A lucky break led Bemis Manufacturing Co. to discover that one of its products, a compression molded toilet seat, was being counterfeited in China.
A local Bemis supplier was visiting a manufacturer in China two years ago, and noticed that the company was making Bemis toilet seats, complete with the Bemis name and meticulously copied packaging, and boldly labeled ``Made in the USA.''
They clearly were counterfeit. The Sheboygan Falls, Wis.-based company does not make the products in China, nor had it given anyone permission to do so.
Bemis officials decided to fight. They acknowledged that some might question how much intellectual property is in a toilet seat, but the copycat seat had an inferior surface finish and hinges, according to John Howell, the firm's lawyer.
``If it isn't up to your standards, it could hurt your company,'' he said.
The company hired local lawyers and investigators who paid a visit to the offending firm and, as far as they could tell, convinced it to stop.
Such examples are prompting plastics industry lobbyists to raise the profile of intellectual property violations in the industry. The Society of the Plastics Industry Inc. said it is looking to present information about alleged Chinese violations to U.S. trade negotiators, mirroring pushes from other manufacturing groups.
Washington-based SPI presented four examples in written testimony to Congress last month, and is looking for more. It said it is concerned that traditionally, the government has paid more attention to IP violations in high-profile industries like pharmaceuticals and movies.
``They are hearing about IP violations in a number of areas, but in my opinion they have not heard about specific violations in the plastics area,'' said Karen Bland Toliver, SPI's senior director of international trade and industry statistics.
Although it's hard to come by precise figures, industry officials offer anecdotes ranging from plastic flashlights, medical devices and flame-retardant chemical formulations they say are copied and manufactured illegally in China.
Manufacturers have been making a greater effort to raise the issue in the past year, and are seeing copycat products in areas such as auto parts, consumer products and electronics, said Bill Primosch, senior director of international business policy at the National Association of Manufacturers in Washington.
``For a long time, the software and the movie people - those concerned about copyright - have been the most vocal, but over the last year, manufacturers have, we hope and we believe, made their voices heard,'' he said. ``There's no question China is the biggest counterfeiter in the world.''
It's difficult to estimate the specific impact on manufacturing. The International Anticounterfeiting Coalition in Washington said the U.S. government seized $87 million worth of counterfeit products from China in 2004, a relatively small part of U.S.-China trade.
But IACC said anecdotes suggest a much larger problem than what is intercepted. A counterfeit apparel ring, for example, was estimated to have shipped $400 million worth of goods into the United States annually, although authorities seized only $24 million of products when they disrupted the ring in June, IACC said.
SPI said the four examples it found were two medical devices, a household product and a flashlight. NAM said it has evidence of Chinese companies at trade fairs marketing flame-retardant chemicals that infringe on a U.S. manufacturer's patent.
Both SPI and NAM declined to identify the companies, so it was impossible to verify the claims or look at them in more detail.
Sometimes companies have limited success fighting back. SPI said the flashlight maker was able to get the U.S. government to ban the knockoffs. But it has not been able to stop the products from being counterfeited in China, nor has it stopped them from being sold at a major retailer in Canada, where SPI said there is less IP protection than in the United States.
IACC said Canada and China top its list of countries requiring U.S. attention for IP violations. The group told the U.S. government in February that ``trademark holders have concluded that Canada's efforts to curb international trademark counterfeiting fail to meet the efforts of the Chinese authorities.''
Primosch said China has taken some steps required by its ascension to the World Trade Organization, such as agreeing to beef up enforcement. Some Chinese officials want to strengthen IP laws to protect their own industry, but overall, there has not been enough enforcement, Primosch said.
``In some respects, the Chinese respond quickly to evidence of counterfeiting, but they haven't thrown people in jail and criminalized counterfeiting,'' he said. ``At the local level, they are under tremendous pressure to keep people employed.''
Still, Bemis said U.S. firms should not take the problem sitting down.
``If you see your product being copied out there, go after these people and spend some money,'' Howell said. ``Once they realize you will spend some money, they will close up shop.''
Shortly after the company found the knockoff toilet seats, a Bemis distributor found the same Chinese products at a store in the Caribbean nation of Trinidad and Tobago. There, Bemis filed a lawsuit and the offending store merely removed them from the Bemis packaging and sold them in unlabeled plastic bags, Howell said.
Bemis cannot be sure, Howell said, but the strategy seems to have worked. The firm estimates that as many as 30,000 of the fakes made their way into the market, but Howell said Bemis has not seen any since it cracked down two years ago. There is another Chinese firm that largely copies the Bemis design, but it puts its own name on it, Howell said.