Leaked memo details Apple's anticounterfeit plan

A newly unearthed 2008 memo from the U.S. embassy in Beijing, which was acquired by WikiLeaks, details how Apple began tightening the screws on Chinese counterfeiting operations.

A counterfeit iPad next to the real deal.
A counterfeit iPad box next to the real deal. Alexandra Savvides/CNET Australia

A newly unearthed memo posted on Wikleaks details Apple's burgeoning efforts to combat counterfeit goods in China and elsewhere, something the document says the electronics giant began in earnest just three years ago.

The unclassified memo, picked up by CNN's Mark Millian this morning, originates from the U.S. embassy in Beijing and is dated September 2008.

In it, the embassy provides an update on Apple's plans to deal with the growing number of counterfeit versions of its products in the region, including hiring former Pfizer employees Don Shruhan and John Theriault to manage the company's security. Shruhan is credited for helping Pfizer crack down on counterfeit Viagra production in the region, with Theriault being his boss while the two worked for the pharmaceutical company, the memo says.

The counterfeiting of Apple products in China is described as being unquantifiable in scope but nevertheless a serious problem due to advanced techniques that make use of legitimate manufacturing molds for iPods and iPhones from the plants that produce the authentic products in the region.

"Whatever means counterfeiters are able to exploit, the numbers are compelling," the memo says. "Shruhan notes that customs seizure data definitively show that there is enough counterfeit production of Apple products in Guangdong to effectively make China the single [largest] source for the world's fake iPods and iPhones, many of which are transshipped via Hong Kong to points onward."

In order to get the local-government entities interested, the memo says Shruhan laid out an approach similar to what Pfizer did to sniff out Viagra knockoffs, including finding the goods at retailers, then going up the supply chain to the manufacturers and distributors, then dealing with online sales.

The hard part, the memo suggests, might be getting China's Public Security Bureau to investigate the company's claims.

"Shruhan is unsure how much the PSB will focus on Apple's issues, but it believes that a safety angle like shoddy devices causing fire hazards will strengthen his case," the memo reads. "Short of this, his most persuasive argument will be the economic impact of counterfeiting: lost tax revenue and jobs."

The memo is of special interest, given what's currently happening with counterfeit Apple retail stores in China. While Apple has four official stores in China, the country has faced scrutiny over unauthorized resellers. One unauthorized store in the Kunming region of the country made headlines after a blog detailed its likeness to an actual Apple retail store, right down to the tables and signage.

What followed was a crackdown on a number of stores, including closures of stores found to be operating without a business license. Others sporting a likeness to Apple's stores were forced to rebrand .

The counterfeiting problem is not limited to the China, as a lawsuit filed in New York earlier this month suggests. That suit targets two local stores for selling counterfeit cases and accessories for the iPod, iPhone, and iPad, as well as headphones made to look like Apple's own.

 

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