Refurbished vs. Remarked - A Disturbing Trend
Refurbished parts are defined as “parts that have been renovated in an effort to restore them to a ‘like new’ condition, e.g., leaded parts may have had their leads realigned and re-tinned and subjected to cleaning agents and chemical processing”i But what if this “restoration” process also involves altering the part’s surface and remarking?
In recent months ERAI has identified a disturbing trend particularly, but not exclusively, involving Chinese suppliers and service providers, whereby remarked parts are being sold or identified as refurbished. It’s as if these individuals believe they have circumvented the laws that have been broken if they merely identify the parts as refurbished as opposed to new. They have not. Organizations are violating intellectual property right law even if the true nature of the part is disclosed.
Parts that have been resurfaced and remarked by an unauthorized third party, whether sold as used, new or refurbished, have been completely devalued. Resellers around the world would be far better off leaving used, reclaimed, surplus parts in their original condition and selling those parts as used and without supply chain traceability. If the true condition of the goods could be seen, organizations in need of these parts, which might be obsolete or in short supply, can make an informed decision and take appropriate steps to mitigate the risks associated with parts that may not have been properly stored and/or handled. Used parts have value and while their use may not be approved for life or mission critical applications, they may be acceptable in non-critical applications.
Refurbishing parts should not include sanding, sandblasting, microblasting, acid etching, blacktopping, or remarking. Even if the part passes electrical testing, contains the correct die and is marked with the correct part number, once the parts are remarked by an unauthorized third party, they are counterfeit.
In closing, organizations need to pay close attention to industry recognized and/or adopted terms and definitions and should be sure to comply with intellectual property rights laws in your country. For your convenience I have enclosed a list of key terms referenced in this article. ERAI has created a comprehensive glossary of terms and definitions which is regularly amended to comply with the most up-to-date standards and regulations. This valuable resource is available on the public portion of our site (www.erai.com) which means membership is not required to access this free, publically available tool.
If you have questions or comments regarding this topic please do not hesitate to contact me. (email@example.com)
Blacktopped: A term used to describe the intentional covering of the original manufacturer part markings or masking the signs of rework and removal of original part markings.ii
Any part, documentation, packaging, labeling, or identifying information that has been modified so as to fraudulently misrepresent authenticity.ii
A fraudulent part that has been confirmed to be a copy, imitation, or substitute that has been represented, identified, or marked as genuine, and/or altered by a source without legal right with intent to mislead, deceive, or defraud. vi
Counterfeit Electronic Part means an unlawful or unauthorized reproduction, substitution, or alteration that has been knowingly mismarked, misidentified, or otherwise misrepresented to be an authentic, unmodified electronic part from the original manufacturer, or a source with the express written authority of the original manufacturer or current design activity, including an authorized aftermarket manufacturer. Unlawful or unauthorized substitution includes used electronic parts represented as new, or the false indication of grade, serial number, lot number, date code, or performance characteristics.v
A fraudulent part that has been confirmed to be a copy, imitation, or substitute that has been represented, identified, or marked as genuine, and/or altered by a source without legal right with intent to mislead, deceive, or defraud.vi
An unauthorized a) copy, b) imitation, c) substitute, or d) modified electronic part, which is knowingly, recklessly or negligently misrepresented as a specified genuine electronic part of an authorized manufacturer; or (2) a previously used electronic part which has been modified and is knowingly, recklessly, or negligently misrepresented as new without disclosure to the customer that it has been previously used.vii
A counterfeit is an electronic part that is not genuine because it: is an unauthorized copy; does not conform to original OCM design, model, and/or performance standards; is not produced by the OCM or is produced by unauthorized contractors; is an off-specification, defective, or used OCM product sold as "new" or working; or has incorrect or false markings and/or documentation.viii
An item that is an unauthorized copy or substitute that has been identified, marked or altered by a source other than the item’s legally authorized source, and has been misrepresented to be an authorized item of the legally authorized source.ix
