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Column: Protect small business from the threat of China

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By Bob Confer

China is neither a fair nor free trade partner as they – government and businesses alike – have little to no respect for intellectual property rights. They think nothing of copycatting patented products and software and stealing trade secrets. It’s estimated that such IP theft costs the US economy around $500 billion annually.

Confer Plastics faces Chinese rip-offs on a regular basis. There are quite a few pool and spa products out there which copy all but the patented part of our goods, adopting our look and means of assembly while shamelessly adopting our manuals and packaging. Then, there are some Chinese-made products that take it to another level and are full-blown counterfeits, utilizing our patents.

The latter items get the full force of our legal counsel when they are sold in US marketing chains, typically bringing them to quick demise, even at the e-commerce giants. We faced two such instances last year — the throes of the pandemic didn’t temper China’s bad behaviors.

It’s not cheap for us. Fighting those ersatz Confer products and maintaining appropriate IP protections costs us tens of thousands of dollars a year. But, we can handle it because our product line is big enough and it’s worth it — the products we are saving are well-established and have decent sales (which is why Chinese manufacturers and the US distributors that enable them have their sights on those lines). 

We can fight that fight, but, what about the little guys, who don’t yet have the business volume or are just starting out? They can’t afford the legal bills for such battles (let alone for the development of patents), so they just throw in the towel with those products, watching with frustration as Chinese takeoffs takeoff in the marketplace.

They need some help from Uncle Sam.  

They get some now, from the Federal Bureau of Investigations and other agencies, when espionage and clandestine theft takes place as that escalates to a special level of criminality, something akin to spying.

But, they get little help with the run-of-the-mill IP theft, such as that my company faces on a daily basis.

A suggestion would be that for the smallest of the small businesses — say annual revenues less than $2.5 million — the federal government creates a system that protects those firms and their ideas.

The government could either reimburse small businesses for their costs associated with — or create a department that helps such enterprises with – development of programs, policies, and procedures to create and appropriately protect patents and trademarks within and without the organizations. By covering the costs of patents at these businesses, the government would ensure that big ideas can come out of the smallest of places.

Then, those same organizations could be afforded legal assistance, by said department or reimbursement, when fights against Chinese rip-offs take place through the provision of cease-and-desist letters or deeper legal counsel if it escalates into greater drama in the courts or some other venue. A sudden wave of legal action from players previously not deemed as such threats would really make China and their enablers reconsider their unethical practices.

For someone often called a being libertarian or conservative, it’s probably a shocker to some readers that I’d push for either a new agency or grants for legal services.

I look at it this way: Federal and state governments don’t mind throwing billions of dollars in grants, tax credits, and more — for everything under the sun — at large, well-established corporations (Amazon, Tesla, green energy companies, oil companies, banks, etc.) that really aren’t worthy of public largesse because they have economy of scale, financial reserves, established markets, and defined futures. But, providing know-how and weapons, if you will, to small guys who are in a literal economic war with China is a small and worthwhile expenditure…and there is an actual return on investment.       

There could be a machine shop in your town, a start-up in your neighborhood, that would benefit from such assistance, as we all will. Considering that small businesses are the bread-and-butter of the US economy, can become big enterprises upon capitalizing on their big ideas, and could literally develop and manufacture life-changing and life-saving products and software, they need and deserve help against China that they can ill afford as they are starting-up and growing. The health of their businesses and communities – and the health of our national economy and national security – depend on winning those fights.

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