For years, there’s been a buzz around the Specialty Equipment Manufacturer’s Association (SEMA) show in Las Vegas that offshore companies were reverse-engineering knockoff products and then displaying them with impunity at SEMA and at the nearby Automotive Aftermarket Products Expo (AAPEX). On Wednesday, eight companies had their booths shuttered and their inventory raided by Federal Marshals at those two shows, accused of multiple copyright and trademark violations.
The accusations stemmed from a complaint from Omix-ADA, which is the world’s largest independent producer of aftermarket accessories for Jeep vehicles, alleging that the companies were counterfeiting numerous Omix-ADA products, including bumpers and the company’s popular Spartan Grille.
The aftermarket industry is rife with patent and intellectual property issues. On the surface, these products may look the same, but legitimate companies that produce superior products subject them to rigorous testing to meet safety requirements. Producers of counterfeit products may not just be delivering an inferior product, but one that can be dangerous in a crash.
Omix-ADA had prior knowledge that these companies would be displaying products that were blatant knock-offs of its products before the show. “This is something we were aware of and we talked with SEMA about how do we go through the steps because we don’t want to upset the industry at an event like this,” said Henk Van Dongen, Omix-ADA’s Director of Marketing. “So they recommended a few local attorneys and we got all of our paperwork in place by Monday night, then Tuesday we went to the judge.”
District Judge Gloria Navarro issued a preliminary injunction and seizure order Tuesday. According to Automotive News, the companies were identified as Changzhou Jiulong Auto Lamps Factory, Guangzhou Vcan Electronic Technology Co., Maxgrand Ltd., Sanmak Lighting Co., Shenzen Unisun Technology Co., and Unity 4wd Accessories Co. Judge Navarro scheduled a preliminary hearing for Nov. 10.
“Normally they have a hearing and those companies would be served and then have to show up for another hearing – and if they don’t show up then we win, but the judge took one look at the paperwork and said there is no denying this.”
US Marshals raided the companies simultaneously, preventing them from interacting with attendees and boxing up evidence including product, as well as all electronic devices and paperwork.
”Everything gets copied and looked at, and then the companies get them back and we can pursue additional legal action if we want to,” Van Dongen said. “SEMA has always said that if something like this happens, then the companies found to be on the wrong side – so to speak – are no longer allowed to come back to the SEMA show.”
”This is obviously about our product line and intellectual property because we need to protect our customers and retailers. But it’s not just about Omix and Rugged Ridge, it’s something that is industry-wide and something that has been building up and becoming more and more rampant over the past two to three years.”
Jeep accessory manufacturer TeraFlex had the same issue. It engineered its spare tire mount to solve a specific issue with the standard Jeep spare tire mount, and then subjected its design to the rigors of Chrysler’s own product test facility, where it underwent a 14,000-cycle slam test, 100,000 cycles of load testing, and 1,000-hour salt spray test. Nevertheless, competitors knocked off the product with abandon, to the point that TeraFlex made a hilarious video about it:
You only have to visit Amazon or eBay to see the profligate availability of counterfeit products knocked off from legitimate companies, but neither Amazon nor eBay seem all that interested in shutting the practice down. “The way the market is these days – a company can be anywhere in the world and produce counterfeit products that are hard to catch in customs,” Van Dongen said. “These individual pieces, there is no way to intercept them and it’s a major problem, so that’s what really started this.”
”Look, if someone else wants to go out and make grab handles, then make grab handles, but when companies spend all kinds of engineering time, and time to create patents and design patents, well then absolutely stay away from that. We all spend a lot of time and effort into building the companies we have, and competition is fair and if it’s done fairly then let the best company win.”
Van Dongen said Omix-ADA plans to take legal action as far as they can against these eight companies.
“We’ll have to see how far we can legally pursue the companies that we dealt with today and we’re going to be vigilant going forward,” he said. “It’s slow going, we’re just getting started with this but you can see we are focused on it.”
”It’s a little like playing whack a mole, and hopefully if we whack them one time too many, then they won’t be coming back.”