NEC falls victim to sophisticated "corporate identity theft"

In what has to be the most impressive display of criminal initiative that we've ever seen, an organized group of conspirators in Japan, China, and Taiwan managed to convince dozens of factories in the latter two countries that they represented Japan's NEC Corp., and got them to manufacture pirated products under the NEC brand. According the the International Herald Tribune, not only did the pirates duplicate versions of real NEC devices -- which, according to NEC, were "of generally good quality" -- they actually began producing their own line of NEC-branded products, developed with R&D commissioned by NEC business card-carrying "executives."  All-in-all, the pirates had a product lineup of some fifty different items, ranging from home theater equipment to MP3 players to PC peripherals, and were even thoughtful enough to include counterfeit manuals and warranty documents with their goods. Apparently the ring has been operating since at least 2004, although the real NEC only made the details known recently, following a private investigation that led to the ringleaders' arrest and crackdowns by local authorities on the offending factories.

[Via Techdirt]

[little adolf @ Apr 27th 2006 4:31PM]

This is called China. Where anything can be bought.
Just look at the various Germans and Swiss joint-ventures in China. Audi, BMW, Mercedes.
What is more important?
food for you family or a new Nazi-Benz?

[slim @ Apr 27th 2006 4:32PM]

why in the picture posted, is there a nec logo on a ipod shuffle?

[Rob @ Apr 27th 2006 4:39PM]

I think the picture is simply a graphic representation of the NEC brand on a popular MP3 player -- something to get our attention while simultaneously demonstrating the theme of the article. If you pay attention, I think you'll see Engadget does this kinda stuff a lot.

[furtim @ Apr 27th 2006 4:40PM]

Whoa. Illegal, morally and ethically reprehensible, yeah... But mad props for actually pulling off such a crazy-ass scheme.

[glacia00 @ Apr 27th 2006 4:42PM]

Since China is probably the world�s largest violator of patents, copyright and trademarks I find it unlikely that the factories involved there were unaware. And if they were scammed, even better. They fully deserve it.

The company I work for has had its products counterfeited a few times by companies in China. We receive product returns from people complaining that the product has failed or never worked at all and our response has been 'it's counterfeit, not our problem, and no you don�t get it back.'

Early investigations into these showed that both the seller and buyer knew they were getting counterfeits. And the buyer was hoping our company would give them a real one to replace it. With counterfeit products typically the only victim is the company hose product is being faked.

[Justin @ Apr 27th 2006 4:43PM]

Adolf, you come across as just a bit xenophobic (and ignorant). Kind of like your namesake was.

[Brendan @ Apr 27th 2006 4:49PM]

More like good cover up NEC, the double bluff!! lol

[Victor @ Apr 27th 2006 5:07PM]

I believe in piracy for companies that overcharge...aka Microsoft, Adobe, Asus...etc. But that kinda wrong to pick on a decent company as the target for copyright infringement. I hope they get all of them.

[Whiplash @ Apr 27th 2006 5:56PM]

#8 You believe in piracy for companies that over charge??? And I suppose you are the one worthy of determining what constitutes "over charging"?

I love people who think they can ignore laws they don't agree with. Moral relativism at it's best.

[Eli @ Apr 27th 2006 6:08PM]

These men are my new heroes and role models.

The cajones it takes to not just get stuff manufactured under a brand name for yourself, but actually pay for R&D is mind boggling.

I tip my hat to you, anonymous Asian criminals. You are truly entrepreneurs of the highest calibre.

[tiuk @ Apr 27th 2006 6:28PM]

Yeah, I have a lot of respect for the guts it takes to pull something like that off.

[sw @ Apr 27th 2006 8:15PM]

Whiplash,

Ignoring laws you don't agree with is not necessarily moral relativism. It's possible to have a finely-tuned, well-thought-out moral system and still believe (1) that some laws are unjust, and (2) that refusing to obey unjust laws is not immoral.

Of course, having said that, I think most copyright pirates are simply indifferent to the moral and legal rights of the copyright holders.

[Intrepid @ Apr 27th 2006 9:09PM]

I agree with slim... why is there an iPod with NEC on it? Is this site engadget or iGadget.

[Victor @ Apr 27th 2006 10:19PM]

Thanks SW, WhipLash dont you think a company as large as Microsoft needs that $200+ per OEM OS? I don't, they have enough money as it is. I run MCE 2005 legit because I have a friends that's a MSDN partner, but up until a month ago, I've been using XP Pro Pirated for several yrs. I dont find certain portions of piracy illegal, nor immoral. It's based to me upon the fact of necessity for company profit, and the effort into making the true products. Should my child go without eating for a week or two because I went and paid an obviously overly priced cost for something? As well, I work for Quanta Computers, the backbone OEM behind DELL, Gateway, IBM, Averatec, Emachines, and others. I know how the software development side between what a consumer and what a business sees. And its all pure profit that takes from anothers. My Final Words In This Is MY Saying: PIRACY IS NOT AN ATTEMPT TO DESTROY, INJURE, OR FOIL A COMPANY, BUT A REALITY THAT EVERYTHING THAT EXISTS IN THIS WORLD DOES NOT NEED TO BE COPYRIGHTED AND PROFITED FROM. PIRACY IS A PERSONS INTEREST IN BECOMING A MORE SUCCESSFUL PERSON WITHOUT THE WORRIES OF HUGE COSTS ON THE ROAD THERE. THEREFORE I BELIEVE IN PIRACY, AND I PROUDLY AM ONE. CRITICIZE ME IF YOU WANT, AT LEAST I WILL STAND FOR WHAT I BELIEVE IS RIGHT!!

