Hello neighbour, I’ve stolen your product design

Picture this. You have just set up your exhibition booth at the Electronica 2016 exhibition in Munich only to find the neighbouring booth next to you is exhibiting products with features that are fake copies of your patented product.

This is precisely what happened to German relay manufacturer Guner AG, a specialist in polarised latching relays for high currents up to 200A. It’s easy to imagine the outrage when it spotted on the neighbouring exhibition booth operated by Chinese company NCR Industrial-Clion Relay Co Ltd plagiarised copies of its relay design. Investigation by Gruner AG CEO Patrick Spreitzer confirmed the infringement of Gruner AG’s patents.

Fake relay products

Because the Gruner AG products are protected by German patent law the company was able to obtain a Cease and Desist order and the bailiff of Landgericht Munich 1, the Munich County Court, searched the booth of NCR Industrial-Clion Relay Co Ltd and removed the fake relay products.

Patrick Spreitzer described this as only a partial success against the plagiarists. He suspected there were other relays that were copies but despite that the Chinese company was allowed to continue exhibiting those.

Counterfeit electronic products are a worldwide business with huge profits for the perpetrators simply because they can avoid research and development costs and sell at dumping prices.

According to a recent report by analysts Ernst & Young, about 70% of all counterfeit products are still coming from China. In many cases, they are only spotted at exhibitions when manufacturers see their own product designs on a foreign exhibition booth.

Booming relay market

To some extent the counterfeit problem is encouraged by the fact the global market for relays is booming with an annual growth rate of nearly 8% and a projected value by 2020 $15billion.

Application areas that are feeding this market growth include automotive, smart grids and wireless technology. And the Asia Pacific territories of China. Japan and India have the largest appetite for products with over 40% share of the market.

Industry observers are well aware a large chunk of this relay market growth is fed by the demand from the automotive sector. New research by analysts Global Market Insights maintains automotive apps will soak up over $14billion worth of product in five year’s time.

Operational challenges

Vehicle applications pose well-known operational challenges to electronic products and these include voltage fluctuations, extremes of temperature, vibration and voltage surges. Relays handle these conditions well and find many applications in vehicle power train systems. However, carmakers, as well as implementing greater numbers of relays in vehicles, are also calling for design miniaturisation, which is where investment in research and design soaks up considerable sums of money.

So on the surface all looks buoyant and prosperous for the relay manufacturers.

But its not plain sailing. Internationally there is insufficient standardisation controlling the industry. This means production quality control methods can vary from country to country and industry observers are concerned this could hinder the market growth for relays.

Then of course there is the added problem of counterfeiters. Purchasing engineers who are tempted by the cheaper prices on offer may find themselves and the company they work for buying into huge problems.

Inadequate product specifications, poor production processes, haphazard product testing at the quality control stage almost certainly guarantees product failure at some point in the field. Admittedly these can vary from minor irritation to worst-case scenarios of causing lethal fires.

So when it comes to making relay purchasing decisions it may be worth remembering the expression “Ich bin nicht so reich, um billige Sachen zu kaufen!” which translated roughly says: “I cannot afford to buy cheap.”

Exhibition ban

Finally, this particular incidence of product plagiarism that Gruner AG experienced does raise questions for exhibition organisers. Should companies that are known to produce fake designs be allowed to exhibit at future exhibitions or should they be banned?

In this particular instance that is a question for the organisers of the Electronica Exhibition, Messe München GmbH.

Electropages will watch with interest at the next Electronica exhibition in 2018.