An item that is an unauthorized copy or substitute that has been identified, marked and/or altered by a source other than the item’s legally authorized source and has been misrepresented to be an authorized item of the legally authorized source.x
(1) An authorized copy or substitute part that has been identified, marked and/or altered by a source other than the part’s legally authorized source and has been misrepresented to be from a legally authorized source; (2) An item misrepresented to be an authorized item of the legally authorized source; or (3) A new, used, outdated, or expired item from a legally authorized source that is misrepresented by any source to the end-user as meeting the performance requirements for the intended use.xi
Counterfeit electronic part means an unlawful or unauthorized reproduction, substitution, or alteration that has been knowingly mismarked, misidentified, or otherwise misrepresented to be an authentic, unmodified electronic part from the original manufacturer, or a source with the express written authority of the original manufacturer or current design activity, including an authorized aftermarket manufacturer. Unlawful or unauthorized substitution includes electronic parts represented as new, or the false identification of grade, serial number, lot number, date code, or performance characteristics.xii
A part made or altered to imitate or resemble an approved part without authority or right, and with the intent to mislead or defraud by passing as original or genuine.xiii
Counterfeit trademark goods shall mean any goods including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation.xiv
Electronic Waste (E-Waste): Discarded electronic devices, assemblies, sub-assemblies, components, and substances involved in their manufacture or use. E-Waste is exported to lesser-developed low wage nations such as China, India and parts of Africa due to mediocre or non-existent environmental standards and working safety laws. According to the US Environmental Protection Agency, millions of tons of electronic waste is gathered and exported annually to these regions. Only a small percentage of the waste collected is recycled. The balance of this material is exported overseas to “dismantling shops” where precious metals and electronic components are extracted for resale. This continuous supply of material is fueling the counterfeit market. International treaties are supposed to prohibit and deter the exportation of obsolete computer hardware from developed to developing countries; however, there are loopholes in the system. The waste that is sent to these regions for processing is done so illegally by transporting the goods through alternate ports, disguised as charitable donations or is done despite international laws and with lack of controls. It is well known that China is the largest recipient of E-Waste and that they have found more than one way to profit from global waste disposal. In certain regions of China, entire communities rely on E-Waste and counterfeit component trade as a source of revenue.
Microblasting: The process of microblasting uses a very fine abrasive media at 10 to 50 micron size which is then propelled through a fine-tip nozzle. This is used to texture or cut through materials where exacting detail is required. See also Sandblasting and Relabeling.xv
New Part: (1.) Electronic Components that have not been previously used in any capacity. (2.) Goods that are free of any physical defects such as: scratches, test marks, third party markings, programs or bent leads. (The leads on NEW parts should be in pristine condition; this does not mean refurbished, if the leads have been retinned / refurbished, they should be classified as refurbished.) (3.) New product should be packaged in the original manufacturers packaging (tubes, trays, reels, or as is specified by the manufacturer). This does not mean the original factory box OR factory sealed. (4.) Components in tubes and in trays should have the same date code, lot code and country of origin. Components on a reel should have the same date code, lot code and country of origin unless otherwise specified on the original factory label. (i.e., as was packaged by the original manufacturer) A distributor can sell more than one date code in a shipment, however all components in a single tube, tray or reel, etc., should contain a consistent date code, (including week code and lot code) and country of origin. (5.) New product does not need to be factory sealed in order to meet the industry standard definition of "new". However, moisture sensitive and static sensitive devices should be packaged in the proper ESD packaging material.xvi
Reclaimed Part: Large quantities of electronic equipment containing working devices are scrapped. Valuable components can be recovered for reuse; however, uncontrolled removal can damage and/or compromise the original electrical performance, reliability and operational life. These compromised parts can then be sold into the supply chain.xvii
