By Karen R. Smith
American and European companies in the water industry have been reporting that foreign manufacturers are ripping off their products, patents and technologies for quite some time; in fact, as the number of firms being victimized has risen, so has the search for effective solutions.
A patent defined
US patents, trademarks, copyrights and service marks are all very specific instruments. The US government defines a patent as the grant of a property right to the inventor, issued by the US Patent and Trademark Office (USPTO), effective only within the US, its territories and possessions. The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the US, or “importing” the invention into the United States. Critical to understand is that what is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing (the invention). Once a patent is issued, the patentee must enforce the patent without aid of the USPTO.
Infringement
Infringement of a patent consists of the unauthorized making, using, offering for sale, or selling any patented invention within the US or US territories, or importing into the US of any patented invention during the term of the patent.
Treaties and foreign patents
The rights granted by a US patent extend only throughout the territory of the US; companies and inventors seeking patent protection in other countries must apply for them separately, either individually (country by country) or in regional patent offices.
The laws of many countries differ in various respects from US patent law. For example, in most foreign countries, publication of the invention before the date of the application will bar the right to a patent. In most foreign countries maintenance fees are required to keep a patent current. Many require that the patented invention must be manufactured in that country after a certain period, usually three years; if there is no manufacture within this period, the patent may become void in some countries, although in most countries, the patent may be subject to the grant of compulsory licenses to any person who may apply for a license.
The Paris Convention for the Protection of Industrial Property is adhered to by 168 countries including the US. A major tenet of this convention provides that each country guarantees to the citizens of the other countries the same rights in patent and trademark matters that it gives to its own citizens. It also provides for the right of priority in the case of patents (and trademarks and industrial designs).
The Patent Cooperation Treaty came into effect on January 24, 1978 and is adhered to by over 124 countries, including the US. The treaty facilitates the filing of applications for patent on the same invention in member countries by providing, among other things, for centralized filing procedures and a standardized application format. Timely filing of an international application affords applicants an international filing date in each country which is designated in the international application and provides (1) a search of the invention and (2) a later time period within which the national applications for patent must be filed. A number of patent attorneys specialize in obtaining patents in foreign countries.
Be aware that under US law, it is necessary (in the case of inventions made in the US) to obtain a license from the USPTO Director before applying for a patent in a foreign country.
Trademarks and servicemark
A trademark is, “ a word, name, symbol, or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others.” A servicemark identifies and distinguishes the source of a service rather than a product. Trademarks which are used in interstate or foreign commerce may be registered with the USPTO. As with patents, trademarks and servicemarks must be enforced without the aid of the USPTO.
Water treatment industry victims
As water treatment has received more attention and enjoyed broader markets, such products became increasingly attractive for pirates. American and European companies are the prime victims of this piracy and many believe that third world criminals gain direct and unfettered access through a unique avenue: trade shows.
Since most water treatment industry shows presume the integrity and legality of attendees, many today believe the shows themselves have become unwitting abettors to the problem. “Unscrupulous rip off artists – truly industrial spies – may come strolling by for an up-close and personal demonstration of our products, as well as access to our literature. While the majority of visitors are potential customers, it’s difficult to discern who the potential counterfeiters may be, “ explained Rob Samborn, Director of Sales & Marketing for HM Digital, Inc.
After experiencing this at a number of trade shows, Samborn began his odyssey for justice.
HM Digital is based in Los Angeles; they routinely file for multiple patents in different countries and maintain counsel worldwide. When the phony products began appearing in the marketplace, HM Digital contacted intellectual property lawyers in China, as well as in the U.S.. In China the IP attorneys advised that although HM Digital holds five patents in that country, there was little chance of prevailing in a courtroom there. None of the lawyers would take the case.
Samborn reported the offending Chinese firm, Kelilong, to the US Departments of Commerce and State; the EU counterparts and to the World Trade Organization. While all were sympathetic, none could (or would) help. “That’s when I decided to reach out to other instrument companies. I discovered that Kelilong had stolen their products, too.”
Five other companies had been victimized in the same way by the same firm. As Kelilong grew, so did their audacity. They began contacting distributors in the US and Europe, claiming they were the original manufacturers of the products they had pirated. “They even sent us an email asking us to represent their products here, “ Samborn said.
Samborn sent affected manufacturers a letter suggesting they work together to combat the problem. “A number of companies…have recently sprung up who seemingly seek to profit only from copying legitimate companies,” his letter read in part.
This proposed alliance includes American and European manufacturers and even one from New Zealand. Samborn has suggested a zero-tolerance stance, hoping that trade show organizers will maintain and enforce blacklists and that the media will from time to time notify readers of offenders so they will not unwittingly buy ‘knock offs’ from such criminals. Samborn has not stopped with instrumentation manufacturers. He is also contacting a broad range of manufacturers throughout the water industry and encourages anybody interested in joining the alliance to contact him.
WC&P contacted NSF, the RAI and WQA to learn how each organization is combating this problem.
