Oh SNAP! China’s IPR Theft under Federal Investigation

Sat, May 15, 2010


Oh SNAP! China’s IPR Theft under Federal Investigation

(The header image is not a Can-Am Spyder)

Joe Delmont, over at Dealer News, just released a story through their Dealer Alert that discusses a move by the Fed that could spell the end of the cheap clone scooter here in America.  Can you believe THAT?

Not a Honda Big Ruckus

(Not a Honda Big Ruckus)

Federal Agencies already gave the Chinese the smack down for child safety provisions, then they roughed ‘em up for EPA violations.  NOW, the U.S. International Trade Commission is investigating the effects of intellectual property rights infringement on the U.S. economy and U.S. jobs, as requested by the Senate Finance Committee.

Not a Honda Reflex

(Not a Honda Reflex)

I bet if a bunch of us scooter nerds went out for pints one Saturday night, we could come up with at least 25 examples of IPR infringement by Chinese companies.  What effect do these clones have on our jobs, sales and profits here in the USA?  That’s what Polaris, Harley, Arctic Cat, and U.S. operations of Japanese companies such as Honda, Kawasaki, Suzuki and Yamaha, want to find out.

Speaking of “cloning”, I’d like to paste a little snippet of the story, so you can see what moves are being made to prevent these sorts of property theft.

“Depending upon how broadly the ITC wants to define U.S. companies, it could include most powersports companies doing business here, including OEMs such as BRP, KTM, Piaggio and Triumph, as well as aftermarket companies.

The report on types of IPR infringement is due by Nov. 19, 2010, and the second— on the impact of these infringements— is due May 2, 2011.

In requesting the investigation, Committee Chairman Max Baucus (D-Mont.) wrote that more than 80 percent of goods seized at U.S. ports for IPR infringements came from China. He also noted that intellectual property accounts for more than 40 percent of U.S. economic growth.

As part of the investigation, the USITC will hold a public hearing on June 15, 2010. Written comments also will be accepted. All written submissions, except for confidential business information, will be available for public inspection.

I’ve been hearing for years about how Chinese manufacturers steal designs and produce replicas of popular machines and PG&A items made by U.S., Japanese and other manufacturers. Now is your chance to step forward and describe how your products have been illegally copied and how you have been financially injured.

So, whaddua think?  Anyone wanna go out for pints this weekend?  OR, if anything comes to mine, why don’t you post it as a comment.  Manufacturer, model and what it clones.  Let’s see if we can hit 25.  :)

26 Responses to “Oh SNAP! China’s IPR Theft under Federal Investigation”

  1. Steve Guzman Says:

    Manufacturer: Model: Clones the:
    Roketa MC-54B-250(5RY) Honda Reflex
    Roketa C-95-250 Can-Am Spyder

    Chongquing Astronautic Bashan Motorcycle Co. LTD
    Big Rugged 150 is a clone of the Honda Big Ruckus.


  2. Enviromoto Says:

    I was under the impression that if you made 7 changes to a product that you were no longer “cloning” that particular design. I seriously doubt that this report or legislation will stem the tide of Chinese imports only the design.

    To add to the list:

    Hammerhead La Vita 150 EFI is a clone of a Vespa P150


  3. Blue Mark Says:

    Hmmmm … would the 2T Stella be in the clear? Even though India’s LML came about the design honestly, and improved on the original?


    • Steve Guzman Says:

      Hrm.. Interesting Blue Mark. You know, it seems like since LML was manufacturing the Vespa P series scooters under licensing from Piaggio, that it’s a bit different. As long as LML is abiding by their agreement with Piaggio then everything should ok. Now, if LML didn’t have that relationship and just “up and made” a Vespa P clone and Piaggio was like, “HEY! Doesn’t that look like OUR scooter?” it would be a whole different ball game. I like the Stella, but IF LML didn’t have legal rights to manufacture and sell the scooter and they were doing so without paying some sort of royalties to Vespa for the original design, it should not be on the market. Didn’t Vespa and LML already hash that out?


  4. Steve Guzman Says:

    Yeah? I dunno how they determine whether or not intellectual property has been stolen with something like scooters, but I have to wonder if the same rules will apply to engines. If so, the GY6 manufacturers might have a tough tango with Honda.

    If the legislation only affects design, I’d be good with that. I feel bad for someone who can’t sell a quality new or used scooter because an uneducated buyer can purchase a crappy knock-off online for less. Buyer:”Well, it looks JUST the same!”

    Imagine the scenario where we Americans study and work hard to design, research and develop something in hopes that we will be able to make a living from that work; so that, in turn, we can continue to improve our designs and create more quality products.

