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How A Small Indiana Company Fought Back Against Chinese Counterfeiters

Mar 20, 2019
Originally published on March 20, 2019 8:03 pm
Copyright 2019 NPR. To see more, visit https://www.npr.org.

AILSA CHANG, HOST:

There's a story about China that's taken hold during this trade war, and it goes something like this. China is garbage at protecting American intellectual property. But the story I'm about to tell is a little different.

(SOUNDBITE OF MUSIC)

CHANG: The reason I even know about it is because last year, when the Trump administration was collecting horror stories of American companies who say they were ripped off by China, one small Indiana company called ABRO raised its hand and said, no, we think China's doing a great job on IP. I had to hear ABRO's story.

You can still hear me - right? - if I'm talking like this.

TIM DEMARAIS: I can hear you.

CHANG: Great, great, great.

DEMARAIS: I can hear you.

CHANG: So I called them up.

OK. Go ahead and introduce yourselves.

DEMARAIS: Ailsa, my name is Tim Demarais. I was vice president at ABRO Industries.

CHANG: So would it be accurate to call you, like, the second-ranked person when you were there?

DEMARAIS: I think that'd be fair to say, yes.

CHANG: OK, cool, cool.

DEMARAIS: Yes.

CHANG: And the first thing I wanted to know was, what even is ABRO? He told me they make stuff like epoxy glue, spark plugs, engine degreaser - things that handy people keep it in their garage. But they don't sell any of their stuff in the U.S., only abroad.

DEMARAIS: Today, when you refer to a roll of masking tape in Pakistan, they simply ask, can you get me a roll of ABRO?

CHANG: Demarais says if you want to understand why ABRO is now defending China when it comes to intellectual property, you have to go back to 2002. He was walking around a trade show in southern China trying to track down some counterfeiters.

DEMARAIS: I peered around the corner hiding really behind a booth. And I was literally shocked to see what I - was in front of me.

CHANG: Right in front of him was a booth that looked to be an ABRO booth, but ABRO hadn't paid to have a booth at the show.

DEMARAIS: They were passing out ABRO business cards, ABRO catalogs with all our products in it to my ABRO customers that were visiting. So it was total confusion.

CHANG: Oh, my God.

DEMARAIS: They were telling people they were the ABRO subsidiary in China.

CHANG: Except ABRO didn't have a subsidiary in China. So Demarais gathered some show officials, went up to this fake ABRO booth and got right up in the face of the man who seemed to be in charge of the operation.

DEMARAIS: He looked up at me. I said, party's over. Mr. ABRO is here.

CHANG: But then, the Chinese guy said to him very calmly, no, you're the fake. And he reached into a briefcase and pulled out documents that he said showed he was the one who owned the ABRO trademark in China. Demarais, though, knew something this man did not. He pointed to a four-foot-tall poster inside the booth. It was a blown-up photograph of a woman who appears on every package of ABRO epoxy glue.

DEMARAIS: I said to the owner, who is that woman you have in the photo? He said, that's just a Western model. At that moment, I just lost it. I said, that is not a Western model. That is my wife.

(SOUNDBITE OF MUSIC)

DEMARAIS: I said, first, you steal our corporate identity, and now, you're stealing my wife.

CHANG: That shut everyone up. The next day, the counterfeiters were gone.

(SOUNDBITE OF MUSIC)

CHANG: So was that the end of the story?

DEMARAIS: Oh, I wish it was, but that was only the beginning of the story.

CHANG: Because a few months later, Demarais was in Saudi Arabia, and he saw something that looked like ABRO's epoxy glue, only there was something different about the packaging right where that picture of his wife usually appears.

DEMARAIS: The woman had an Asian face. They kept the same outfit my wife was wearing but just cut her head off and put the Asian face in there.

CHANG: Wait. So it was your wife's body with an Asian head at the top?

DEMARAIS: Wife's body, counterfeit - wife's body, Asian face - very clever.

CHANG: This right here is the moment that Demarais vowed to himself I'm going to take these guys down, so he called in some professionals.

(SOUNDBITE OF LINK WRAY'S "RUMBLE")

BILL MANSFIELD: You see "Pulp Fiction?"

CHANG: Yeah.

MANSFIELD: OK. So when they got two dead bodies in the back of the car, you call in the wolf. We were kind of like that for trademarks.

(SOUNDBITE OF LINK WRAY'S "RUMBLE")

CHANG: Bill Mansfield is a former private investigator who helps people with special trademark problems. He'll be the first to tell you, though, he does not exactly look the part of the wolf.

MANSFIELD: I'm perfectly round. I'm a perfect circle, if you saw me.

CHANG: You mean you're rotund.

MANSFIELD: I am a sphere with legs and arms and a little head on top.

CHANG: Mansfield told ABRO the best way to stop counterfeiters is to make counterfeiting as personally painful as possible for them. So he laid a trap. He set up a fake company and had that company order shipping containers full of glue from fake ABRO. They sent the glue over to the U.S. and just like that, fake ABRO had broken U.S. law. Now, all ABRO had to do was to convince the boss a fake ABRO, a guy named Yuan Hongwei, to come to the U.S. so police could arrest him.

MANSFIELD: Yuan Hongwei is also not an idiot and said, no, I don't think so, but I will be in London in three weeks. Let's meet there.

CHANG: Mansfield had three weeks to figure out how to arrest a Chinese citizen in London and get him extradited to the U.S.

MANSFIELD: And by the time he touched down in London at Heathrow Airport, his plane taxied left instead of right, came to a stop. Police came on, took him off in cuffs.

CHANG: Yuan Hongwei was behind bars for weeks in London. And then right before his extradition hearing, he posted bail and disappeared, only to surface later back in China. It seemed like ABRO lost, but ABRO had actually won because after London, Yuan Hongwei, who declined to be interviewed for this story, finally stopped counterfeiting ABRO's products. Bill Mansfield's playbook of making counterfeiting as personally painful as possible had worked.

(SOUNDBITE OF THE SOUND STYLISTICS' "CORNHOLIN")

CHANG: And it's a playbook Mansfield still uses today against other ABRO counterfeiters. Only now, there's a small tweak, one that involves drinking a lot of tea.

MANSFIELD: It's very good.

CHANG: What kind of tea?

MANSFIELD: Government tea - I'm not real clear. I have what's known as a gutter palate.

CHANG: Mansfield has found that in China, local authorities have a ton of power. So what he does now is set up lots and lots of meetings with the lowest-level officials who can conduct raids and arrest counterfeiters.

How do you reward these local authorities after a raid goes down? Do you take them out to dinner?

MANSFIELD: I award them with the key currency all bureaucrats love, which is a thank you and often a small plaque, a small plaque they can put in their office that they send pictures to people and everything (ph).

CHANG: A plaque? You really think that excites them, a plaque that they can hang up in their office? That's really why they're helping you?

MANSFIELD: The people I'm working with, yes. I spend a lot of time...

CHANG: Are you sure you never bribe people, Bill?

MANSFIELD: No, never.

CHANG: Mansfield says in the last decade, he's gotten a dozen counterfeiters around the world arrested and millions of dollars of counterfeit goods destroyed. And he says what he's learned in this whole process is that China does care about protecting American intellectual property. You just got to show up.

(SOUNDBITE OF MUSIC)

CHANG: I can't help but think, though, if China's system was working so beautifully, you wouldn't need a Bill Mansfield - someone getting on a plane all the time, drinking tea, schmoozing government officials - to protect your IP. That to me doesn't sound like a system that works. It sounds like a system you have to make work for you. Transcript provided by NPR, Copyright NPR.