Product Piracy

26 March, 2021

First published in the March 2021 issue of Quarry Management

In the fight against fake bearings, Schaeffler’s unique data matrix codes make investigations easier

As a purchaser of bearings, you need to be sure that the products you are buying are genuine and will perform as the product datasheet states, as counterfeit bearings are a frequent cause of personal injury and material damage to vehicles and industrial machines. Most purchasers do not need to worry because they buy these products direct from the manufacturer or via a certified distributor. This method of procurement will ensure that bearings are genuine and any technical problems with the product are resolved quickly and efficiently.

However, according to Ingrid Bichelmeir-Böhn, leader of the global Brand Protection Team at Schaeffler, brand and product piracy is not a phenomenon that is limited to Asia or south-east Europe; it also takes place right on our doorstep. ‘The German and European markets are no longer only flooded with counterfeit luxury or consumer goods, there is also an increase in counterfeit industrial products that are relevant to safety, such as rolling bearings,’ she said.

So, why do some companies still continue to purchase counterfeit bearings? Cost is almost certainly the overriding factor. However, although the offer price for the bearings may initially look attractive, buyers must ask themselves what the potential hidden costs are in terms of product liability and credibility with their customers if the product turns out to be counterfeit and things start to go wrong. These could, for example, be critical bearings on high-value machinery in a production plant. The buyer, therefore, needs to take into account the cost of any production downtime if the bearing fails early.

In addition to lost sales and significant damage to corporate image through inferior-quality goods that may affect future business, there have been enormous costs arising from the investigation, seizure and professional disposal of counterfeit bearings. The disposal of such goods requires tight security, as only fully destroying the counterfeits will eliminate the danger for the consumer.

But the damage affects not only those companies that produce brand-name goods and invest heavily in research, development and quality assurance. It also affects those companies that install these components, as rolling bearings are used in virtually every piece of rotating plant and safety-critical machinery and vehicles, from machine tools to mobile crushers and off-highway trucks.

Whenever customers or sales partners have reason to believe that a Schaeffler bearing they have purchased may be a counterfeit, they can contact the company’s Brand Protection Team (BPT) – the central department responsible for inquiries related to counterfeiting – either directly at piracy@schaeffler.com or via one of Schaeffler’s national companies.

Counterfeiting on a global scale

The BPT receives many of these types of inquiries, and events over the last few months show that counterfeit products are commonly found on a global scale. During a raid that took place in Spain in 2010, large quantities of counterfeit Schaeffler bearings were identified. The subsequent legal proceedings took nine years to complete, and it was not until December 2019 that the goods that had been seized could finally be destroyed. Those who might have purchased these counterfeit bearings were, therefore, saved from both technical damage in potential applications and financial losses.

At the start of January 2020, the BPT received an inquiry from the customs office in La Spezia, Italy, where a container of suspicious Schaeffler-branded rolling bearings had been stopped in transit. Once the BPT specialists saw the photographs of highly suspicious goods submitted via the OriginCheck app, they headed to La Spezia to check for themselves. Their suspicions were confirmed: 1,236 counterfeit Schaeffler rolling bearings were on their way to Morocco. The BPT requested the seizure of the goods, thus setting proceedings in motion to ensure the destruction of the counterfeit rolling bearings.

Data matrix codes

Schaeffler sales partners regularly send inquiries regarding suspicious products to the BPT, who thoroughly review every case. The data matrix code (DMC) – a unique code for each Schaeffler bearing – plays an important role here. Schaeffler have been able to identify duplicated codes on counterfeit products that had originally been applied to original genuine Schaeffler products.

The first of these duplicated DMCs was identified by the BPT at the end of 2019. This code was immediately tagged in the system and reported as suspicious to the OriginCheck app’s users (the app is available free of charge for iOS and Android operating systems, in German and English, via the Apple App Store and Android Play Store). Once a DMC is marked as a counterfeit in the system, all subsequent inquiries relating to that code trigger a red warning message. Soon after blocking the code, Schaeffler received inquiries regarding the same code from several countries, including Greece, Brazil and Russia. Thus, it became clear that this code had been used worldwide for different products. The counterfeiters have clearly been at work – and Schaeffler are currently investigating.

How you can help

Should you come across a similar case, photographs of the suspect products should be sent to Schaeffler so they can establish beyond doubt whether the code in question has been copied and used for counterfeit products. The company recommends using the OriginCheck app to draw on the experience that the Brand Protection Team is continuously gathering to help detect suspicious and counterfeit goods.

To report suspicious/counterfeit Schaeffler bearings, contact the BPT at: piracy@schaeffler.com