depending on the product liability laws within that state. But Silcox said it can be based on damages to prop- erty and lost profits if the case in- volves damage to a business; if some- one was injured, a company could also be liable for things like medical bills, lost income, and even pain and suffering. “Depending on the nature of the incident, the financial damages could be significant,” Silcox said.
Squelch Demand, Prevent the Sales But even if manufacturers do not have a legal requirement to worry about counterfeits that bear their name, Silcox noted that they often feel com- pelled to watch out for them and keep the marketplace informed of known problems. Doing so is a good practice to keep their own brands’ credibility high, as well as to be a proactive member of the business community. “Counterfeiting is an industry issue, not a manufacturer issue,” said Tom Grace, brand protection manager, Eaton. “Everyone—manufacturers, distributors, and contractors—has a responsibility to limit the use of these fraudulent products, to raise aware- ness of why they are a problem, and to report suspect goods if they see them.” “Manufacturers are obligated to take the lead in creating awareness of the value of genuine products, espe- cially in terms of safety,” Grace con- tinued. “We have to highlight the fact that especially with electrical prod- ucts, this is a safety device and there is technology in place that is protecting end-users from invisible risks. It’s not like a product recall—we’re talking about some unknowns. When there is suspect material in the marketplace, manufacturers can be a key resource in identifying it.” Grace added that end-users in par- ticular are prone to take for granted the importance of safety features in
When They Make It to Market If, despite its best efforts, a distribu- tor comes to realize that it has unwit- tingly sold counterfeit products, there are a few steps it should take—to pro- tect itself and its industry partners, including customers and end-users. “The first step should be contacting the manufacturer,” said Silcox. “This
these products. “End-users tend to see these products as all being the same,” said Grace. “Due to the competitive- ness of the market, that attitude is even trickling into some parts of dis- tribution. They may not know the true origin of the product—that’s on the distributor and the contractor too.” As for how distributors can avoid counterfeits—which often look very similar to the real deal—he said the best way is to buy from authorized distribution channels. Silcox noted that most manufactur- ers provide information to distribu- tors regarding what to look for when attempting to identify counterfeit products and who to contact at the manufacturer if the distributor sees suspicious products. “I concede that it’s not an easy is-
sue to deal with,” said Silcox. “Distrib- utors should make an effort to pay attention to updates from the manu- facturing sources and remind people within their own company to keep an eye out for things that look suspicious and let someone know. “Obviously, if you see something that looks suspicious—the most com- mon being anomalies in labeling, dis- crepancies between the label and the product information, products that don’t seem to fit properly, etc.—the distributor does have a responsibility to say something,” Silcox continued, adding that because of the potential liability problems, it’s in distributors’ best interest to reach out to the manu- facturer to make sure the product is legitimate, particularly if it is product
that wasn’t sourced directly from the manufacturer. Distributors also play a role in getting the word out, according to Greg Donato, COO, Omni Cable. “Communication and transparency provided to the end-user and contrac- tors are key in creating awareness of the potential problems of counterfeit product,” he said. “I would think all distributors would want to provide complete transparency to their cus- tomers if forced to source product outside of the authorized channel. Since distributors touch so many types of customers, they are in a great position to educate their customers of the potential risk and liability of pur- chasing suspect products from unau- thorized sources.” Grace agreed that distributors
play a vital role in helping manufac- turers not only reduce the demand for counterfeit products, but also identify them. “We need to know where to look,” he said. “We’re comb- ing websites and making marketplace orders from suspect sellers to check quality, but usually it’s distributors or resellers that point us in the right direction.”
www.tEDmag.com Jun. 17 • the ELEC TRICAL DISTRIBUTOR 89
FEA TURE STOR Y /
Everyone…has a responsibility to limit the
use of these fraudulent products, to raise
awareness of why they are a problem, and to
report suspect goods if they see them.