Sound Equipment Maker Bose Alleges Copyright Infringement by Chinese Companies

May 31, 2018 Updated: October 8, 2018

American sound equipment maker Bose has filed a complaint to the U.S. International Trade Commission (USITC), alleging that several companies, including from China, have infringed on the company’s copyrights on earpiece devices.

The complaint, pursued under Section 337 of the Tariff Act, was filed on May 24, according to federal records. The USITC, a federal agency that oversees trade practices, has 45 days to conduct an investigation and determine whether the copyright-infringing products caused unfair competition for the complainant. If the alleged parties are found guilty of infringement, the Commission can exclude the products from entry into the United States or issue a “cease and desist” order, or both. Violators are also liable to civil penalties, “up to $100,000 a day or twice the value of the imported articles,” according to the USITC website.

The companies accused of copyright infringement include Misodiko, Phonete, and TomRich of China; Smartomi Products in Canada, Sudio AB of Sweden, and American companies such as 1More USA based in San Diego, California. All specialize in making audio electronic products such as earphones.

Misodiko’s products are available for sale in several countries, including the United States, via the e-retailer site, according to Misodiko’s website. The three Chinese companies are based in the southern Chinese manufacturing hub of Shenzhen, according to Chinese business news site Yicai.

At press time, Bose did not respond to an email requesting clarification on which products it claims those companies have violated copyright.

In recent months, the United States has pressured China to address its intellectual property (IP) theft practices by proposing punitive tariffs on Chinese imports. The move has sparked retaliatory tariffs by the Chinese regime.

The recent American tariffs focused on Chinese acquisitions of U.S. tech firms that have developed proprietary technology, in addition to U.S. joint ventures feeling pressured to transfer IP to their Chinese counterparts in exchange for market access. But Chinese production of counterfeit goods is another major problem.

China is the source for more than 70 percent of the world’s physical trade-related counterfeiting, valued at more than $285 billion, according to a 2016 report by the U.S. Chamber of Commerce.

The Washington-based nonprofit International Anti-Counterfeiting Coalition estimates that intellectual property crimes annually cost U.S. businesses several hundred billion dollars in lost revenues.

An April report by the U.S. Trade Representative’s office also named China as a primary IP infringer, to be placed on its “priority watch list.”

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