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Honda, A2C2 backing counterfeit air bag law in 6 more states

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Honda is spearheading legislation in six states that will prohibit counterfeit air bags, citing along with the Automotive AntiCounterfeiting Council (A2C2), the dangers they pose.

Legislation is being considered, or soon will be filed, in Alaska, Illinois, Vermont, Utah, Missouri, and Mississippi.

“This requires a 50-state solution,” said Craig Orlan, American Honda Motor Co. state and local government affairs manager. “The Mississippi law is a little bit unique… it doesn’t go after the larger fish that we’re looking at who are manufacturing, importing, offering for sale, [or] listing these products online. We want to make sure that it encompasses all of those bad actors.

“It doesn’t define what an air bag is… a prosecutor might interpret an air bag only to be that cushion material and not a sensor and not an inflator or some of the other parts so that’s why it’s very important for us to be very clear about the part that we’re defining.”

HB 1092 would add definitions of “air bag” and “automobile supplemental restraint system (SRS)” in addition to what makes both counterfeit.

Air bag is defined in the bill as, “an inflatable restraint device for occupants of motor vehicles which is part of an automobile supplemental restraint system.”

The supplemental restraint system is defined as “a passive inflatable crash protection system that a vehicle manufacturer designs to protect automobile occupants in conjunction with a seat belt assembly, as defined in 49 CFR 17 571.209, and which has one or more air bags and all components required to ensure that each airbag: (i) operates as designed in a crash; and (ii) meets federal motor vehicle safety standards for the specific make, model and year of manufacture of the vehicle in which the air bag is installed.”

An air bag or SRS replacement component is deemed counterfeit under the bill if “without the authorization of a manufacturer, or a person who supplies parts to the manufacturer, displays a trademark that is identical or substantially similar to the manufacturer’s or supplier’s genuine trademark.”

The Mississippi law makes it illegal to install or reinstall, as part of an automobile SRS, “any object, component, part or device that causes a motor vehicle’s diagnostic system to fail to warn the motor vehicle operator that an air bag is not installed or that a counterfeit automobile supplemental restraint system component or nonfunctional air bag is installed in the motor vehicle.”

Orlan said Mississippi, unlike the other states, has air bag fraud law on its books, but it only applies to installers and reinstallers of air bags.

“Every state has its own unique criminal code so we have to sort of tweak it to fit into that puzzle, but it all does the basic same thing, which is establishing the crime of air bag fraud. That would include not just the installation or reinstallation of these products, but the importation, the offer for sale, the sale, et cetera as well as defining a couple of key terms like ‘air bag supplemental restraint system,'” Orlan said.

Similar bills to those that are currently being considered have already been signed into law in 34 states with the backing of A2C2. The nonprofit council is made up of 27 North American OEMs “to eliminate counterfeit automotive components that could harm U.S. consumers,” according to its website.

The first states chosen to lobby for passage were where Honda has a larger presence and those with key ports and other areas where the law might have more of an impact on keeping counterfeits out of the country like California, Washington, and New York.

Federal laws only go so far in preventing counterfeit air bags from making it across the border and to the market. For example, for an air bag or components to be seized, they would have to violate hazardous material or trademark laws. The first typically doesn’t apply because that involves improperly labeled explosives, Orlan said.

A2C2 said the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM) Consumers Act, effective last June, and the proposed  Stopping Harmful Offers on Platforms by Screening Against Fakes in Ecommerce (SHOP SAFE) Act are “steps in the right direction to help curb the availability and sale of counterfeit air bags.”

According to the Federal Trade Commission, the goal of the INFORM Consumers Act is “to add more transparency to online transactions and to deter criminals from acquiring stolen, counterfeit, or unsafe items and selling them through those marketplaces.”

The law also ensures online marketplace users have a way to report suspicious conduct concerning high-volume third-party sellers, the FTC said.

The SHOP SAFE Act would “provide for contributory liability for certain electronic commerce platforms for use of a counterfeit mark by a third party on such platforms, and for other purposes,” according to the bill text. A version of the act has been introduced in Congress every year since 2020.

Ninety percent of counterfeit products are imported from China or overseas, according to Orlan.

Trademark law, in the case of counterfeits, applies to a company’s trademark being used on a product without permission from the company that owns it, he said, and counterfeiters are getting smarter about working around trademarks.

“If you look at your side curtain or your passenger side [air bags], it’s going to say simply ‘air bag’ or ‘SRS,’ which stands for supplemental restraint system; that’s not a registered trademark,” Orlan said. “There’s no federal law against just importing a piece of plastic that might say SRS or that if somebody was just importing a cover, they can’t necessarily seize that. And once it enters the stream of commerce, it’s very difficult to track.”

Honda has learned from law enforcement that it’s helpful to have state laws in addition to federal to curb counterfeit air bags because it allows them to go after individual repair shops that are installing them within one state.

Collision repair technicians can aid in the search for counterfeiters by reporting deployed counterfeit air bags to the manufacturer, law enforcement, or the National Highway Traffic Safety Administration (NHTSA), Orlan said.

“We can go back and do that investigation to try to find out how that got into the vehicle in the first place,” he said. “If we can find out who installed these we can use these laws to secure the records of those installers and let other people who may be victims of this fraud know before they’re involved in an accident [and] before they get seriously injured as a result.”

A hearing on HB 1092 hadn’t been scheduled as of Friday afternoon. After introduction on Feb. 9, it was referred to the House Business and Commerce Committee.

A report from the Executive Office of the President, the 2023 Review of Notorious Markets for Counterfeiting and Piracy report (NML report), states that air bags brakes, oil filters, spark plugs, and other car parts are examples of products that can be particularly dangerous when counterfeited.

The report cites a description from the Homeland Security Investigations (HSI) National Intellectual Property Rights Coordination Center (IPR Center) of how they’re dangerous: “[C]ounterfeit air bags and their components can cause severe malfunctions ranging from non-deployment, underinflation, overinflation to explosion of metal shrapnel during deployment in a crash.”

A2C2 has demonstrated the risks as well. In side-by-side crash tests of vehicles, one equipped with a counterfeit air bag and the other with a genuine OEM air bag, the counterfeit bag burst apart and failed to protect the driver from significant impact, according to the NML report.

“To help reduce consumers’ exposure to the potential health and safety risks of counterfeit products, more effective criminal and border enforcement against the production, import, export, and distribution of counterfeit goods must be taken,” the report states. “For example, it is important to ensure that penalties, such as significant monetary fines and meaningful sentences of imprisonment, are available and applied to deter counterfeiting.”

The Executive Office of the President recommends businesses adopt practices that rely on licensed distribution of legitimate content and allow for negotiation with rights holders to obtain licenses.

Industry groups have developed a variety of best practices that can help combat counterfeiting and piracy. More information on that can be found in this 2021 report.


Featured image credit: Ayman Hussain/iStock

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