Another business model bites the dust

Originally posted 2006-06-14 10:35:51. Republished by Blog Post Promoter

It’s easy to make money on licensing when you don’t pay the royalties:

A multi-agency task force has executed a search warrant on the country’s largest importer of DVD recorders and players, confiscating eight tractor-trailer loads of recorders allegedly bearing counterfeit trademarks.

James Sibley, a Santa Clara County deputy district attorney, said the warrant was served June 8 on Fremont-based Cyberhome USA, a U.S. affiliate of Cyberhome Taiwan. Sibley said the value of the 20,000 units exceeds $2 million. …
“Cyberhome ran up a $22 million bill with Philips, which they didn’t pay,” Sibley said. “So Philips pulled their license. The problem is that Cyberhome kept manufacturing and selling recorders and players under the Philips trademark.”The products weren’t inferior, Sibley said — essentially, they were the same as the recorders and players sold under the licensing agreement. But they were not authorized by Philips — and Philips wasn’t getting paid.

“This is about trademark infringement, not product quality,” Sibley said. Sibley said Cyberhome USA was importing the unauthorized DVD equipment “by the shipping container load” from Taiwan.

Under the trademark counterfeiting statute’s appropriately draconian civil penalties, if these facts pan out Cyberhome and its principals are in big trouble. Of course, if they meant to eventually pay it back and it’s all a terrible misunderstanding, well, that’s something else, isn’t it?

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Author:Ron Coleman

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