4007304505 e3008a7481 Are Chinese Copycats Convenient Scapegoats for Poor Preparation?
In a recent news article published in the Citizen Times, Brevard company finds competing with Chinese imitators difficult: SylvanSport grapples with foreign competition, we find a worn out story line about yet another Chinese copy cat:

SylvanSport founder Thomas Dempsey learned last summer that a product similar to one he’d patented was being made in China when a customer sent him a link to a Chinese company’s website.On the website, Dempsey found a recreational camper trailer that looked eerily like the one he designed and patented and sells through his eight-year-old Brevard, N.C., company.

So worn out is this old line, that it has become a veritable stereo type defense used anytime the Chinese further their own business interests on the ideas of others.

There is nothing new about copying business ideas. But intellectual property protection and most importantly enforcement is relatively new, and in places like China relatively insignificant–there’s a virtual analog for everything we have here in the USA- Chinese versions of Youtube, Facebook, Twitter, etc. etc.

In some cultures, and previous time periods imitations reflected a sense of honor among imitators and original idea generators. But the reality here is that without strong intellectual property laws, what business is going to bother with innovating anything to mass produce over years of product cycles if it can be stolen right out of the gates? Oftentimes, and in the case above, the “stolen ideas” replace the original innovation:

It was the beginning of what would be a nightmare for any small-business owner. Since then, distributors in South Korea and Japan have opted to market the Chinese company’s product instead of Dempsey’s. A Japanese distributor mistakenly thought it was buying products from SylvanSport’s Chinese factory, says Dempsey. Confused consumers have also emailed SylvanSport, asking about its affiliation with the Chinese product, owned by Wuyi Tiandi Motion Apparatus, a maker of dirt bikes and camping gear in Jinhua City in eastern China.

There’s even mention in the article that if Apple can’t deal effectively with Chinese copycats, then how can this small business expect to? But the real problem here is that foreign companies, like Apple, aren’t doing their due diligence, as this article on Apple’s iPad trademark being “stolen” in China suggests:

… really difficult to believe is that Apple and/or Apple’s attorneys would have done a deal to acquire rights to the iPad trademark in China without having done real due diligence on that trademark. Basic due diligence would have revealed that the PRC iPad trademark was registered to Proview-Shenzhen and at that point, Apple would have required Proview-Shenzhen (not Proview-Taiwan) sign on to the contract to assign or license the PRC mark. So the first thing to be learned from this (maybe) is to do your due diligence and make sure that when you are buying something or securing a license to something that you are in fact doing so with the company that is actually authorized to sell or license that item.

When Apple and other big businesses lose on the intellectual property front (often because of their own lack of due diligence), sure it’s damaging, but big companies like this oftentimes go international knowing the risks of being “copied,” and move forward with full knowledge of the calculated risks. In other words, they expect to profit whether they are “copied” or not in most cases, and look at the possibility of compromise as an acceptable risk. Obviously, they should file patents in every country where they plan to sell the product.

But small businesses like SylvanSport don’t seem to be calculating the risk in the same way. In SylanSport’s case, how can they feel victim to any Chinese company selling a product similar to theirs without coming to the table without a Chinese patent protecting their ownership interests?

Your thoughts?

Correction: This article was originally written under the assumption that SylvanSport manufactured its product in China, based on this quote in the original article: ” A Japanese distributor mistakenly thought it was buying products from SylvanSport’s Chinese factory, says Dempsey.”  Above is an updated version, with the aforementioned assumption and associated passages retracted. Thanks Heath Dotson for pointing this out.