New and Troublesome Definition of the Term “Counterfeit Part”

Defense and Aerospace subject matter experts have included “used parts represented as new” in the definition of the terms “counterfeit part” and “counterfeit component” for the past several years and for good reason.

A significant proportion of counterfeit parts (per today’s definition) reported by industry consist of parts that are “used parts represented as new”. Industry subject matter experts have described in the literature and in briefings on the counterfeit parts issue how “used parts represented as new” can present a reliability risk. During the Senate Armed Services Committee hearing on 8 November 2011, Senator Carl Levin, D-Mich., reported “The definition of ‘counterfeit’ as it relates to electronic parts, which has been endorsed by the Department of Defense and defense contractors alike, includes both fakes and previously used parts that are made to look new and are sold as new.” (SAE Aerospace Standard AS5553, adopted by DOD in August of 2009, includes “used parts represented as new” in its current definition.) Witnesses at this hearing discussed how used parts harvested from e-waste serves as feedstock for counterfeiters. Specific examples discussed during the hearing included failures attributed to “previously used parts counterfeited to make them appear new”. Subsequent to this hearing, the US Congress agreed to requirements for “Detection and Avoidance of Counterfeit Electronic Parts” which now appear in Section 818 of the National Defense Authorization Act for Fiscal Year 2012. Section 818 will require the Secretary of Defense to “establish Department-wide definitions of the terms ‘counterfeit electronic part’ and ‘suspect counterfeit electronic part’, which definitions shall include previously used parts represented as new.”

Industry standards activity is underway that will conflict with this new direction from Congress to DOD

On 22 September 2011, SAE International initiated the G19D subcommittee ballot to approve AS6081, Counterfeit Electronic Parts; Avoidance Protocol, Distributors. AS6081 “was created to provide uniform requirements, practices and methods to mitigate the risks of purchasing and supplying fraudulent/counterfeit electronic parts. … This standard sets forth practices and requirements for use by all distributors for Electrical, Electronic, and Electromechanical (EEE) parts purchased and sold from the Open Market, including purchased excess and returns.” At the time of this writing, the G19 subcommittee was reviewing responses to the ballot draft.

On 19 December 2011, SAE International released ARP6178, Fraudulent/Counterfeit Electronic Parts; Tool for Risk Assessment of Distributors. ARP6178 “was created to provide organizations with a tool to assess a supplier’s capability to prevent, detect, contain, and report suspect, fraudulent or confirmed counterfeit electronic components. … It is especially applicable for assessing distributors that sell electronic components without contractual authorization from the original component manufacturer.” ARP6178 is intended to supplement aerospace standards AS5553 and AS6081.

In the ballot draft of AS6081 and in the released ARP6178, the term “used parts represented as new” has been removed from the definition of “counterfeit parts”.

Neither the documents nor the associated ballots offer any information as to the compelling reason for proposing this major change. Though the draft mentions the existence of legal distinctions between counterfeit and fraudulent parts, there is no discussion of these distinctions or their relevance to the documents. Appendix A to both documents states that “used parts represented as new” are not counterfeit despite the fact they represent a significant proportion of counterfeit parts (per today’s definition) reported by industry. The documents are not clear about where they fall and how counterfeit avoidance control plans and verification requirements address them. A user could argue that “used parts represented as new” fall outside of the scope of these documents and have grounds to argue that “used parts represented as new” are compliant.

There are other descriptions within the Appendix A to both documents that could easily cause a protracted debate over whether or not an item is counterfeit and serve as an enabler to continued sale and circulation of counterfeits. According these documents, a part described by combinations of the following examples would not be considered counterfeit:

  • used parts represented as new
  • refinish matches plating configuration on labeling
  • same part number, date code, lot code, etc. as original
  • marking on part matches package type

Examples of counterfeits that meet all of these descriptions are associated with the high profile “USA v. Aljaff” case. According to US Department of Justice representatives associated with this case, the defendants purchased e-waste, removed integrated circuits from CCAs contained within, removed the die from within those integrated circuits, and shipped the removed die overseas for repackaging and marking to match the Original Component Manufacturer’s (OCM’s) product. Further details on this example are described in “Counterfeit Parts Avoidance Training for EEE Parts”, Jet Propulsion Laboratory, June 2011, and “Manufactured Counterfeits”, American Electronic Resource Inc., DMSMS & Standardization 2011 Conference September 2011.

In the opinion of this author, these new definitions for the term “Counterfeit Part” put forth by SAE International and its G19 committee and subcommittees has the potential to work against the efforts of the A&D industries and US Government agencies to deal with the counterfeit parts problem and conflicts with recent US Government legislation directed to the Department of Defense and its contractors. I hope SAE International and the G19 committee will reconsider this, particularly given the requirements of Section 818 of the National Defense Authorization Act for Fiscal Year 2012.

Henry Livingston

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2 thoughts on “New and Troublesome Definition of the Term “Counterfeit Part”

  1. Here are further thoughts to consider…

    To me we have a basic sequence of questions to answer…
     
    (1)    Are we (A&D industry and USG agencies) to be concerned about cases where a used part is passed off as new to a buyer and that part finds its way into DOD or NASA equipment?
    (2)    If the answer to (1) is yes, should the treatment of used parts presented as new and unused differ significantly from the treatment of fakes?
     
    Other than the IP infringement issue, at a very basic level I tend to think the treatment should not be different…. Both are cases where (a) someone passed them off with intent to deceive, and (b) should these escape undetected, could present a reliability risk.
     
    I can argue that a used part is potentially more dangerous than many variants of fakes. Many fakes do not work and though they would cause a disruption to the production of equipment, they would not escape and present an equipment reliability risk to the end user. In the case of used parts, unless one is looking for them, they could very well escape undetected…. Production test protocols would not necessarily detect them because….
    “Industry and Government inspection and test methods are designed to verify the integrity of authentic parts … not to detect counterfeits.” …
    http://home.comcast.net/~cetoolbox1/resources/Avoiding_Counterfeit_Electronic_Components_Part2.pdf

     

    • Leon Hamiter says:

      Henry,

      I completely agree that industry and military spec, plus ISO 9000, 9120, etc. etc are not designed to detect counterfeits. As it stands not that is the OEM responsibility and many of them only want to purchase the cheapest they can find and when they are obsolete they do not want to pay costs to authenticate them. This is the reason we started the CCAP-101 Certification Program. It is intended to be an intensive test and inspection sequence until something better is found. So far none of our Certified IDs have shipped a counterfeit–but I am sure it is only a matter of time. But in the meantime they have detected hundreds of counterfeits and did not deliver them.

      It is a complex situation and requires a number of solutions

      The Senate 1270 bill it has many holes in it any only creates thousands of bureaucracy jobs at EPA and Homeland Security. Our Scrap electronics will create huge piles before any thing gets done. This bill’s purpose is to grow the government and controls not solve the problems.

      Leon

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