FOR IMMEDIATE RELEASE: December 6, 2010

SCHUMER: LI-BASED COMPANY D'ADDARIO, WORLD'S LEADING GUITAR STRING MANUFACTURER EMPLOYING 800, THREATENED BECAUSE OF CHINESE COUNTERFEIT OPERATION; CALLS ON FEDS TO ACT IMMEDIATELY


World's Leading Guitar String Maker, D'Addario, Employs Hundreds, But Pervasive Counterfeiting Operation in China Costs The Company Millions and Threatens Jobs On the Island

Schumer Urges Dept of Justice and Homeland Security Task Force To Shut Down Rogue Website Selling Counterfeit Strings and Work With US Trade Representative To Close Chinese Factory

Schumer: We Cannot Allow Illegal Chinese Knock-offs To Kill Long Island Jobs

U.S. Senator Charles Schumer today called on Department of Homeland Security Secretary, US Department of Justice (DOJ), and the Office of the U.S. Trade Representative to launch a coordinated crackdown on the makers and distributors of counterfeit D’Addario products. Based in Farmingdale, D’Addario is the world’s leading guitar string maker, employing 800 on Long Island, in the manufacturing of world class guitar strings. Despite the fact that D’Addario makes all of its strings in the United States, recent investigations have uncovered an extensive counterfeiting operation, based in China, that has been illegally producing and selling sub-grade counterfeit strings, under the D’Addario label, to consumers around the globe. Unsuspecting consumers can purchase the counterfeit strings – which the distributors claim are authentic – on the website Alibaba.com, making it all too easy to deceive the purchaser with fake guitar strings and accessories at low-cost. D’Addario has lost millions in revenue as a result of the counterfeiting operation, impeding job growth and putting current jobs at risk.  

Touring the Farmingdale factory today, Schumer called on Attorney General Holder and Homeland Security Secretary Napolitano to investigate and take all available enforcement actions to prevent this counterfeiting and urged the United States Trade Representative to pressure the Chinese government to shut down the factories producing the counterfeit goods.

“This is an in-your-face example of how the Chinese simply flaunt international law and destroy American jobs in the process,” said Schumer. “Right here on Long Island, we are losing the potential for significant job growth and we risk losing hundreds of jobs if we don’t crack down on the exportation and sale of counterfeit products coming out of China. Anyone who believes otherwise needs to come to Long Island and visit D’Addario. Counterfeiting is not just illegal – it’s a job killer. If the Chinese government is unwilling crackdown on these thieves, then we will.”

D’Addario is the largest manufacturer of music strings and accessories in the world, and employs 90% of its workforce in the United States. The company manufactures approximately 20 million guitar string sets per year and holds the number one or two market share in electric guitar, acoustic guitar, classical guitar and electric bass guitar strings. 

 

In an investigation launched by the company, D’Addario was able to purchase counterfeit strings sold online through a commercial website operating under the name Alibaba.com. The extent of the counterfeit operation was highlighted when a retailer from the United Kingdom contacted the Long Island-based company to complain about the poor quality of the strings it had purchased from the website. The distributor of the counterfeit goods, who used the name “Helen”, claimed her factory in China produced authentic D’Addario strings.  D’Addario’s investigation also uncovered the fact that seven out of ten sets of D’Addario strings sold in mainland China were fakes. The rampant counterfeiting of D’Addario’s products has prevented the company from any reasonable success in the large Chinese market, costing the company an estimated 200 jobs on Long Island and the U.S.

Makers of the counterfeit strings have also developed sophisticated techniques to evade U.S. customs. Packages are sent to the U.S. marked as a “gift”, and are wrapped in such a way to deter customers officials from opening them.

D’Addario has been working for years on its own to crackdown on counterfeiting, but so far has run into resistance from the slow-moving China Patent Trademark Office (PTO). Their submission for a trademark of their “Plant Waves” swirl logo trademark has been pending before Chinese PTO for five years. The Plant Waves logo can be found on many of their products including guitar straps, tuners, picks and a number of other items. While this organization drags its feet, factories in China have continued to produce counterfeit strings without fear of legal action – costing D’Addario millions in lost business.

 

Schumer called on DHS and DOJ to immediately include the D’Addario case in the joint DOJ-DHS web crackdown program, “Operation In Our Sites” and have Immigration & Customs Enforcement (ICE) seize the domain name and shut the site down.  Operation In Our Sites is a coordinated law enforcement effort by the Justice Department and the Department of Homeland Security to target online retailers of counterfeit goods. Schumer also called for the United States Trade Representative (USTR) to swiftly and aggressively press the Chinese government to shut down the counterfeit production in China of D’Addario rip-offs. The Office of The United States Trade Representative negotiates directly with foreign governments to develop trade agreements and resolve international trade disputes. Schumer urged the agency to use its authority to directly intercede with the Chinese government to eliminate illegal counterfeiting of D’Addario products.

 

A copy of Schumer’s letters can be found below.