    So, it should really piss-off Americans to think that we consume MASS quantities of crap from China based on those very designs… to the point that today we are $755 BILLION dollars in debt to China.

    Really, that’s the case with anyone’s design. If YOU are responsible for making something that improves people’s lives, you DESERVE to be rewarded for that effort! You should feel like, “Wow! I did GREAT! I’m inspired to make even MORE great things for mandkind.” Not, “Well, I would make more things, but what was my reward for my last design? Seeing someone else get rich churning out huge quantities of sub-par facsimiles of my design?” Americans are ingenuitive and one of our greatest assets is our ability to design solutions. We’ve almost completely lost our ability to manufacture those solutions ourselves. What happens when we loose the drive to even design those solutions?

    China! Let’s compete! Mano a Mano, toe to toe. You design and invent YOUR best products and and the rest of the world will do the same. If your creations offer better design and manufacturing and can compete in the market, then YOU win and WE are inspired to do better… but YOU GOT to keep your eyes on your OWN paper.

    Pauca Sed Bona!
    “Quality over quantity!”


  5. Jeffraham Prestonian Says:

    What’s sad is that there’s only one reason these Chinese companies aren’t building quality, original-design scooters: PRICE. The retailers in the U.S. DEMAND a sub-standard product in order to hit a price point. Most of these retailers could not care less if the thing gets you home, or not. They’ll happily sell you another one of equal quality! When you can buy a container of 150cc scooters for $350/ea., delivered, you’re really not concerned about your end-users experience.


    • Steve Guzman Says:

      Hey JP! About that whole $350/ea container price. I do believe there is a place in the market for EVERY price point. There are people who will buy a $500 scooter and their are people who would buy a $5000 scooter. Granted, I find it nearly impossible for your average consumer to enjoy a pleasant owner experience on a $500 scooter, if they plan on using it for their daily commuter over the course of a few years.

      Who MIGHT enjoy a brand new $500 scooter as they are offered today? A MacGyver mechanic? Maybe, but more often than not they are purchased by someone with a disposable mentality. I’ve heard this quote before, “Hell! I’ll just buy it for $500, and when it breaks I’ll throw it away and buy another one.” Ugh, that breaks my heart… but that’s just my personal feeling on “disposable big ticket items”. If it’s not the “throwaway” person then it’s someone who is just unaware that they will spend MORE than $500 in parts and labor to repair that mail order scooter in the first few months of ownership.

      Believe it or not, I DO want there to be a safe, reliable, EPA approved, $1000 scooter on the market! ONLY IF, it is offered by a brick and mortar dealership with some sort of consumer support AND it’s design doesn’t infringe on someone else’s design under legally protected provisions.

      Oh, and “Why brink and mortar?” Because, I want their to be a real person to interact face-to-face with the consumer when they have a problem. It helps to build a more sustainable market.

      Thanks x1000 for the feedback JP!


  6. nik Says:

    HMMM the kettle calling the pot black Im aware of many violations of theft of Australian IPR, ugg boots just one example. lets not forget the American government paying the Chinese with gold plated metal posing as real gold bullion as well. Like Christ said let he without sin cast the first stone. Bring on the clones they are better value for your dollar.


    • Steve Guzman Says:

      Hey Nik! Funny, I had never heard about the “gold plated metal” thing, but sure ‘nuf here it is: http://www.americanfreepress.net/html/fort_knox_conundrum__208.html

      That’s shady right there. BUT, that’s just plain and simple cheating from one government to another. It’s not an individual’s ingenious design being ripped off and mass replicated like the Ugg Boot. While I (please don’t take this personal) think those boots are damned UGGly, the design should be protected. If the Chinese (or anyone for that matter) can make a boot that is similar but better (or at least unique) in design and function, then they deserve a place in the market.

      I still say “NO to CLONES”. If a manufacturer wants to give me “value for my dollar”, it better not be at the expense of someone else’s hard work and creativity! They need to work hard to design their own and THEN sell it to me for cheap. If it so happens that their design is better AND their product is cheaper, then they DAMN well deserve the it! (IMHO)

      Thanks for the input Nik!


  7. Tim Says:

    Yeah, while they are at it maybe they can persuade China into upping their overall build quality.

    All of this cloning should convince the original designers that people are still interested in the Big Ruckus, etc. and they might want to look into bringing them back or some similar scoot that would fit the bill.


