April 27th, 2006
First-Ever Case of an Entire Company Being Pirated
By Alice Hill
RealTechNews
Piracy is a problem in the tech world and a major strain on doing business with China in particular, but what about when your entire company is pirated? And what if it isn’t a little company, but a huge electronics behemoth as big as NEC? Sounds strange? That’s what we thought until we started researching this issue more.
It seems that Chinese piracy experts not only started duplicating and selling NEC branded products, they began setting up fake NEC factories and warehouses, in essence, hijacking the brand and the operations of an entire company by impersonating the company itself. A pirating first.
Like hundreds, if not thousands, of manufacturers now locked in a war of attrition with intellectual property thieves in China, the company hired an investigator to track down the pirates. After two years and thousands of hours of investigation in conjunction with law enforcement agencies in China, Taiwan and Japan, the company said it had uncovered something far more ambitious than clandestine workshops turning out inferior copies of NEC products. The pirates were faking the entire company.
Evidence seized in raids on 18 factories and warehouses in China and Taiwan over the past year showed that the counterfeiters had set up what amounted to a parallel NEC brand with links to a network of more than 50 electronics factories in China, Hong Kong and Taiwan. Source: Intenational Herald Tribune
We Say: Wow. That’s on a whole other dimension. Two questions: if the goods were for sale and this has been going on for some time, how can we tell what NEC products are actually the real deal? And if it could happen to NEC, who’s to say who isn’t being scammed by a simailar setup? Scary business, literally.
David Johnston says:
Hmm, I’ve bought a LOT of NEC DVD burners. They generally have very good prices and are a high quality product with lots of features. I’m pretty sure none of them are fake, though, since I bought from Newegg. That’s pretty crazy. I hope NEC gets that operation shut down. Not only does it take business away from the real company, but the fake company’s products could give real NEC products a bad name if their quality is poor.
April 27th, 2006 at 2:38 pm
Alice says:
I just looked around to see what NEC stuff I have and have to say pretty much nothing. That’s even worse - that I didn’t notice. Their monitors were the best back in the day.
April 27th, 2006 at 2:46 pm
Duh says:
“monitors”, not “monitor’s”. Duh.
April 27th, 2006 at 3:04 pm
Bob_Ross says:
I’m betting the pireted version were better quality. Good for them!
April 27th, 2006 at 3:18 pm
Bob_Ross says:
I’m betting the pirated version were better quality. Good for them!
April 27th, 2006 at 3:19 pm
Duh's an idiot says:
because we all know how important spelling & grammar are on article comments..
April 27th, 2006 at 3:30 pm
Duh's brother says:
Don’t be a dick, Duh.
April 27th, 2006 at 3:32 pm
Tim says:
I recently ran into this problem while trying to rma a defective Intel desktop NIC, to Intel. It seems that this problem has prompted Intel Phone Reps to assert, right before they issue that magical rma number, “We have received many returns that have been branded Intel, look like real nics, have serial numbers, they are silkscreened with Intel on them, that even a trained eye can’t tell them apart at a glance, so if you send us one of these, it will be confiscated and you will be sued for fraud(!).” Yes, this is what the nice lady said to me. Upon deeper discussion at this outlandish statement, it appears Intel has litigation pending with a major online retailer on this counterfeit hardware theme. They don’t want to be stuck with broken knockoff items any more than we do! No calls from any lawyers yet, and I got my replacement nic. I dodged a bullet there, no?
April 27th, 2006 at 4:09 pm
Duh's an idiot is a douche says:
I just felt like it.
April 27th, 2006 at 4:10 pm
Will says:
Man, if the company can sue an unsuspecting customer for fraud over a knock off product, the customer should be able to sue the company for there being knock off products. Just saying…
April 27th, 2006 at 4:29 pm
grammar nazi says:
“until we stated researching this issue more”
failed as a real news org until site learns to “speel”.
