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Intelectual property theft Fabulous fakes - radio mics Sennheiser closing the net Neutrik bust Home

Gary Stanfill

Gary Stanfill is principle consultant for Colmar Systems, based in Southern California. His company has provided engineering and marketing consulting services to wireless microphone manufacturers for several years. Stanfill was president and general manager of Vega, a leading manufacturer of wireless microphone systems, for 18 years. He has over 30 years experience in audio, RF technology, communications and wireless systems. Gary can be reached at gjstanfill@earthlink.net

 

Tackling the issue of product design theft

Imitation is the sincerest form of flattery, it's said. But try telling that to a pro audio manufacturer whose killer new product design has just been ripped off by someone.

This "someone" is a knockoff manufacturer. Someone who didn't spend months or years and hundreds of thousands of dollars inventing the new product. Someone who didn't agonize over achieving just the right mix of performance, features and price. Someone who didn't take any of the risks.

This "someone" is a thief.

Not so long ago, when a manufacturer brought out a product that became popular, competitors would rush to bring out their own versions. However, these companies would attempt to improve upon the original product: to increase performance, add worthwhile features, correct small shortcomings in the original design and offer a better product.

This model has served the audio industry well over the years, although it has not always been kind to the innovators. That’s capitalism - it works, and has consistently resulted in better and more reliable products, major strides forward in audio quality, new ways of doing things, and competitive prices.

And skillful people and companies have made money the old fashioned way: they’ve earned it.

Imitation As Flattery?
Blatant rip-offs of successful products have become a major problem. These are direct copies of products, designed to mimic the original product in almost ever detail, often cleverly packaged and promoted in such a way as to deliberately confuse buyers.

In many cases, the actual design is virtually a direct copy of the original, with a few key corners cut. Of course, these products are always cheaper, a “bargain” that is presented as being "just as good" as the real thing.

Unless you’re a manufacturer, or work for one, why should you care? Aside from the obvious ethical issues, there are many very good reasons.

First, a good many of the products being ripped off are developed by North American companies, and those doing the ripping off are headquartered elsewhere.

These entities don't hire your neighbors to design, build, test or sell their products. In fact, they may cost your friends and neighbors their jobs. They pay little or no taxes to support schools, hospitals, police and fire departments, or repair roads. They don't buy their parts and supplies in your area.

Still not impressed? After all, you get all the "features" of the original product, and at a lower price. Or do you? Features are not performance; they are knobs, buttons, connectors and "stuff.”

And features are not audio quality; in fact, most features are cheaper to implement if you don't worry about how the equipment actually sounds. And features are not reliability, long-term dependability and customer support.

Robbing Peter To Pay Paul?
There is also the question as to where all those savings actually came from. Certainly labor costs are much lower in many parts of the world as compared to North America. But automated manufacturing can make up a good deal of the difference, while transportation costs, tariffs, taxes and various other costs further narrow the gap.

This means that most of the savings must come from somewhere else. Reducing component quality is one of the easiest ways of cutting cost. Wide tolerance, cheap parts cost much less than quality components, but their useful life will likely be far shorter.

And if a “bargain” piece of equipment does fail, can you get it fixed? Warranties tend to be short and once a unit is out of warranty, service might not even be available. Often this means that the equipment has to be tossed.

Engineering is even more expensive. Designing quality products is not easy or simple, and the process is time consuming. Just defining a successful product is often quite difficult and few companies routinely get it right on the first pass.

As a result, somewhere between 8 percent and 20 percent of the cost of a high-tech product goes to pay for engineering. What a huge savings if a company just steals someone else’s design and avoids all those nasty costs!

One of my more interesting experiences while working at a high-end wireless company was to see mistakes and schematic errors faithfully copied by the knockoff artist!

What’s The Real Solution?
Why don't manufacturers take legal action to stop the rip-offs? A few larger companies do. Unfortunately, however, almost all of the knockoff manufacturers are in countries that refuse to protect the intellectual property of other countries. Plus, litigation is expensive.

The real solution to the problem is in the hands of the people who specify and purchase audio equipment. Until they resist buying knockoffs, both because it’s the right thing to do and because it’s in their own self-interest, the problem is likely to continue.  
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Fabulous Fakes - sent in by Falco (2007)

Some counterfeit product and packaging is, at first glance very close. There are a couple of giveaway signs - the colour code ring on the transmitter was the wrong colour, and the buttons on the receiver are also the wrong finish. When you take the basket off the mic, you can see then that it's not a genuine capsule, and as you unscrew it and pull it apart, it becomes increasingly apparent. Same with the receiver. Apart from the buttons (which a punter wouldn't spot anyway), it's when you get inside it that you see the boards are totally different. Again though - a punter wouldn't know that! Although they are far better than some copies I've seen recently! Most, most annoying.

