As part of the Valve Manufacturers Association’s ongoing efforts to help manufacturers defend against IP Theft, and to protect end users and the public against dangerous products, Valve Magazine is presenting a two-part Web feature covering the far-ranging effects of counterfeit products. Here in Part One, we present a general overview and the opportunity to catch up on information previously published online and in Valve Magazine.
In Part Two, to be published in a May Web Feature, we will be talking with valve manufacturers, distributors and end users to ask them about the current state of affairs in this industry. What steps are being taken by your manufacturing company to protect against counterfeits? What would you like to see being done by government agencies? End users and procurement officers: What safeguards are you taking? How has technology helped you defend your IP rights? What experiences have you had dealing with counterfeiters?
Safety at Stake
When most people think of intellectual property theft, they think of movies and music and designer purses and watches. It’s likely that many readers of this article have either knowingly or unwittingly purchased a fake purse or watch or perhaps even a pirated DVD. While IP theft of this type most certainly affects the economic well-being of rights holders through brand dilution and lost profits, generally speaking, the fact that somebody illegally ripped a compact disc is not a life-threatening matter.
But when the intellectual property being illegally copied is a valve or an actuator or a gasket, inferior duplicates can have life-threatening consequences. While it’s relatively easy to copy the appearance of a valve from a well-respected domestic manufacturer, the engineering is not so easily duplicated, and the stringent controls on the tolerances and quality of casting or forging will not be in place.
What is being done to protect public safety and manufacturers’ intellectual property rights? How do the governments of the U.S. and Canada deal with the countries that seem to do very little to enforce patent laws and intellectual property rights within their own borders? What responsibility does private industry have, and what is being done to date in the private sector?
According to the November 2011 U.S. government report, Intellectual Property Rights Violations: A Report on Threats to United States Interests at Home and Abroad, “Most physical infringing goods are produced overseas and cross United States borders to reach consumers in the United States. Offenders in many countries pose a threat, but China-based offenders are the dominant threat and dwarf all other international threats.”
While there have been some successful, highly publicized cases won against counterfeiters, generally speaking, clever operators are increasingly finding ways to exploit supply chain vulnerabilities or develop alternative supply chains to evade the standards meant to ensure supply chain integrity.
Theft of trade secrets from United States companies is most often committed within the United States by United States actors, but they are often selling to Chinese buyers.
In early March 2012, the Justice Department filed charges against four individuals and a Chinese government owned company, Pangang Group, for theft of trade secrets of DuPont Company.
In June 2011, employees at two Chinese companies were given criminal sentences for making and selling counterfeit Hopkinsons Valves, which are manufactured by the Weir Group Plc.
The managers of the companies, Shanghai Saimeng Mechatronic Engineering Co. Ltd and Yangzhou Yikai Machinery and Engineering Co. Ltd, were given fines and 15- and 16-year custodial sentences. The counterfeit Hopkinsons-branded valves were installed in Chinese power stations and malfunctioned, resulting in serious injuries and damage because they were defective.
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