One man's war on copyright breaches
Leu Siew Ying in Dongguan
Executive's company has lost up to $50m in sales, but complaints fall on deaf ears
Intellectual property rights (IPR) violations in China are taking such a toll on a Dongguan company that one executive no longer feels he can ignore the breaches, despite knowing the battle is pointless.
Mr Lam, deputy general manager of an original design manufacturing company (ODM), is trying to redress the wrongs. He refuses to reveal his firm's name or even the products it manufactures for fear of discrimination.
Since it first started investing in the city 19 years ago, his company has spent $3 million a year on research and development (R&D) for its products.
But this is nothing compared with losses from copyright infringements. At the recent autumn session of the China Export Commodities Fair (CECF), the company estimated it had lost $40 million to $50 million in sales.
Of the 30 rival companies at the fair, nearly every one had several products on display that breached the company's registered patents.
Mr Lam lodged several complaints with the fair's IPR office and was told to show a company letter authorising him to act on its behalf.
'It took us half a day to lodge our complaints. In the meantime, we saw many people coming to complain, who were sent away because they did not have a certain document or another ... I wonder if they are really enforcing IPR protection or [just] putting on a show,' Mr Lam said.
When the IPR office acted on his complaints, it confiscated a few products from half the reported violators and said harsher action would be taken.
'Who are they trying to protect? We are not against the government ... we want them to say these are counterfeiters so that we can proceed with legal action,' Mr Lam said.
'Foreign brands like Louis Vuitton are getting better protection but how much attention is the government giving to second and third-tier companies like us?'
Spokesmen from the CECF and the Guangzhou Intellectual Property Office said the office at the fair was temporary. 'When the fair is over, we will disband the office. I'll have to look for the person in charge to answer your queries,' the CECF spokesman said.
The incident at the fair is just one of many futile battles the ODM company has fought. 'Two years ago, we received feedback from our customers that they can buy our products from other suppliers at a cheaper price,' said Mr Lam. 'Things have got worse. Even before our new products hit the counters, our competitors have produced moulds to start production.'
Mr Lam said almost $200,000 had been spent on legal and investigation fees so far and more than $1 million would be needed if the firm decided to take court action.
After six months, the company has enough evidence to launch a raid on two infringers in Jiangsu province and is now liaising with authorities for help.