Hongwei Yuan, chairman of Chinese glue-marker MagPow Adhesive Industries [also known as Hunan Magic], has been cheered by Chinese netizens as a hero, while Chinese attorneys who represent Abro Industries, an Indianabased enterprise that has been attempting to sue Magpow for years, were heavily criticized.
The trademark infringement case of the Hunan executive, who skipped bail in London and fled home to China early in January, has been widely discussed in many countries. In China, the public’s anger was first sparked when Yuan was arrested and held in London, prompting more than 10,000 Chinese internet users to sign a petition calling for Yuan’s release.
“I don’t blame them,” said Ji-Qing Liu, partner and chief representative at Baker & Daniels LLP. “Most people do not know the truth, but recently there are more objective news appearing in the public. I must say that China has become stronger as an international player, and people pay more attention to their rights,” he said.
The trademark cases between Abro and MagPow have been going on ever since the first lawsuit started in 2002, and a number of US and European companies are also suing MagPow. Yuan has been indicted on felony charges for violating state trademark laws, theft and forgery. It is alleged that MagPow shipped $22,000 worth of counterfeiting products to one of the cities in Louisiana. Yuan, according to the Louisiana laws, could possibly face five-year imprisonment if found guilty. So far, Abro has won five cases in China and nearly 25 trademark cases against MagPow in many other countries, according to the Financial Times.
IP practitioners both in the mainland and overseas are familiar with this case as news of such have been widely circulated.
“This case is significant because it could be the first case in history that [a] Chinese person could be extradited to the US for trademark infringement,” Liu said. Similar cases are becoming more common in the mainland as infringement is seen as a shortcut way to make illicit profits in a competitive market. “If you create a new brand of your own, it will take years and a lot of money to establish the popularity of the brand. It’s a shortcut if you just use an existing brand to sell your product, whose quality is much lower than those existing brands,” Liu said.
Though Yuan claimed that he created his own brand and thus denied infringing others, Abro’s trademark was established a long time ago with the brand registered in more than 170 countries, Liu said. Magpow’s counterfeit products have caused Abro to lose millions of dollars, he said. “We do not know for sure the exact number, but it wouldn’t be exaggerated to say that tens of millions of dollars have [been] lost.”
After his escape, Yuan wrote an open letter titled “To all my parents and relatives in the country,” in which he said he had fallen into the “Americans’ entrapment” and had almost become their extradition target, while initially his England trip was meant to be for negotiation purposes. However, Yuan was not entrapped, Liu said. “A warrant was issued in 2005 by a legitimate state court of the US, and the US sent two warrants for his arrest to Interpol. [The] same thing would happen to him if he goes to Germany. The reason for his arrest in London, in my view, was just coincidence.”
Nevertheless, Feng Wei, lawyer of Exceedon and Partner in Chongqing has another point of view. “Apparently, Yuan was being trapped,” he said. “It is unethical for the British and Americans to treat Yuan as bait and lure him to England. The parties should go through the legal process of negotiation, but instead of doing that, Yuan was arrested without going through that process.”
Wei said that foreign countries have always targeted China’s IPR issues, and to the locals, this news is merely another tool that the Americans and British have used to put pressure on China’s IPR enforcement. “It’s normal for them [America and Europe] to criticize China, because they are already developed. They thought they have the right and the power to criticize, but you have to understand that things can’t be changed in one day. They can’t demand too much.” Wei said.
China has already been working hard to tackle the problem, but “the western countries [are] never satisfied,” he said.
In fact, Wei said the news has not drawn much of the local people’s attention. “The locals treat this story as some kind of soap news,” he said. In comparison to the case of Wahaha, in which the French government took steps to negotiate with the Chinese government, Wei said “this MagPow case is nothing.”