How, then, do companies arrive at the numbers used to describe a seizure? The answer varies from client to client. Some use the average price of a genuine product, which they consider the amount of a sale lost to a counterfeit. Depending on the product, however, this might not reflect the truth. Take, for example, a luxury handbag that sells for US$3,000. Knockoffs of that handbag can be purchased in many parts of the world for less than $100. It is a bit of a stretch, however, to assume that everyone who purchases a counterfeit handbag would have purchased the genuine article if given the chance. That is why some companies assign a percentage of the cost of a genuine product, say 30 percent, when calculating losses attributable to customers buying knockoffs.
Still other companies assign values based on sales increases seen in the wake of seizures of counterfeits. For example, one of our investigations resulted in the seizure of 15,000 electrical parts. The next month, our client saw sales of that product spike by over US$150,000. Consequently, they assigned a value of $150,000 to the seizure.
One other point to keep in mind: Intellectual-property investigations are often plagued by the same question that is debated by narcotics departments around the world: Is it better to seize 1 million counterfeit products and arrest nobody, or arrest the number-one counterfeiter in the world but make no seizures?