 

 

     

December 6, 2010

 

The Honorable Eric H. Holder, Jr.
Attorney General of the United States
950 Pennsylvania Avenue, NW
Washington, DC 20530

The Honorable Janet Napolitano
Secretary
Department of Homeland Security
U.S. Department of Homeland Security
Washington, DC 20528

Dear Attorney General Holder and Secretary Napolitano,

 

Just last week, you successfully shut down 82 websites facilitating intellectual property infringement and theft.  I write today to urge you to investigate and, if appropriate, take similar actions against the commercial website Alibaba.com and its affiliates. 

 

Alibaba.com, part of a China-based group of internet-based businesses, appears to be engaged in the illegal sale and distribution of counterfeit goods.  The Alibaba.com website (and its affiliate, Aliexpress.com) currently sells and/or connects buyers to a dozen Chinese manufacturers and suppliers of D’Addario guitar strings.  According to New York manufacturer D’Addario, these guitar strings are fakes – D’Addario manufactures all its string products in the United States. 

 

D’Addario is a family business based in Farmingdale, Long Island.  Founded over 100 years ago, D’Addario has grown to be the largest manufacturer of music strings and accessories worldwide, making more than 20 million sets of strings, 2 million drumheads, and 25 million woodwind reeds per year in the United States.  D’Addario employs 1,000 people in the United States, including 800 on Long Island.  Counterfeiting is a major threat to the continued economic health of D’Addario and its workers. 

 

Recent investigations undertaken by D’Addario – at its own expense – uncovered an extensive counterfeiting operation, based in China, illegally producing and selling sub-grade counterfeit strings under the D’Addario label, to consumers around the globe.  In its investigation, the Long Island-based company was able to purchase counterfeit strings being sold online through the Alibaba.com website.  D’Addario also determined the counterfeit strings are being sold through the Alibaba.com website in other countries. 

 

D’Addario has lost millions as a result of this intellectual property theft.  The counterfeit products are displacing the sale of real D’Addario products within China and also are being exported to and displacing legitimate D’Addario sales in other countries.  In short, the Chinese fakes are eroding D’Addario brand equity, hurting D’Addario’s bottom line, endangering its markets overseas, and undermining its ability to continue to grow its exports.  

 

U.S. manufacturers like D’Addario cannot fight the sale of counterfeit products alone.  For this reason, I respectfully request that the Departments of Justice and Homeland Security investigate whether the Alibaba.com website and/or its affiliates are engaged in or facilitate the illegal sale and distribution of counterfeit D’Addario products and determine whether any enforcement actions are warranted, including seizing the domain name(s). 

 

 

 

     December 6, 2010

 

The Honorable Ron Kirk

U.S. Trade Representative

600 17th Street, NW

Washington, DC 20508

 

Dear Ambassador Kirk,

 

High levels of counterfeiting in China continue to erode the competitiveness of U.S. manufacturers and their workers.  Recent investigations undertaken by New York music strings manufacturer D’Addario – at its own expense – uncovered extensive counterfeiting operations, based in China, illegally producing and selling sub-grade counterfeit strings under the D’Addario label, to consumers around the globe.  I write today to ask that you press China to shut down the manufacturers of counterfeit D’Addario string products. 

 

D’Addario is a family business based in Farmingdale, Long Island.  Founded over 100 years ago, D’Addario has grown to be the largest manufacturer of music strings and accessories worldwide, making more than 20 million sets of strings, 2 million drumheads, and 25 million woodwind reeds per year in the United States.  D’Addario employs 1,000 people in the United States, including 800 on Long Island.  Counterfeiting is a major threat to the continued economic health of D’Addario and its workers. 

 

In addition to uncovering extensive counterfeiting operations, surveys conducted by the company found that seven out of ten sets of D’Addario strings sold in China are fakes.  Counterfeit D’Addario music strings manufactured in China also are being sold in the United States and around the world, including through the commercial website Alibaba.com and its affiliate Aliexpress.com.  Makers of the counterfeit strings also have developed sophisticated techniques to evade customs officials.  For example, packages are sent to the U.S. marked as a “gift”, and are wrapped in such a way to deter customs officials from opening them.

 

D’Addario has lost millions as a result of this intellectual property theft.  The counterfeit products are displacing the sale of real D’Addario products within China and also are being exported to and displacing legitimate D’Addario sales in other countries.  The Chinese fakes are eroding D’Addario brand equity, hurting D’Addario’s bottom line, endangering its markets overseas, and undermining its ability to continue to grow its exports.  

 

U.S. manufacturers like D’Addario cannot stop the manufacture of counterfeit products alone, particularly in a country like China with lax protection and enforcement of intellectual property rights.  For this reason, I respectfully request that the Office of the United States Trade Representative review D’Addario’s counterfeiting claims and work with Chinese officials to crackdown on companies manufacturing and selling counterfeit D’Addario’s music string products.  Thank you for your time and consideration.

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