NSF
The issue for this certification and testing organization is servicemark infringement. For the NSF Mark to retain its meaning and value, it must not be used illegitimately. As globalization has provided increased opportunities for the theft of intellectual property, NSF has taken a proactive role to protect their brand.
According to Rick Andrew, Operations Manager of the NSF Drinking Water Treatment Units Program and regular WC&P contributor, the organization has a full-time enforcement staff. “We walk the floor of shows we attend and those we exhibit at, reviewing the use of the NSF Mark, “ he explained, noting that they rely on up-to-date NSF listings information to confirm proper use and display of the mark.
While the focus is on trade show exhibitors, NSF is vigilant about other abuses. “Occasionally, product literature will come to our attention and we take action against those who are improperly using the NSF Mark there as well, “Andrew explained.
The organization acts on all complaints received and maintains a list of companies that misuse the NSF Mark on their website at http://www.nsf.org/regulatory/newsroom/cea.asp. Such companies have the option of going through the certification process and legitimately obtaining certification, Andrew said. Until such time that they have met all the requirements (for certification), NSF prohibits them from using the mark in conjunction with their products.
“We use various techniques to obtain compliance, which include letters, postings to our website and, in some cases, legal action, “ Andrew said, noting that at present, NSF does not have a formal program to share this type of data with any other certifiers.
RAI
Amsterdam RAI are the organizers of the Aquatech portfolio of trade exhibitions of process, drinking and waste water technology. The next editions of Aquatech are
WQA Aquatech USA 2008, March 2008, Las Vegas USA (WQA and the RAI partner for this annual tradeshow and conference); Aquatech Amsterdam 2008, 30 September – 03 October 2008, Amsterdam, the Netherlands and Aquaterra, World Forum on Delta & Coastal Development, 10-12 February 2009, Amsterdam, the Netherlands.
Earlier this year, the RAI acquired the Chinese Water and Membrane Show, China’s leading event in the membrane technology sector. This has been merged into Aquatech China, creating the largest water event in that country to date. This new combined show, Aquatech China, takes place from May 21 – 23, 2008 in the Shanghaimart Exhibition center in Shanghai.
Paddy Young of the RAI explained that when a company signs up to exhibit at this event, they must sign a contract stating that they own the intellectual property rights (or that the company who’s products they will be presenting does).
Back at HM Digital, Rob Samborn wanted to exhibit at Aquatech China, but was very concerned about counterfeiters being allowed to exhibit or attend. “I contacted the RAI and explained our plight. Before committing thousands of dollars, I wanted assurance from them that known counterfeiters would not be allowed to exhibit nor attend the show.”
HM Digital had to demonstrate that their designs and technology had been stolen. This was easy, given Kelilong’s website advertising the fakes. Samborn provided the RAI with a file of a side-by-side comparison of the original manufacturer’s products and the Kelilong’s knockoffs.
After reviewing the materials provided, the RAI promised to do their best to deny Kelilong access to Aquatech China, effectively blacklisting them. Young notes that since the launch of Aquatech China, this is the only case of proven IP piracy. HM Digital felt satisfied with the outcome and appreciative of the RAI’s efforts. “We feel we have taken a responsible approach to the issue,” Young summed up.
WQA
It remains to be seen what policies and practices the Water Quality Association will put in place to combat piracy; they have declined to comment on the subject at this time. While their partnership with the RAI makes the situation promising, the fact that WQA handles most of the arrangements for exhibitors and attendees seems to indicate they may create their own techniques for dealing with the issue – or ignoring it.
To date, those visiting WQA events who have seen pirated products on display have met with little more than a shrug and a polite explanation that paying exhibitors and guests cannot be harassed at the show. All look forward to a more proactive stance by this respected organization.
Broader issues
Piracy and patent infringement is not limited to any one section of the water treatment industry – entire devices (softeners and R Os), individual components (cartridges and resin) and everything else are being plagiarized, then sold to unwitting customers – while the rightful patent holders lose billions worldwide.
Government help
As NSF’s Rick Andrew noted, help is available from the US Commercial Service. Eric Nielsen, Director, Arizona US Export Assistance Centers, explained the agency’s entire goal is to help US manufacturers. As patent infringement and the theft of intellectual property has become rampant, the US embassies in China and India will now have dedicated personnel on staff to help those struggling with the problem. Regular business seminars and a host of programs can aid manufacturers on a host of levels. One recent program in Arizona, “China Domain Name Strategies for US Exporters” dealt with everything from how to get a domain name presence to what those annoying emails from Asia-based consultants offering to register a domain name are all about. A workshop called “Protecting Your Company’s Intellectual Property in the Global Economy” draws a regular crowd and includes effective strategies for protection along with tips on dealing with infringers.
For complete information, visit the agency’s website, www.export.gov/cs.
http://www.uspto.gov/web/offices/pac/doc/general/index.html#ptsc
Water Matters, WC&P, May 2007, Trademark Protection: A Case Study by Rick Andrew