Last summer I reported on a new pop-up camper, the GO, designed by SylvanSport, a Brevard, North Carolina-based startup company
A follow-up report revealed that Wuyi Tiandi Motion Apparatus, a maker of dirt bikes and camping gear operating out of Zhejiang, China was manufacturing and selling counterfeit versions of the popular SylvanSport GO.
Sylvan Sport said that “this is an unusually blatant example illustrating the increasing problem of many of China’s most accomplished companies achieving their success by pilfering the intellectual property of other industrialized nations.”
Since then, distributors in South Korea, Japan, and Australia have opted to market the Chinese company’s product.
The confusion is compounded because several other companies thought SylvanSport had a Chinese factory, and that they were ordering product from it, USA Today reports.
A Japanese distributor mistakenly thought it was buying products from SylvanSport’s Chinese factory, says Tom Dempsey, the entrepreneur behind SylvanSport.
Confused consumers have also e-mailed SylvanSport, asking about its affiliation with the Chinese product.
These problems have left the promising U.S. startup, whose camper trailers retail for about $8,000, in a precarious position. While SylvanSport expects a “break-even” year, with sales around $3 million—more than double 2011′s—business could suffer in coming years if distributors keep fleeing to the Chinese competitor, Dempsey says.
In 2011, SylvanSport received about 15 percent of its sales from outside the U.S. and about half of that from South Korea, Japan, and Australia.
Dempsey expects 30 percent of 2012 sales will be international, according to USA Today.
But because of SylvanSport’s lost sales, “There’s a very real chance that the Chinese company could be the survivor here and we could go out of business,” Dempsey says.
The “shanzai,” or copycat, culture is thriving in China.
The United States has Google and EBay and China has Baidu and AliBaba. This is somewhat reminiscent of Japan in the early 1970s, where they copied and innovated upon electronic gadgets and cars.
Despite all the changes in China, it’s still a Communist country with a Capitalistic business system. However in reality it’s still a very top down managed country, a big brother approach to the culture, and a huge disparity in the rich and poor. Everyone is answerable to the person above him and thinking out of the box is not encouraged.
As a result many take a safe approach towards things, reports SGEntrepreneurs.
In China almost everything is a business decision. When you grow up in a country where life is cheap, things do get brutal and money talks.
Also if you look back in history, it’s no different from the post-war Industrial Age of Japan’s move of taking Western designs and improving on them.
The severe copycat problem in China and other Asian nations exposes foreign companies, big and small, to copyright, patent, and trademark infringement issues, legal experts say.
China is the “factory to the world, so you’re going to have good stuff produced and bad stuff produced,” says Joseph Simone, a partner in the intellectual property practice group at the Baker & McKenzie law firm in Hong Kong.
Wuyi Tiandi Motion’s website shows a camper with what appear to be the same features. But Thomas Tang, a sales manager for Wuyi Tiandi, says the company’s design is its own.
“The Wright brothers invented their plane, and now everyone produces their (own) model of the plane,” says Tang. SylvanSport was first “to make this kind of trailer, and we followed them to make a similar product. I don’t think we copied them.”
Wuyi Tiandi received a patent on its camper in China in November, according to Tang. SylvanSport received various U.S. patents for its product between 2008 and 2010, Dempsey says.
Only 15 percent of small companies that do business overseas realize that U.S. patents and trademarks protect them only within the U.S., according to the U.S. Patent and Trademark Office.
Companies should file patents and trademarks in countries where their products will be made and sold, as well as where they’re based, Simone says.
While Dempsey realizes the limits of U.S. patents, he says that Wuyi Tiandi should not be able to get a patent in China based on his product.
The difference between genius and stupidity is that genius has its limits.