A Chinese Court has handed down criminal sentences and monetary fines of unprecedented severity against two companies and their managers for counterfeiting the famous HOPKINSONS valves, which are manufactured and sold worldwide by The Weir Group PLC.
The cases were against two companies and responsible individuals who, since 2006, made and sold counterfeit HOPKINSONS branded valves, which quickly failed in service at Chinese power stations, causing serious injuries and damage, due to the defective nature of the product.
The counterfeiters were arrested by China’s Public Security Bureau (PSB) in late 2009 following in-depth investigations, and placed in custody. Weir, along with customers and partners, provided information that assisted in the investigations and in the prosecution of the counterfeiters.
The case went to criminal trial in the Yangzhou Intermediate People’s Court in Jiangsu, China in December 2010, and the prosecution proved that these valve products were counterfeit, failed to comply with compulsory national standards and were of poor quality. In addition, the defendants misrepresented their manufacturing location by telling customers that they were imported from the UK. The total sales generated from this illegal business operation exceeded $1.6 million.
The first company, Yangzhou Yikai Machinery and Engineering Co. Ltd., was found guilty of making and selling substandard goods and engaging in illegal business, and has been ordered to pay a fine of $1.09 million. Yikai's manager has been found guilty of the same crimes, sentenced to 15 years 6 months imprisonment and ordered to pay $203,000.
The second company, Shanghai Saimeng Mechatronic Engineering Co. Ltd. has been found guilty of similar crimes and ordered to pay a fine of $78,000. Saimeng's manager has been found guilty of the crimes of manufacturing and selling substandard goods, engaging in illegal business and counterfeiting trademarks. He has been sentenced to 16 years imprisonment and ordered to pay $211,000.
“It has taken us more than a year of perseverance, but the outcome of this case is reassurance to our employees, customers and shareholders that the unauthorised use of our trademarks will not be tolerated,” said Alan Mitchelson, Legal & Commercial Director of The Weir Group. “Such high fines and long criminal jail sentences are very rare in China for intellectual property crimes. The Weir Group greatly appreciates the support of police, prosecutors and Courts in China who have taken resolute enforcement actions against these counterfeiters including the seizure of these defective, counterfeit products.”
“Counterfeiting not only negatively impacts the economy and innovation, but also puts customers and users at great risk,” said Cyril Leung, Managing Director of Weir China. “Time and time again substandard counterfeit products have caused industrial down time and risk to human life. This case again highlights the importance to be placed on quality and safety.”