April 27th, 2006 at 4:35 pm
Alice says:
Thanks guys. I fixed the errors. We actually are covering something we are not seeing on other sites, so let’s get back to the issue. Pretty big issue in my book and I’ll bet that NEC is just the beginning.
April 27th, 2006 at 4:51 pm
Alice is a douche says:
“We actually are covering something we are not seeing on other sites…”
Covering? You take almost all of your article from another website. Did you try to contact NEC? Have you called up any law enforcement agencies? “Researching” involves more than just copying and pasting from a real news source, and adding comments (that don’t really add anything) above and below your quote.
Blogs pretending to be news sites are ruining America. STFU and GBTW.
April 27th, 2006 at 5:02 pm
Mister Moy says:
sweeeet
April 27th, 2006 at 5:03 pm
Alice says:
# 12 There is no need to be rude, especially when you post without your real name. We do our best. Getting a salary to be a reporter would be a nice start, but 99% of all blogs don’t have that kind of money. So we keep an eye for things our readers may be interested in and we condense and package the info the best we can. You can always surf the big news sites for the big budget coverage, and we’ll just keep doing our thing here.
April 27th, 2006 at 5:21 pm
Fred says:
OK, so NEC outsources its manufacturing to China, go ahead, look at your NEC product, it’s made in China. So China figures, lets eliminate the middle man, keep the NEC branding and sell it to unsuspecting consumers. You are probably getting the very same NEC products, but without the blessings of NEC.
Very strange.
April 27th, 2006 at 5:22 pm
Alice says:
That’s a good point Fred. I know that in home improvement, companies go out and source power tools from China and the same factory producing drills is making some yellow and slapping Dewalt stickers on the them, while down the line the same drill is some 2nd tier house brand that a retailing chain will sell for half the Dewalt. But there is nothing fishy going on - you just source the best deal and Home Depot is loving their own line of products while offering the Dewalts too.
In this case, it sounds like NEC got cut out of its own branded products. Very interesting….
April 27th, 2006 at 5:28 pm
David Suzuki says:
are you trying to pretend you just do this for fun, Alice? people like you might not be ruining America, but you are wasting bandwidth….I’m only here because you got farked instead of the original author’s site.
April 27th, 2006 at 5:30 pm
Alice is still a douche says:
1) I did use my real email address.
2) Fred’s point missed the fact that NEC is still responsible when a product is defective. Do you think some pirated company is going to repair or replace a junked out monitor?
If you buy a cheap off-brand product, you know what you are buying and that you probably shouldn’t expect much if it doesn’t work after 5 days. Buying something that says NEC on the box, and breaks after 5 days is NOT FAIR to NEC.
April 27th, 2006 at 5:59 pm
Bobby says:
How come comments are being changed *after* they’ve been posted? Is Alice censoring the free speach of her readers? How can someone “aspiring” to be a reporter snuff out simple rights and freedoms?
April 27th, 2006 at 6:06 pm
Alice in douche chains? says:
The real question is, did nec stumble on some alternate reality version of themselves where everyone suddenly wears a goatee and the casual observer can’t figure out which one is real?
This is just bizarre. I don’t buy it; but still, a weird idea.
April 27th, 2006 at 7:02 pm
Ian Hough says:
After reading some of these comments, I feel bad for Alice. Somebody’s mother forgot to tell them if you don’t have anything nice to say, don’t say anything at all. Hang in there Al
Now on topic - Asia is super bad with piracy. It’s amazing we don’t come across it more then we do already it here in the states. They copy EVERYTHING - Computer hardware, software, electronics, clothing, watches, you name it, they make a knock off of it.
April 27th, 2006 at 7:41 pm
Willie says:
David Johnston. Do you know Sigrid?
April 27th, 2006 at 8:26 pm
Willie says:
David Johnston. Do you know Sigrid?
April 27th, 2006 at 8:27 pm
Trevor says:
What do you care Bobby? Start your own damn blog if you want a place to go where you are in charge of being the comment Nazi.
Asia isn’t the only place that has crappy knock off products running rampant. Come visit the Middle East, and you’ll find the worst of the worst knock off bargain basement crap. Lowest quality merchandise on the planet.