    • Steve Guzman Says:

      I seems logical that if there were no cloned Big Ruckus scooters around that people would be a liiiittle bit more likely to buy a real Big Ruckus. And, the more real Big Ruckuses sold, the more likely they are to remain available from Honda. That, and the lower availability will cause the product to maintain a higher value and prevent the “Why would I buy your used Big Ruck for $4990 when I can get this Big Rugged 150 for $1825?” (real price)

      THOUGH, the Big Ruck is a bad example ’cause it didn’t sell that well when it was the only scooter of its kind on the market. It was misunderstood buy most Americans… I, on the other hand, have the HOTS for it and know where to get one with less than 3000 miles on it. w00t!


      • Matt Says:

        My wife and I are new to scooters. We have Burgman 400′s. We want something smaller for camping. Big Ruckus is the answer but were already discontinued long before we could have gotten them. The clones are all that’s left. Every company I see that sells something like those get bad reviews. The 50 is not powerful enough plus the BR frame is more usable for touring the countryside while camping. The big problem is that BR’s are in demand (and still too much money for used) but Honda isn’t taking notice, I guess. Living in the midwest makes it very difficult to check out used ones, let alone finding 2. Also, no one in my town will touch the chinese scoots. We have 4 now that we used to get experience.


        • Steve Guzman Says:

          Hey Matt! You’re right, the Big Ruckus is hard to get, but don’t accept a copy. You will be sorely disappointed. I do see them on Craigslist pretty often, but they aren’t give-aways. Honda already holds it’s value just being a Honda, so tack on rarity and it’s tough negotiating. Have you thought about the Honda Helix?


          • Matt Says:

            The helix would be ok for going into town. The BR was going to be for camping trips where we can go into town or maybe take a trail. The Burgman’s are too big for that. I’ve been looking around at used BR’s but only pics. No one around us has these.

  8. Steve Guzman Says:

    Oh, and Nik! This is an example of what should not be allowed to sell under the new legislation: http://www.diytrade.com/china/4/products/5851356/australia_ugg_boots_china_wholesale_replica_ugg_5359.html


  9. Bill Says:

    There would be a much smaller market for knockoff scooters if the major players didn’t charge over twice as much for scooters in the USA as they do in other countries. For example, Honda sells the Honda Pleasure 108cc in India for 45,000.00 Rupees (~ $985) while the Honda Elite is $2999 in the USA. The knockoffs sell because not everyone can drop a few grand on a scooter and then still be treated like a second-class citizen unable to get replacement parts in a reasonable timeframe. As long as the manufactures treat scooters in the USA as expensive toys, that all they’ll ever be.


  10. Allworld Says:

    There are only a couple of Manufactures of Chinese scooters that are not ripping off other company’s work that I can think of off hand.
    CFMoto and Linhia, other than that it seems most of the “Chinese” brands are simple assemblers using generic parts compiled from a stock pile of copies of copies.
    The Government should crack down on the importers, don’t penalize the consumer for buying what is available to buy or the retailers for selling what is available to sell. The US Government has enough irons in the foreign trade fire, so to start making demands on the Chinese companies/government on what they can and can not produce would lead to difficulties for both sides.
    Simply keep the control on the imports. If for example; Honda allows Goldenvale (Roketa) to import the MC-54 250 (244cc) or Yamaha allows the use of the 257cc engine….and it complies with current DOT/EPA laws then let them import it. If a MFG. feels they are being ripped off, then stop the import and sales till the issue is resolved and leave the retailers and consumer out of the mix.


  11. dudel Says:

    I hate when people say, “All scooters are crap. A [person I know] bought a scooter and it was complete garbage. You will spend the whole summer trying to make it run and eventually toss it in the trash.”


    Pep Boys has agreed to pay $5 million in civil penalties and take corrective measures to settle claims that it violated the federal Clean Air Act by importing and selling Chinese motorcycles, ATVs and generators that do not comply with environmental requirements, the U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department announced Monday.


    - dudel


    • Steve Guzman Says:

      Sad… and Pep Boys probably made a good profit off of them and thought the idea was genius at the time. A good example of “Mo’ money, mo’ problems”. Thanks for the link Dudel!


  12. philntex Says:

    Steve, Here’s one knocking off a Ruckus (but, it’s air-cooled):


    Be sure and scroll down below the specs and read…it just keeps gettin better…



  13. Leo Says:

    Let’s see. American companies have been outsourcing cheap labor for years to save a buck or two, the places where this labor comes from are now becoming financially secure while America struggles. Then all of a sudden you get these trumped up reports about how these “inferior” quality products are bad and they violate copyright infringement by companies and firms that are hired by the government. I know that some on here just have an aversion toward chinese scoots (although Taiwanese gets approval, last time I checked it was still technically part of the REPUBLIC OF CHINA!) and that’s cool. You are entitled to your tastes, but I’ve seen “nuovo” Piaggio scooters crap out as well. It’s all in the upkeep. As a matter of fact speaking of Piaggio, they (along with H-D) and others have been using chinese labor. I’m not one of those teabagger types that are crying about socialism, but we should have variety (in styles and in price)! Why all the snobbery?


