Many of the batteries, it turns out, are fakes, made and sold by a Chinese manufacturer.

It's a scenario that plays out more often than OEMs would care to admit-be it batteries, semiconductors or network equipment-according to industry executives speaking at the recent Supply Network Conference hosted in San Jose, Calif., by Electronics Supply & Manufacturing and the Institute of Supply Management.

"We have seen counterfeit products come through every channel, including OEM excess, franchised distributors and even from the factory," said Sid Mohasseb, chief executive officer of Vital Source Inc. and a director of the Independent Distributors of Electronics Association (IDEA; Princeton Junction, N.J.).

While counterfeiting is a global problem, China presents a pressing concern for the electronics industry, speakers at the Supply Network Conference said, because of the rapid migration of manufacturing to its fast-growing industrial centers.

Daryl Hatano, an executive with the Semiconductor Industry Association (San Jose), sees a dual problem in China. Fines are low and "damages are treated as a cost of doing business."

What can electronics companies do to protect themselves? First, acknowledge the problem. Then, share information with your design, manufacturing and distribution partners. The best deterrent is a tight supply chain, said IDEA's Mohasseb.

Suppliers can also employ such authentication techniques as software keys, watermarking or radio frequency identification, said Ram Manchi of the Alliance for Gray Market and Counterfeit Abatement (Fremont, Calif.).

Above all, deep knowledge of your suppliers through all levels of the supply chain is crucial, said Michael Kirschner, the president of Design Chain Associates (San Francisco).