If you want surge protectors guarenteed to catch fire, or USB drives gaurenteed to lose your data, buy them in Baghdad.
April 27th, 2006 at 9:36 pm
Rob says:
Will said:
“Man, if the company can sue an unsuspecting customer for fraud over a knock off product, the customer should be able to sue the company for there being knock off products.”
That just happened to Pepsi, and they lost the case:
http://news.bbc.co.uk/2/hi/south_asia/4947718.stm
April 28th, 2006 at 12:02 am
Alice says:
We don’t change comments unless a) they are spam and then we try and delete them (our new filter really helped cut down on that dramatically) b) the posting is obscene and/or c) I posted a bad spelling error in my own post and got called on it, in which I correct it and then let people know I corrected it.
My personal policy is to never fight in some stupid flame war with readers, to try and listen to what they are saying even if it is negative, to point out our own constraints or issues that they may not know about, and then to ask them to reveal themselves if they are not using their own names. So far, the posting have been pretty open and comment spam aside, very useful and often entertaining. Aside form that, that’s the best we can do.
April 28th, 2006 at 12:40 am
stephen says:
How about the people working there? Did they think they were working for NEC? I can’t see the whole operation running for so long if the didn’t. Imagine that, you go to work one day and find out that your life is a lie.
April 28th, 2006 at 5:47 am
Jimmy says:
“These records showed that the counterfeiters carried NEC business cards, commissioned product research and development in the company’s name and signed production and supply orders.
He said they also required factories to pay royalties for “licensed” products and issued official-looking warranty and service documents.
Some of the factories that were raided had erected bogus NEC signs and shipped their products packaged in authentic looking boxes and display cases.
“The reality is that factories in China will produce what they are asked to produce,” he said. “The challenge is finding out who placed the orders and who funded it.”"
This is really something. It’s going to come down to a matter of he said she said, as these warehouses were just doing what they were asked to do. Probably some enterprising individuals inside NEC were making money from this too.
Just shows you get what you pay for, you hire companies in other countries to create stuff for you, you had better have some way of policing what they are doing.
April 28th, 2006 at 6:55 am
Preston says:
“Asia is super bad with piracy. It’s amazing we don’t come across it more then we do already it here in the states.”
Ever been to Manhattan, or any major city, for that matter? I’ve walked by shops while their wares were being confiscated by the police. Picture a chain of officers tossing garbage bags filled with LV purse knock-offs into a giant NYPD moving van. The stuff literally pours out onto the streets here, especially down in China Town.
The fact of the matter is, NEC-or any other hardware company- can’t descriminate when it comes to who they sell their product to. And once in capable hands, that piece of hardware can be dissected and rebuilt piece-for-piece until it works again… copying a product takes a hell of a lot less engineering skill than designing it in the first place, hence you end up with a xeroxed piece of crap with no technical support behind it. China has found the loophole, especially when it comes to companies that out-source their labor to them. Lesson learned? Buy domestic!
April 28th, 2006 at 7:07 am
Mike says:
You guys are just haters because Alice intimidates you because she is intelligent, successful AND very pretty. It just took a little “research” to find that out.
As an employee at a large tech college I have to wonder how much of our equipment might be counterfit or how we might be affected if we had to call in a legitimate part to a company flooded with counterfit problems. I’ve not seen anything of the like yet, but it makes you wonder. Thanks for the news, Alice.
April 28th, 2006 at 7:10 am
Rizzo says:
“Ever been to Manhattan, or any major city, for that matter? I’ve walked by shops while their wares were being confiscated by the police. Picture a chain of officers tossing garbage bags filled with LV purse knock-offs into a giant NYPD moving van. The stuff literally pours out onto the streets here, especially down in China Town.”
Wow, you’ve actually seen them bust those guys? You can’t throw a stone in Manhattin without hitting a shady electronics store that I wouldn’t spend 50 cents at.
Still, amusing at least.
