The U.S. International Trade Commission says that U.S. firms lost at least $48 billion in a single year thanks to Chinese companies stealing their intellectual property designs. U.S. smartphone case manufacturer, OtterBox, has had enough and doesn't want to take it anymore.
OtterBox has built a $50 million business designing hard case covers for smartphones, e-readers and tablets and now it wants to stop the entire Chinese knock-off industry from stealing and selling its designs. The Fort Collins, Colo.-based company filed a complaint with the U.S. International Trade Commission last week that names a slew of Chinese manufacturers as the culprits. It also called on the carpet more than a few U.S. outlets that sell cases imported from China including companies in Georgia, New York, Tennessee, and one in its own small home town, TheCaseSpace of Fort Collins.
OtterBox is particularly wanting to stop the overseas cheap knock offs of its popular Defender Series and Commuter Series cases. The Defender series, for instance, features hard, colorful shells of silicon and plastic and costs about $50 for the smartphone cases ($90 for iPad case). In contrast, TheCaseSpace sells a similar-looking shell for the iPhone called The Vault Case priced at about $40.
Pink imposter? The OtterBox Defender (left) vs. the Vault (right).
To OtterBox, cases like the Vault should be declared contraband and stopped at the border like a bag of cocaine.
"OtterBox has requested the ITC to issue orders to generally exclude all infringing products from entry into the United States as well as prohibit advertising, distribution and sale of these products within the United States. Orders will be administered by U.S. Customs and Border Protection at all United States ports of entry," the company said.
We aren't hopeful that OtterBox will get its wish, as it seems the USITC is fond of five-year investigations -- and business fortunes in the high-tech industry are won and loss and few times over in that time span. But the commission is starting to look more seriously at China. Its report, published about two weeks ago, was compiled from a survey of 5,000 U.S. firms conducted in 2009. In addition to putting a $48 billion price tag on the annual cost of losing business to China, it found that firms spent another $4.8 billion in 2009 to try and combat Chinese IP infringement. And these are conservative estimates because the 5,000 surveys were sent only to companies in industries heavily targeted by Chinese IP theft.
Perhaps the harshest statistic from the USITC report is that, if China's knock-off culprits were stopped, 923,000 U.S. jobs would be created by the 5,000 companies surveyed alone.
Using statistical modeling, the commission then determined that if China were to implement intellectual property right protections on par with the U.S.'s, billions of dollars would be earned and millions of jobs would be created. The report concluded that such a change would result in, "(1) a $21.4 billion increase in U.S. exports of goods and services, (2) a $87.8 billion increase in sales to U.S. majority-owned affiliates in China, (3) a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment."
It is about time someone tries to go after all these knockoffs. My father works for a manufacturing company that designs and sells lightbars for emergency vehicles and within weeks of them coming out with a new product China has produced a knockoff. The knock offs are so good looking with their logo even on the side of the product that they have received them several times for warranty repair. As soon as they open them up they can tell by the cheap components used that it is not their product.
Maybe if we stopped having them manufacture so many of our products it would not be as easy for them to counterfeit them. Of course we can't stop selling products to them since they own so much of the U.S. Debt.
Thanks Julie! I'm aware of the counterfeiting problems posed by Chinese companies, but I did not know the potential loss in dollars was that staggering. Love the source links! Excellent job!
Of course, we mustn't forget that such a market exists partly because we, as consumers, demand these bargain based goods. This problem is akin to the U.S. drug wars of the 1980s and 1990. The supply of cocaine, heroin, and other narcotics from countries outside of the U.S. was fueled by the demand for such drugs by American citizens.
Never stop learning... until you're dead.
Jack of all trades, master of none.
I don't think most of us can understand this type of market culture. For us it's just a rip-off, but for some 10 year old chinese kid it probably means eating that day, and for the manufacturer it means doing what the government forces them to do, and for the government it means good profit disregarding any type concern towards human life.
Or maybe I'm saying that because I don't understand.
I asked for the best case when I bought my Captivate and I was directed to look at the Otter Box line and ended up purchasing the Commuter.
I have to say it has served me well.
As far as China, imitation is the best form of flattery......unless it's costing you Billions.
Otterbox should get off their high horse. They already charge RIDICULOUS amounts for their cases. As a consumer I welcome cheap knockoffs especially if they get they get the job done just as good. Also banning Chinese Otterbox 'knockoffs' should, in principle, mean that all Chinese imports should be banned.
It's interesting to see how this plays out but other companies besides Chinese can create knockoffs; did anybody forget about Korea?
Most of these chinese/korean knockoffs have already taken a place in this US market; you can walk into any flea market and find yourself walking off with a cheap knockoff. Can't blame them though, we wan't to have the most expensive stuff at way cheaper prices and sometimes we settle for a cheap knockoff rather then a real thing.
Besides, I don't think this goes any deeper then "this is cutting into our hard earned profits" issue, it's not like these things are duds and anything...
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What? they look totally different, WTH they going on about? LOL j/k
But ya, china is probably the biggest thing causing the US economy to be so low :(.
Tank0okee, knockoffs are shuned no matter if the original is over priced :(
It's called "Business". The more you have, more you have to lose. Don't hate the player, hate the game.