Some greedy punters just can't get their heads around the adage that if an offer seems too good to be true, then it almost certainly is too good to be true. put a buyer's guide up on ebay some months ago to this affect, but unfortunately some people's greed for a "bargain" gets the better of them. Learn more at: http://reviews.ebay.co.uk/Beware-Fake-Radio-Microphones_W0QQugidZ10000000003659906     top


Sennheiser Winning the Battle Against Counterfeiting (2009)

The problem of counterfeit consumer electronics and MI goods is not going to disappear overnight, but Sennheiser UK is committed to supporting its dealers and end users by doing everything in its power to combat the steady trickle of counterfeit Sennheiser goods coming into the UK from China and Hong Kong.
 
The good news is that in the battle against counterfeiters selling inferior, unauthorised products illegally bearing the Company's logo, Sennheiser is winning. Debbie Tyler, Sennheiser UK's Director of HR, is leading the fight against the counterfeiters.

"We have developed an excellent working relationship with HM Revenue and Customs," explains Tyler. "Every time they seize a shipment of counterfeit products ­ which is on a regular basis now ­ they send us samples of the goods for us to examine. Some counterfeits are obvious to spot, as they'll contain Chinese lettering or an incorrect logo. Although the more accurate counterfeits look near to perfect. The difference is the makers have used inferior plastics and components. In some cases it's necessary for our Engineering department to confirm that they are counterfeit products.
"Once Sennheiser UK declares that they are fake HM Customs destroys the shipment, at Sennheiser's cost. Sennheiser is passed the details of the person or company that sent the shipment, and its intended destination and then takes legal action through Sennheiser's Parent Company. There are ongoing cases right now.
 
"We're also working very closely with the Trading Standards Authority nationwide. If a consumer gets in touch with them, believing they've been sold substandard goods bearing the Sennheiser name, we're able to confirm immediately that the products are counterfeit, enabling Trading Standards to take legal action against the retailer."

The problem for authorised dealers is that some consumers are choosing to make their purchases on-line for what they believe are bargains at better-than-store prices. The problem for those consumers is that they've purchased inferior products. Sennheiser receives calls on a daily basis from customers wondering why the microphones and headphones sound poor or have fallen apart; the unwelcome answer is that their goods haven't been made by Sennheiser at all.
 
The Internet is the major retail point for virtually all counterfeit Sennheiser products many have been found on eBay, and the Internet is where Sennheiser UK is focussing its efforts at these unwelcome points of sale.
 
Sennheiser UK do not knowingly sell direct to dealers who sell on eBay or similar auction sites. If any Sennheiser product is advertised as new and is heavily discounted, it is unlikely to be genuine. For customers to be sure they're buying a genuine product Sennheiser strongly recommends buying from an authorised Sennheiser retailer. A list of these retailers is available at www.sennheiser.co.uk
 
"If you type the word Sennheiser into the popular auction sites you automatically receive a warning that the company and its dealers do not sell products on auction sites and what you'd be purchasing could very well be a counterfeit product," continues Tyler. "On top of that, Sennheiser UK is continually shutting down unauthorised dealers selling on eBay through a programme called VeRO. We investigate all UK based vendors selling so-called Sennheiser products and send them a message that states that Sennheiser owns the intellectual rights. That message goes to the vendor and eBay, who are forced to remove the product in a matter of hours. We are re mo ving i lleg al pages on a daily basis. One morning recently we shut down 400 pages. eBay are being very supportive. Having paid 40 million Euros to Louis Vuitton after a court case about counterfeit goods, they¹re very concerned about the problem."
 
This ongoing fight against illegal traders is beginning to get results. Dealers and end users are now sending suspicious eBay links to Sennheiser UK and the number of links for Sennheiser products on eBay is coming down noticeably.
 
"We're working with Amazon and Amazon marketplace too," adds Tyler. "If you type Sennheiser into Amazon you get a warning about fake products, although it has been less of a problem there than on eBay."
 
The battle is not being fought in Britain alone. Sennheiser UK's parent company in Germany is attacking the problem at source ­ and is investigating various facilities under suspicion of manufacturing counterfeit products in China. It's a slow process.
 
"The most important thing," concludes Tyler, "is that people are starting to understand that there are a lot of counterfeit electronic goods out in the market. Our message is to always buy Sennheiser products from an authorised dealer. And essentially, if you see a deal that appears to be too good to be true, that's because it isn't. We think this message is beginning to filter through."

For more information about Sennheiser please visit www.sennheiser.co.uk     
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12.02.2009 - Sennheiser Germany


China: Large amounts of product copies seized by Neutrik  (2009-03-09)
Counterfeit bust in Razzia, China Thanks to tireless efforts Ningbo Neutrik succeeded in taking legal actions against shops which sell Neutrik product copies. In close cooperation with the authorities in Guangzhou a razzia in the Guangzhou Component Distribution Center took place on 2nd March 2009. This concerted action was accompanied by the quality manager of Ningbo Neutrik Electronics Co. Ltd. who clearly identified the confiscated product copies on site. In total more than 100,000 connector copies were seized and destroyed.

In fact, the success of this measure exceeded the expectations of Neutrik considerably so that Neutrik feels confirmed in its intention to continue in suing product copiers in a calculated and adamant way and to strike back at them with all means and instruments that are available for this purpose. See more at www.neutrik.com     top

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