Monday, 20 February 2017

Counterfait Parts, Where Copyright Means Copy-Is-Right Part 2

Why buy fakes product?

Love has a theory for what drives customers to buy fakes. He draws a line graph with price rising on the Y-axis and likelihood of a counterfeit increasing on the X-axis. He calls it the LOP Theorem; the letters stand for “legal,” “opportunistic,” and “piracy”. He points to the upper-left corner: “Here is a Venge frameset for $3600 that’s clearly legit.” Then to the lower right: “At $50, it’s obviously a fake and you have a piracy-inclined buyer. But there’s a gray area where people are opportunistic,” he continues, drawing a large circle in the middle. “They may wonder, ‘Is this a scam, or am I just getting a good deal?’

Love’s theory make sense to Dr Dan Ariely, a professor of behavioral economics at Duke University who’s studied the psychology of counterfeit buyers. We convince ourselves that it’s okay to buy a fake, he says. “There is a rationalisation where you say, ‘These companies make too much money, and this frame is made of the same material as the real ones,’” he says. These rationalisations are generally rooted in buyers’ perceptions – beliefs that are only sometimes true. For instance, many consumers believe that because almost all modern cycling gear is made in Asia, it all comes out of the same factories.

“About 15 years ago, a lot of the European and American brands began to outsource their production,” says John Neugent, a former bike industry executive who helped brands do exactly that. But there’s a broad spectrum of factories in Asia making cycling gear, from those that make products exactly to the specification of the brand, to so-called “open mould” suppliers, to full-on counterfeiters. The world’s top bike brands have their frames made in Asia not just because labour costs are low but because the facilities and the framebuilding technologies built up over 30+ years are world-beating.

The circumstances here are nuanced. By outsourcing to Asia, Neugent explains, the bike industry bears some responsibility for the problem. “In Asia, even if you have intellectual property agreements with the factory, when you show people how to build your products, you teach them trade secrets,” he says, adding that trade secrets are not subject to patent. “If the factory manager leaves and starts his own company, he has that knowledge. It’s just the way the business works.”

Another consumer perception: skyrocketing retail prices mean companies are getting rich even as they take advantage of cheap manufacturing in Asia. That’s only partly true. In fact, the cost of manufacturing in China has risen over the past decade to the point that $1 of manufacturing power in the US equals 96 cents in China. As well, direct comparisons of products show that retail prices have in some cases remained static or even declined over the past decade. 

What is true: at the high end, prices have exploded. Cannondale’s SuperSix EVO Hi-Mod Team, Trek’s new aero Madone series, Specialized’s new Venge ViAS – all can make a significant dent in an annual wage. It’s no surprise, then, that consumers may suspect they’re paying inflated prices when they’re inundated with listings on marketplaces that promise the same products, but at wholesale prices that cut out the middleman. “Customers are bombarded by $400 wheels,” says John Balmer, aftermarket category manager at SRAM. “Their trust is shaken. They wonder, ‘How can Zipp wheels really cost almost $3000? These seem like the same thing."

The Fake Ones

The fake frames may be the same shape as high-end frames but underneath they probably haven’t benefitted from the same complexity of design and lay-up. The top layer of carbon – which is for show and doesn’t hold the frame together – is no indication of what’s below. The best carbon frames – with “best” being subjective; best at climbing or all-day comfort? – will be made of up to 13 layers of carbon fibre of various stiffness moduli.

High-end frames are computer designed with Finite Element Analysis (FEA) programs to make sure the strips of carbon fibre are in the right place in the 3D jigsaw, determined by the fibre orientation relative to the frame section and to the stacks and plies of the layup in that part of the frame. To achieve a certain ride characteristic the aim will be for the high-end frame to be rigid in some zones, compliant in others. This is achieved with the precision layup of the strips of carbon fibre, with an optimum layering technique leading to consistent laminates. “Lay a sheet a few millimetres in the wrong direction or in the incorrect order and the characteristics and integrity of the frame may be compromised,” says Phil Latz, editor of Australia’s Bicycling Trade.

The layers of carbon plies are thin and precise in expensive frames; thicker and less precise in cheaper frames, and possibly slapdash in the fake frames. The factories producing the fakes may use questionable materials, including cheaper (and lighter, weaker and less stiff) fibreglass as well as carbon fibre (although the carbon repair workshops say they have yet to find any evidence of this).

The counterfait factories may not be so fussed about checking for voids, porosity or other internal flaws, and they may not pull out samples, cut them in half and check laminate thicknesses. Fake frames may be made with a greater concentration of woven carbon cloth rather than unidirectional fibres. The faked end product often looks just the same as the real thing, the only person who ever knows the fake is spongy to ride is the end-user, thousands of miles from the factory and who has nobody local to call should the frame flop. The counterfait factories’ quality-control manager is the end-user. 

To be continued...

Bike AU, Autumn 2016
E-book "Faking It" by

Ride On!

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