    • Steve Guzman Says:

      BINGO Leo! “we should have variety (in styles and in price)!” is right on the money. But, to make things fair, the manufacturer should take on the expense of designing the scooters they sell… or rather hiring the designer, I wouldn’t expect them to do the design themselves. I’ve seen it happen before and some of the most hideous machines on wheels have resulted. It’s not “snobbery” to ask a company not to sell something that is the spitting image of a Honda Ruckus, Reflex, or Yamaha Morphous. Again, if they can independently design and build a scooter that looks and performs as good as those while keeping them affordable they should sell well and Honda / Yamaha should be inspired to do better for us here in the USA, perhaps increasing availability or lowering prices… but how are they going to compete for the average consumer’s dollar when the competition is making a halfbaked replica for half the price? You average consumer see’s the packaging and assumes it’s the same thing… These aren’t knock-off Rolexes here, these are government regulated transportation. What if the Chinese made a copy of the Honda Accord? What affect would that have here? Would it be a good thing? Would it be a sustainable thing? What would dealers and repair garages think about it? What would the owners of “real” Honda Accords have to say about it? Would the clone have the same crash test rating? Would it offer the same reliability?

      “It’s all in the upkeep.” is half true. I have heard of Chinese scooter going the distance. HELL, the German designed Sachs MadAss is built in a Chinese manufacturing plant and POC Phil rode one across the country… through the hills… in the winter and the only thing that broke was his ASS! Yes, the MadAss does cost more than many other Chinese scoots of similar displacement, but also has tighter tolerances from the QA (quality assurance) crew.

      Now, THAT being said… I have seen people with a penchant for scooter repair and a deep aversion for buyer’s remorse take a discount, mail-order scooter and run it for thousands of miles. They didn’t mind the challenge and actually enjoyed finding where the manufacturer cut corners. They took the time to work out all the bugs, changed the fluids every couple hundred miles and earned the right to brag to their friends that they got their scooter for $800.

      That’s great for those punishment gluttons, but when corners are cut, there’s a price to be paid somewhere. Sometimes the wage is “consumer experience” due to excessive shop time or parts availability. Sometimes it’s “consumer experience” due to poor reliability or safety. Sometimes the wage is “local scooter shop sustainability”. It’s hard for a shop to stay in business if someone is selling a clone of your scooter online for much less. It’s hard for a garage to keep their customers happen when the mechanics themselves aren’t happy… Well, some mechanics are happy with the repeat business. Sometimes the wage is the elimination of higher quality options. Why do you think most of Honda and Yamaha’s scooters aren’t available in the USA? Partially, we don’t buy a lot of scooters… and when we do? There are a mountain of cheap mail order scooters available (that look just like theirs). Sometimes the wage is the store’s reputation and truth be told, there are lot’s of faceless, virtual shops who believe their reputation is a VERY small price to pay for the huge profits they make from cutting corners.

      Sure, the high end Vespa is nice… I’m not being a snob when I say that. You know what else would be nice? A safe, reliable, EPA approved, $1000 scooter on the market offered by a brick and mortar dealership with some sort of consumer support AND it’s design doesn’t infringe on someone else’s design.

      Oh and PS… I have also seen some “nuovo” Piaggios turn to crap. Aprilias as well. Remember the SportCity 250? It’s not the same machine it was when I reviewed it back in 2008.


      • Orin Says:

        …and the only ones who’d have the resources to build and market the bike you describe are… THE CHINESE!

        Not to be confused with the snake-oil salespersons (who are usually American) flogging shoddy, non-complying scooters in that price range. But they can only get away with it because the vast majority of Americans consider a motor scooter to be a TOY, not a motor vehicle. The Chinese are merchants and traders—if you wanna buy crap, they’ll sell you crap. If you want quality products, they can do that, too (e.g., Yamaha Vino 50).

        Nobody in the scooter biz is seriously considering the kind of marketing and dealer support Honda offered in the 60s because THE MARKET IS TOO SMALL. Anyone seriously interested in selling scooters or motorcycles in the U.S. must spend at least as much time and effort selling the IDEA of riding. Nobody’s doing that. Nobody seems to WANT to do that…

        Scootin’ Old Skool


  14. Orin Says:

    I saw one of those Ruckus knockoffs outside the Fred Meyer on Glisan yesterday, but the name was not the one you mention. It looks like it might actually be an okay bike…

    Scootin’ Old Skool


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