Waikato Times

Court win in China ‘worth it’

- TOM PULLAR-STRECKER

When BFM Fittings chief executive Blair McPheat decided to legal action against two businesses in China that were knocking-off his company’s patented industrial pipe couplings, many people told the Auckland businessma­n he was wasting his time.

But 18 months after deciding to protect the company’s patents, he has no regrets.

A Chinese court ordered two defendants, one in Guangzhou and the other in Suzhou, to sign personal undertakin­gs that mean they could be subject to prison terms if they reoffend.

The counterfei­ters were ordered to pay damages, and their tools, moulds, raw materials and finished products were destroyed.

BFM employs 30 staff and the result disproves the common assumption that it is impossible for smaller businesses to defend intellectu­al property rights in China.

‘‘A lot of people said ‘don’t be stupid McPheat’. A lot of people said we’d be wasting our time, but we know we have very good patents and we thought ‘stuff it’ there is a serious principle at stake here.’’

The company’s couplings are designed to be fitted by hand, without tools, but to still provide a complete seal.

‘‘We have got a fair bit of intellectu­al property. It looks like a simple product, but it is difficult to make.’’

AJ Park lawyer John Hackett estimated about 70 per cent of the world’s counterfei­t goods originated from China, but said it was getting easier for businesses to defend their intellectu­al property.

‘‘Initially, China just paid lip service to intellectu­al property rights.

‘‘Certainly their laws have tightened up. We are seeing courts – particular­ly in the likes of Beijing, Shanghai and Guangzhou – giving good decisions.’’

McPheat’s advice to businesses that find themselves in the same boat is to listen to local partners and find a good, local legal representa­tive.

BFM used law firm Wan Hui Da on a recommenda­tion. ‘‘Your representa­tion has got to be local, and it has got to be good.

‘‘Once we got on to them it was quite quick. We went to the hearing and it was all over in three or four hours.

‘‘We certainly had to do a fair bit of documentat­ion to make sure it was all clear. You have to make sure your I’s are dotted and your T’s are crossed, that’s for sure.’’

The counterfei­ters were not costing BFM a lot of business as their knock-offs were of poor quality and were generating complaints from customers, and the legal action was expensive – McPheat doesn’t want to say how expensive – but he said it had been worthwhile.

‘‘Now that we have set a worldwide precedent we are away. It shows we can win anywhere. If it happens again we have got something we can smack them over the head with.’’

Hackett said customs officers in New Zealand were doing a good job intercepti­ng counterfei­t goods coming here. ‘‘They are probably only get about 30 per cent.’’

But the same could be said for illegal drugs, he said.

 ?? PHOTOS: SUPPLIED ?? BFM’s pipe coupling systems are sold in 35 countries. Chief executive Blair McPheat, inset, has no regrets about taking action over counterfei­ting.
PHOTOS: SUPPLIED BFM’s pipe coupling systems are sold in 35 countries. Chief executive Blair McPheat, inset, has no regrets about taking action over counterfei­ting.

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