Recycled Part: (1.) A counterfeit part type. (2.) Components that have been removed from a used system, repackaged and remarked and then sold in the market as new. Note: “The most widely discussed counterfeit types at the present time are the recycled and remarked types. It is reported that in today’s supply chain, more than 80 % of counterfeit components are recycled and remarked . In the United States, only 25 % of electronic waste was properly recycled in 2009 . That percentage might be lower for many other countries. This huge resource of e-waste allows counterfeiters to pile up an extremely large supply of counterfeit components. The components become recycled when they are taken from a used system, repackaged and remarked, and then sold in the market as new. These recycled parts either may be non-functioning or prior usage may have done significant damage to the part’s life or performance.”xviii
Remarked Part: Parts or devices in which the original part markings were removed or covered and then marked with a new part marking.xix
Note: “In remarking, the counterfeiters remove the old marking on the package (or even on the die) and mark them again with forged information. During the remarking process, the components’ packages are sanded or ground down to remove old markings (part number, date code, country of origin, etc.). Then, to cover the sanding or grinding marks, a new coating is created and applied to the component. Components can also be remarked to obtain a higher specification than they are rated for by the original component manufacturer (OCM), e.g., from commercial grade to industrial or defense grade.”xx
Sandblasting: The process of smoothing, shaping, or cleaning a hard surface by forcing solid particles across that surface at high speeds.xxi
Sanding: The act of removing original manufacturer markings by sanding or other abrasive process. In terms of counterfeiting, the act of removing the top and/or bottom markings on a chip for the purpose of remarking.xxii
Used Part: Product that has been electrically charged and subsequently pulled or removed from a socket or other electronic application, excluding electrical testing for acceptance. Used product may be received in non-standard packaging (i.e., bulk), and may contain mixed lots, date codes, be from different facilities, etc. Parts may have physical defects such as scratches, slightly bent leads, test dots, faded markings, chemical residue or other signs of use, but the leads should be intact. Used product may be sold with a limited warranty, and programmable parts may still contain partial or complete programming which could impact the part’s functionality. Used parts marketed as refurbished shall be declared as such.xxiii
i SAE Aerospace Standard AS6081 - Fraudulent Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition – Distributors
ii IDEA Standard IDEA-STD-1010-B
iii IDEA Standard IDEA-STD-1010-B
iv SAE Aerospace Standard AS6081 Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition – Distributors.
v DFARS 252.246-7007
vi SAE Aerospace Standard AS5553 Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition
vii SAE AS5553 Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition per the letter submitted to NASA and DoD, June/July 2013
viii U.S. Department of Commerce Bureau of Industry and Security Office of Technology Evaluation survey
ix Department of Defense Instruction, Number 4140.67 DoD Counterfeit Prevention Policy (April 26, 2013)
x NASA Federal Acquisition Supplement (NFS) Regulatory Review No. 1, 78 Federal Register 23199 (April 18, 2013)
xi Proposed DoD Defense Federal Acquisition Regulation Supplement: Detection and Avoidance of Counterfeit Electronic Parts (DFARS Case 2012-D055) published in the Federal Register on May 16, 2013
xii Final Rule, Department of Defense, Defense Acquisition Regulations System: Detection and Avoidance of Counterfeit Electronic Parts (DFARS Case 2012-D055) published in the Federal Register on May 6, 2014
xiii Federal Aviation Administration Advisory Circular 21-29C, Detecting and Reporting Suspected Unapproved Parts.
xiv Agreement on Trade-Related Aspects of Intellectual Property Rights Part III – Enforcement of Intellectual Property Rights Article 51 Suspension of Release by Customs Authorities
xv Engineering TV website.
xvi ERAI, Inc.
xvii iNEMI, “Development of a Methodology to Determine Risk of Counterfeit Use” by Mark Schaffer.
xviii “Counterfeit Integrated Circuits: Detection, Avoidance, and the Challenges Ahead” by Ujjwal Guin, Daniel DiMase and Mohammad Tehranipoor
xix IDEA Standard IDEA-STD-1010-B
xx “Counterfeit Integrated Circuits: Detection, Avoidance, and the Challenges Ahead” by Ujjwal Guin, Daniel DiMase and Mohammad Tehranipoor
xxi “Screening for Counterfeit Electronic Parts” by Bhanu Sood and Diganta Das – Center for Advanced Life Cycle Engineering.
xxii IDEA Standard IDEA-STD-1010-B Acceptability of Electronic Components Distributed in the Open Market, Rev. B.
xxiii SAE Aerospace Standard AS6081 Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition – Distributors
SEE MORE BLOG ENTRIES