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Foreign firms steal U.S. designs, sell for less
Intellectual property theft is another blow to American companies' efforts to remain competitive.
Sunday, July 06, 2008
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WASHINGTON — The theft was stunning and audacious: a Chinese manufacturer had copied a part made by the Morgal Machine Tool Company in Springfield right down to the "M" logo emblazoned on the piece.
What was more stunning was what happened next: One of Morgal's biggest buyers in 2005 brought the part to them and, apologetically, said they were switching their business to the Chinese company, which could offer them the part for what Morgal was paying for raw materials alone.
That decision ultimately cost Morgal 20 jobs and $3 million in sales.
Forget for a second NAFTA, CAFTA and the rest of the alphabet soup. While politicians debate where U.S. trade policy should go, some Ohio manufacturers are more concerned with a simpler issue: Making sure foreign-owned companies don't copy the parts and sell them for far less than U.S. companies can.
The issue is one that has rallied Republicans and Democrats alike: Sen. George Voinovich, R-Ohio, and Evan Bayh, D-Ind., have introduced a bill that would coordinate federal agencies' response to tracking, identifying, arresting and prosecuting intellectual property theft. The bill also would establish formal processes for consulting with small and medium-sized businesses like Morgal to help them protect their intellectual property.
According to the U.S. Chamber of Commerce, counterfeiting costs U.S. businesses as much as $250 billion annually, and 750,000 American jobs have been lost because of counterfeit merchandise.
There's also a safety issue: Counterfeit drugs make up 10 percent of the pharmaceutical market.
Voinovich hopes to get his bill passed this year.
That won't be soon enough for Morgal, which has been in business since 1939. Jamie McGregor, a salesman whose family owns the company, said it is trying to keep afloat during tough times.
Given a fair playing field, he said, Morgal could compete against anybody. But he said fighting the intellectual property theft would have been prohibitively expensive, potentially costing millions of dollars.
"They don't make it as easy as it sounds," he said.
