Impudent product piracy at the neighbouring booth
Particularly affected are medium sized companies that have managed to reach and to secure a leading market position by investing in research and development over many, many years. Due to the increasing demand for relays worldwide, manufacturers of switching components are particularly affected by plagiarism, such as for example Gruner AG, the world market leader for polarized latching relays for high currents up to 200A.
This company repeatedly had to experience plagiarists presenting their products at the same exhibitions, only a few booths away. At last year’s electronica, Gruner was able clearly identify the counterfeit products and immediately took legal steps at the show: the company’s lawyer managed to sue out a cease and desist order at court “Landgericht München I”.
Per the study published by Ernst & Young, approximately 72 percent of all counterfeit products are still coming from China. In many cases, they are only spotted at exhibitions – manufacturers suddenly see their own products at foreign exhibition booths.
This is what happened to German manufacturer Gruner at electronica in Munich on November 8, 2016 when it spotted several products at a neighbouring booth that looked quite similar to their own products.
We could remove the plastic cover from one sample and what we saw inside was a 1:1 copy of one of our patent-protected inventions used in all our high current relays.
On the following day, the bailiff of “Landgericht Munich I” searched the booth of NCR Industrial-Clion Relay Co., Ltd and withdrew the respective relay from the market.
A partial success only, as there were another four or five relays that Gruner suspected to be copies as well, due to apparent resemblance – but NCR was allowed to continue exhibiting these relays.
There was no way to convince the bailiff that the products would not be damaged by removing the plastic cover to check the design, but at least the plagiarist’s exhibition booth was blocked for approximately 30 minutes and prospective buyers turned away.
Such incidents are, unfortunately, no exceptional cases: time and again, our customers ask for our assessment for relays that look similar to our products, but are offered by other manufacturers. During the past few years, we have again and again discovered counterfeit products offered on the market. Extremely impudent plagiarists are even using original photos of Gruner relays in their product catalogues.
Barely a week after the Electronica show, Gruner staff met the plagiarists again at an exhibition in Spain. There too, they were showcasing products that looked very similar. We had to accept this, as the versions exhibited in Spain were not protected by patents.
Companies copying our products do not only save money by using low quality material. They also take big advantage by simply skipping many years of research and development work. This practice enables plagiarists to offer copies at dumping prices.
But you can only offer quality products if you are ready to proceed step by step, making improvements and adaptations until you reach perfection, gaining a deep knowledge of all the important aspects of a product. You must also be able to react to changing customer needs that require individual solutions and adaptations.
Plagiarists do not have this knowledge. Some plagiarists do in fact manage to produce samples in acceptable quality, but often, such companies are simply not up to the task for series production, which means field failures in one- to two-digit percent range are to be expected.
For the customer, the purchase of cheap products can have grave consequences: substandard material, wrong parameters and insufficient testing often lead to increased field failures of the relays – the customer misses the original target to save money. On the contrary, even higher costs are to be expected by using counterfeit products, as the relays often lead to problems in the field, due to insufficient reliability. Often, such insufficiencies only show after some time of operation under high duty. Insufficient processing bears the risk of thermal overload. Used in current meters, this can in worst case result in a fire and endanger human lives.
About the author:
Patrick Spreitzer is Vice President of Gruner AG, Business Unit Relays/Solenoids – www.gruner.de