PCWorld reports on two individuals who sold millions of dollars of counterfeit Cisco-branded equipment. Finally, a case where “fraud” and “counterfeiting” is charged, where there is a real crime–that is, something that would be a crime in libertarianism. But notice that the article says: “Zhao ran the U.S. headquarters of a Chinese company that stole intellectual property and defrauded customers” — but the IP claim is unnecessary and redundant here. There is fraud.
IP advocates often claim IP law is justified because people selling knockoffs etc. are “committing fraud” or “counterfeiting.” Yet quite often there is not fraud: the sale of a fake Rolex watch for $20 is not defrauding anyone, since the buyer knows he’s getting a fake. And IP advocates mix up “plagiarism” with copyright infringement–these are different things (see Sheldon Richman’s “Slave Labor and Intellectual Property: On a misplaced analogy”). Here, finally, is a case where there is actually a victim–the defrauded customers–and no need for IP at all to sustain the fraud claim.
Two Convicted in U.S. Over Counterfeit Cisco Gear
A U.S. federal jury convicted two people this week over a scheme to import and sell counterfeit Cisco-branded networking equipment, the Department of Justice said on Thursday.
The jury found Chun-Yu Zhao of Virginia guilty of conspiracy and 15 other counts related to import fraud and counterfeit labeling, the department said in a statement. Zhao ran the U.S. headquarters of a Chinese company that stole intellectual property and defrauded customers, the statement said, citing U.S. Attorney Neil MacBride.Zhao took millions of dollars from unsuspecting U.S. consumers and businesses, MacBride said.
The counterfeit case is part of a wider justice department effort to fight a growing number of intellectual property crimes. Authorities in the U.S. and Canada have been looking into import fraud involving China since 2005.
… Cone, Zhao and Zhao’s family members in China had operated a “large-scale counterfeit computer networking equipment business” under the name Han Tong Technology (Hong Kong), the justice department said. Zhao and others working with her had defrauded U.S. buyers through a company in Virginia called JDC Networking.JDC Networking used pirated software to alter Cisco products and falsify labels, the department said. Zhao used different names and addresses on import documents and hid millions of dollars of counterfeit proceeds through bank accounts and property under the names of family members in China, the statement said.
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