This is business? No business is taking my idea and making it better and marketing it better and winning my customers by providing a better product or service. This is just theft and it is what the Federal government should be protecting U.S. businesses from with import restrictions and so on.
If you just take my idea and reproduce it at a lower cost with cheaper materials using what is tanamount to slave labor you are not competing in an open market. Of course we, the consumers, have the ultimate say on how successful these pirates are by voting with our dollars. If we didn't fall all over ourselves to buy those cheap knockoffs they would stop making them.
The numbers presented here are interesting. Although I definitely appreciate a bargain, I don't think it's right for companies to steal ideas and profit from doing so. Stopping them is another story, however.
@EHarler We are not worlds police. Lead by example. Let other countries deal with their problems, we have enough issues in the US.
Not all items we buy that are produced in China are copywritten. So no not all Chinese goods needs to be banned. This is just stupid. Yes you are paying more but that money is staying within our country. Plus you are also paying for the future development and the creative people that will design the next generation of products. Of course you can make it cheaper if you simply copy what someone else has developed.
Should go after where these things are sold... Ebay? Amazon... Etc
"This is business? No business is taking my idea and making it better and marketing it better and winning my customers by providing a better product or service..."
Ahah, you're talking about Ideal business, creative business, innovative business.
All part of the game, well as the darker side: thievery, replication, stale industry. Either method gets you ahead.
Absurd ! Is the shape or the colour that OtterBox is claiming proprietary rights to ? Form and colour are both part of our intellectual commons - to say that a certain company has an exclusive right to such elements is no more than an unconscionable land grab. If OtterBox wants to sell more hard-case covers, then perhaps they should look to the quality of their products and their pricing, compared to competitors. They should not be allowed monopoly rights to our commons - even if they are based in the USA ! The only thing that lawsuits of this type further is lawyers' incomes....
You are right of course you can make it cheaper if you don't have to do any R&D. You are also right that all Chinese goods do not need to be banned. But the money does not stay in the country a big part of it goes to the manufacturers in China when they are imported only the markup stays in the country. Where Otterbox is produced and sold in the U.S. and yes they are overpriced but are also a damn good product. Keep in mind they are not the only ones who are having their products stolen and reproduced cheaper and then imported in the U.S. the problem just keeps getting bigger and bigger to the point of why innovate when I can just steal someone's intellectual property.
Been saying it all along, But Y'all just kept calling me crazy!
All you lefties just kept saying that stupid Repub :P
Well for the last time I am definitely not a Repub! I am just an American! It is bad enough when we create product (either intellectual or tangible) and have our own gvmnt take 65% of the profit, too where the companies have to go overseas. but then to have other countries make a complete black market economy out of it is a whole nother story.
China even proves this hypocrisy by the claims against Kung Fu Panda! That is what has prompted them to start up a multi-Billion dollar govmnt run animation studio to generate competing 3D animations against Hollywood! The really funny thing is that they don't have any of their own creativity, You just cant in that form of oppressive society that they have.
Just look at their first attempt/answer to KFP "Legend of A Rabbit"
Notice any similarities?
Or maybe you would like your kids to read "Harry Potter and the Chinese Porcelain Doll"
>> Maybe if we stopped having them manufacture so many of our products it would not be as easy for them to counterfeit them.
Absolutely! I remember reading about Cisco switch/router knock-offs a few years back. They were perfect reproductions... because they came from the same factory. The only thing about them that wasn't genuine was the serial numbers.
What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?
For the company my father works for Whelen engineering they manufacture everything they possibly can in the U.S. and as soon as the products are released someone in China buys them. Strips them down and makes molds of the plastic parts. Then builds the products with inferior electronic components but unfortunately they are still branded perfectly with the logo built into the plastic.
Thats really a true business and even i too bought some Otterbox Cases for my iPhone. Luckily i got
30% Off as well as free shipping from SF Planet's Online store. If anybody wanna buy Otterbox, then use the coupon code OTT30OFF in their web to avail it!
Well first of all if u idiots didnt go and buy all the Chinese *** over at walmart and other cheap ass stores this wouldn't be happening and importing all the *** from china seconded of all are economy is getting worse are worse due to America getting cheaper goods from china losing good well paying jobs in Canada and America for cheaper products u people these days are just *** stupid lets get stuff for cheaper and cheap it cost just as much to import it with oil and gas from those big ass cargo ships to get it to us in the first place and all the resources it takes to make all this *** from China WELL GUESS WHAT *** CHINA
OK the knock off is made in China and the money leaves the US..I am not happy with that. But for all of you saying the real otterbox is made in the US...lol...You need to go to otterbox.com and watch their video on how to spot a counterfeit...It tells you they make the real otterbox in Mexico. At 1st I was a bit upset that I accidentally bought a counterfeit. But, after thinking about it Mexican product vs Chinese product... 2 times the price to by a actual otterbox which is made in Mexico or 1/2 that amount for China. Seriously before you go crying about buying an American Made Product make sure where in America it is made. We live in the U.S.A. which only makes up a part of the America's...So for my wallet the Chinese version will do..It all goes somewhere else anyhow.
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