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Flood of knockoff merchandise triggers a wider crackdown across US

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It's become known as "the Watson's Flea Market Raid."

It began at the peak of the sales day, when local police and corporate officials wove through the crowd of bargain-hunters like buyers with badges. They inspected the merchandise, comparing serial numbers on the products with computerized lists from the manufacturers – and confiscated carton after carton of fake Red Monkey jeans and knockoff Timberland boots.

Allegations of selling stuff that purported to be something it wasn't landed 20 people in handcuffs that day, on charges of breaking state and federal licensing and trademark laws.

"It's good that they get rid of people who undercut ... legitimate dealers," says Catherine Scott, a necklace-maker who witnessed the raid two weeks ago. "But the flip side is there are fewer customers, because the knockoffs are what drew people to the market."

Traditionally, the counterfeit-goods trade has fallen under the purview of federal authorities, but that's changing. At the Watson's raid and in other crackdowns, local and state law officers are taking the initiative, in part because the counterfeit industry has become so large – worth $200 billion a year to US corporations – that crime-fighting backup is needed.

Intellectual property rights seizures in the US rose 72 percent between 2005 and 2006, and the value of seized apparel rose from $8 million to $10 million during that time. Seizures of footwear were up by $3.6 million last year, with 89 percent of those goods coming from China, according to the US Customs and Border Protection Agency.

"We're seeing an increase in seizures and an increase in enforcement, but also in the volume of goods coming through," says Travis Johnson, general counsel for the International Anti-Counterfeiting Coalition (IACC), an industry group based in New York.


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