[Matt E. @ Apr 27th 2006 11:25PM]

Seems they watched a marathon session of Michael J. Fox's "The Secret of My Success" to get inspired to do this.

Hahahaha! I luv it when the little guy sticks it to the man.

[Ian @ Apr 28th 2006 12:22AM]

"Thanks SW, WhipLash dont you think a company as large as Microsoft needs that $200+ per OEM OS? I don't, they have enough money as it is."

LOL. WTF ever comrade. Install Linux and wank off with your tux plushie.

I think BMW M5s are over priced. I wonder if the cops will buy the excuse when I steal one. Probably not.

[neale @ Apr 28th 2006 1:29AM]

ian: theres a difference between stealing physical objects and software.

windows is over priced, and its full of bugs etc. when they make a product worth paying for, then they deserve the money. releasing an updated piece of crap doesnt cut it. EA springs to mind

[bannor @ Apr 28th 2006 2:47AM]

... waiting for neale to demonstrate the difference between stealing physical and non-physical objects. The only reason you steal software and not cars if because it's *easy* and there's little chance of getting caught.

Also, if Windows is full of bugs, then surely it's not worth buying *or* stealing (pirating). As Ian said, one can install Linux if one chooses.

You can justify anything if you want to badly enough ...

[tekdemon @ Apr 28th 2006 3:08AM]

lol you have to admit that it's pretty funny because in this case they didn't even just knock off NEC devices but they designed their own devices and then just branded them as NECs! And they were of generally good quality to boot!

I'd assume the NEC designed stuff that the factories thought they were making for NEC would likely be almost identical in quality to the original runs that NEC ordered anyway. Same factory thinking that they were making them for the same company=same quality.

So while I do in fact feel kinda bad for NEC because it's never fun to watch other people exploit the brand you spent money building up a reputation for, I'm also kinda impressed that someone took counterfeiting to such a new level of quality and...well just plain cleverness.

Now if someone manages to print up some Apple business cards and actually get a touch screen video ipod made BEFORE Apple does that would be hilarious.

[tekdemon @ Apr 28th 2006 3:10AM]

lol you have to admit that it's pretty funny because in this case they didn't even just knock off NEC devices but they designed their own devices and then just branded them as NECs! And they were of generally good quality to boot!

I'd assume the NEC designed stuff that the factories thought they were making for NEC would likely be almost identical in quality to the original runs that NEC ordered anyway. Same factory thinking that they were making them for the same company=same quality.

So while I do in fact feel kinda bad for NEC because it's never fun to watch other people exploit the brand you spent money building up a reputation for, I'm also kinda impressed that someone took counterfeiting to such a new level of quality and...well just plain cleverness.

Now if someone manages to print up some Apple business cards and actually get a touch screen video ipod made BEFORE Apple does that would be hilarious.

[gem @ Apr 28th 2006 5:33AM]

the plot for Ocean's Thirteen should revolve along this storyline.

[Bobby @ Apr 28th 2006 6:26AM]

I think the real question is, if the buyer knew, and the seller knew, and they weren't just stealing product designs but actually starting to design their own products, what was the real problem here? No one was actually fooled into thinking they were getting NEC items. Close to nothing at all has been stolen from anyone.

[whitey @ Apr 28th 2006 8:07AM]

Looks like the slashdot crowd made it over. If we move quickly, we can distract them. I'll tell them Red Hat was bought by Microsoft, and while they're stunned, you tell them that the writers of the O.C. are launching a new Star Trek show... Their heads will explode and we can all go back to normal life.

[Coyote @ Apr 28th 2006 8:38AM]

Piracy issues aside, if these guys were paying for their own R&D and developing new products. Why even use the NEC name (for recognition i assume)? The bit about NEC even calling them good quality was great though. And yes China is a haven for this type of activity my company too has almost fallen prey to it.

[Racekarl @ Apr 28th 2006 9:36AM]

YES, Piracy IS an attempt to destroy foil, and injure a comany, how can it be otherwise?

What about the children of the people who wrote the software? Should they go hungry because you examined the accounting, understand all the costs, were there when it was built, and are therefore are perfectly qualified to determine that the software is overpriced?

I could barely write this because I was laughing so hard about the fact that someone actually wrote that there was a moral difference between stealing something physical vs. stealing software. Well, laughing or crying, one or the other.

My son is fed and clotherd because people pay for my software. Many other people's are as well. If I could post of picture of him here I would so you could all look at it when you pat yourself on the back for stealing software.

[David @ Apr 28th 2006 10:35AM]

This is one of the Greatest things I have ever heard. These guys(gals) deserve a medal.

[blah! @ Apr 28th 2006 11:27AM]

Your son probably has a better life than others...theres many people who cant afford allot of todays software...people that actually sweat in their jobs and not sit in front of a computer all day...i write software myself and although it would benefit me for people to not pirate, i have learned to accept it as part of society...

I know alot of the people downloading illegal software wouldnt buy it if they couldnt get it free....the numbers out there are bogus...be happy with what you got and dont be so greedy....theres others out there in true poverty...

[droy @ Apr 28th 2006 11:39AM]

What's an ipod?

[Pat McKrotch @ Apr 28th 2006 4:09PM]

neale is right guys. If you think something is unfairly priced, it becomes totally legal to steal it.

Microsoft has every right to charge whatever they want for their products, even if they do suck. If you don't like it, don't buy, but your an idiot if you think you somehow deserve not to pay for it.

[Karl Viklund @ Apr 29th 2006 10:36PM]

LoooooooL. NEC got owned.
That's all I have to say.

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