| Not exactly counterfeit
Parloff, Roger
Fortune Online, May 1, 2006
Based on the experience of several companies, the article describes
a fairly new challenge Western companies face when trying to protect
their products from counterfeiting - the so-called "Third or
Midnight Shift". Western companies outsource the production
of their goods to factories overseas, thereby entrusting their intellectual
property to contractors all over the world. Licensed contractors
fill the order during the day shifts, but run extras at night, which
they sell for their own profit. Stopping this practice turns out
to be very difficult, as an example of a lawsuit by the shoe manufacturer
New Balance against a Chinese factory owner illustrates. Roger
Parloff is a Fortune Senior Writer.
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