April 28th, 2006 at 7:50 am
Leo says:
Looks like all these companies outsourcing thier labor oversees are getting more than they bargained for. How much did they save in labor and production costs compared to the loss of business and reputation because of cheap knock offs.
April 28th, 2006 at 8:52 am
Random Internet Lurker says:
Makes me wonder if the NEC DVD-RW drive I did get from Newegg months(most likely a year) ago was a bogus. Never did go about doing a RMA on it since it was nearly the same price to just get a new one than to ship the old one back.
April 28th, 2006 at 10:23 am
ratbag says:
A pile of shit has a thousand eyes
April 28th, 2006 at 11:01 am
Ted says:
I can see it in the future, new dvd players will come with certifcates, serials, phone activations…..
April 28th, 2006 at 11:09 am
thanatos says:
Haha, this story reminds me of the Monty Python short about corporate pirates and the buildings are gliding down the streets like ships and old guys are pushing vertical file cabinets to the windows and the drawers are shooting out like cannonballs. Hahahahaha. That’s the picture I have in my mind.
April 28th, 2006 at 1:00 pm
[M]ayhem says:
Serves all those stupid businesses right for dealing with a nation that has absolute zero regard for intellectual property rights.
Hopefully they all go bankrupt and are forced to sell oranges at freeway offramps because nobody here will miss their overpriced crappy products.
April 28th, 2006 at 1:03 pm
thanatos says:
This story reminds me of the Monty Python short about corporate pirates. It’s really funny with buildings sliding down the streets like great sailing ships, and old guys pushing vertical files to the windows and blasting the filing drawers out of them like cannonballs. Hahahaha really funny.
April 28th, 2006 at 1:43 pm
Marc Johnson says:
I actually used to work for NEC in a semi-conductor fab. I will personally assure that the bootleg products are superior. NEC is tanking, big big time tanking. They deserve it too, because of bad management choices, and poor treatment of employees.
I can honestly say that was hands down the worst job I’ve ever had. I usually beat out people in “my job sucks” comparisons.
This is great news, screw them.
One particular story involves a man working at a tool involving arsenic gas… drops dead. He’s replaced a few hours later after Line Maintenance determines the machine wasn’t an issue, doubles over in convulsions… they take a day to investigate, then attempt to staff the machine (without fixing it, just “investigating” it) with a woman that was 7 months pregnant.
This isn’t in China… this was fucking Roseville, CA.
They are incompetent and deserve to be wiped from the financial world. I could go on and on, but I’m currently at work (Intel) and I don’t want to get spotted posting on forums all day.
Fucking great news, evil bastards.
April 28th, 2006 at 2:20 pm
unbelievable. says:
If I had opposite of bookmarks in my browser I would add this site. The duh, douche, and monitor’s squabble kept me reading to the end.
post 36. The corporate pirates was a great skit.
April 28th, 2006 at 8:54 pm
Qasim Saeed says:
ever heard of Intel making $5 PCI dialup modems that can’t connect on speeds greater than 33.6kbps? No? Didn’t think so! Welcome to Pakistan, you can find them here and they are definitely coming from China. Talk about piracy, my friend!
April 29th, 2006 at 11:09 am
Illiterate Poet says:
Illiterate Poet Investing
“The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that…
April 30th, 2006 at 11:08 pm
Duh-wayne says:
Communist red China - the last bastion of pure capitalism! At first I was slightly sympathetic to the poor multinational corporation that was getting ripped off, then I read comment #8 and went right back to rooting for the pirates. Avast me buccos!
May 3rd, 2006 at 11:05 pm
nul says:
fuck NEC, this was a victimless crime, go pirates HARH HARH FUCKING HARH
May 9th, 2006 at 11:08 am
HyPo says:
It seems, that company should make a database of serials, which have been produced….then when someone byus the new drive, he can check, if it is original brand.
May 14th, 2006 at 12:27 am
Obscene says:
then the pirateing companies can figure out those serials and then put those on their products making it useless if the fake products have the same serials….
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