more often than not, dozens of packages will be sent to dozens of fake names at a given address and resold later.
“You see a lot of it end up at flea markets or in discount stores,” said Sgt. Sylvain St. Jacques, of the RCMP’s national Federal Enforcement section in Ottawa.
The wider difficulty facing the NHL is one luxury-brand companies have encountered since the dawn of e-commerce: counterfeiters are far away, hard to prosecute, and law enforcement generally has more pressing things to worry about.
The RCMP has a national Intellectual Property Crime section at its Ottawa headquarters and Federal Enforcement offices in 43 detachments across Canada.
But resources are scarce, and the priority is ferreting out smugglers of counterfeit prescription drugs and tainted food.
Since 2005, the RCMP has logged 169 cases where counterfeit jerseys were seized, some of them aided by independent investigations (Reebok, for example, has a legal division in Portland, Ore., that directs its anti-counterfeiting efforts).
“When there’s a high demand, like at the beginning of hockey season, the counterfeiters see an opportunity, and they go after the market aggressively,” St. Jacques said.
And there is definitely a market.
The cheapest adult jersey on the Toronto Maple Leafs’ official website is $99, the most expensive model is $320.
But with a few clicks of a mouse, it’s easy to find a bogus Phil Kessel or Dion Phaneuf “game-quality” jersey for $38 U.S.
There is a business case for charging premium prices – as luxury brands do – and it’s clear the NHL is keen to profit from high-margin goods such as shirts.
“The arenas are already pretty full, especially in Canadian cities, and ticket prices are high. So where else do you find money in this day and age? Merchandising and mobile revenues,” said Bruno Delorme, a sports-marketing expert at Concordia University.
Both the NHL and Reebok argue they can cater to any pocketbook, but by pricing themselves far above their black-market rivals – official jerseys are mostly made in North America, and therefore cost more – sports leagues make it harder to compete against tempting deals offered by counterfeiters.
This is even true in strong hockey markets, Reebok officials say Original Six jerseys are the most frequently copied.
Research conducted in cities like Montreal and Ottawa estimate a majority of the jerseys floating around at any given time are fakes – the Canadiens were hard-hit during their centennial season; vintage jerseys proved a bonanza for counterfeiters.
Quality varies greatly, but to a practised eye fakes are easy to spot.
Still, counterfeiters have taken to copying details right down the holograms and tags, although often quite poorly (other clues include thinner-than-usual fabrics, ripples in logos and trim, as well as uneven stitching).
The challenge for the NHL is to convince consumers of the evils of counterfeiting – which the IACC and others link to organized crime – and of its unintended consequences.
Those include financial losses at Canadian manufacturing plants and for your favourite team.
The Winnipeg Jets have become the latest club to feel the pinch (police have seized roughly 300 fake Jets jerseys since the summer).
Amid the joyful ruckus surrounding the rebirth of the team, the RCMP delivered a sobering message: you’re about to become very popular among copyright pirates.
The Mounties were quickly proved right.
True North Sports and Entertainment had plans to unveil its team’s new logo on July 24, but abruptly changed tack when someone cracked open a box of shirts on July 22 and snapped a picture that was swiftly posted to the Internet.
“Quite early on, the RCMP came to us and said our jersey would probably be the biggest counterfeit item in the province of Manitoba this year,” True North’s Scott Brown said. “And I don’t doubt that they’re right.”