In a protracted but rarely noticed battle against counterfeit electrical products, Schneider Electric's Square D division has taken on the role of detective, tracking down wayward distributors and tracing trails of evidence to find and sue key players in the lucrative trade in knockoff goods.
For Square D, a maker of circuit breakers for home and business use, it's not only revenue at stake; it's customers' lives and property.
The scourge of counterfeit products has dogged the company for decades, but only recently have officials seen fakes that are "almost indistinguishable on the outside." Steve Litchfield, who serves as assistant general counsel at Square D, says powerful computer design applications have helped close the gap between real and fake products in recent years.
The bogus goods enter the stream of commerce "through the brokers, the unauthorized wholesalers, the guys that deal just on the Internet — people that buy and resell basically on price only," Litchfield says.
How those products get to the U.S market is a matter of some speculation.
"It's possible that the distribution channels of the drug traffickers ... have been shifted to be used by the counterfeiters because the counterfeit products seem to garner much less prosecutorial attention than cocaine," he says.
That lack of attention — Litchfield says that, as far as he knows, no sellers of counterfeit Square D products have been arrested in the United States — has turned Schneider into its own police force. Most of the company's success stems from the first lawsuit it filed, in April 2006, against a wholesaler who sold counterfeit products. Through subpoenas and an investigation of the offender's records, the company was able to track where the wholesaler sold the products and from whom he had bought them. Schneider has filed a total of 12 lawsuits in its anti-counterfeiting campaign.
The company is attacking the problem on other fronts, too. Litchfield says company officials are hopeful that they can prevail upon government offices, such as Immigration and Customs Enforcement, the Department of Justice, and the FBI, to bring criminal cases against offenders.
"We're trying to put together a complete picture of the situation so that we can get the attention of the government and gain successful prosecution," he says.
Square D is also working with the National Electrical Manufacturers Association to create more awareness of the problem in the industry, and with Chinese officials to conduct more raids of rogue manufacturing operations.
The multi-tiered effort has cost the company millions of dollars, but Litchfield says the greater concern is safety. A knockoff circuit breaker may look convincing on the outside, but when it encounters an overload or a short circuit, it often fails to defuse the threat. "Then you have a dangerous condition existing somewhere else in your electrical lines," he notes.
For end users, Litchfield says, the remedy is simple: "If you are going to buy electrical products, especially circuit breakers, you should buy them through an authorized distributor or direct from the manufacturer."
This article originally appeared in the February 2008 issue of Managing Automation.