By on November 29, 2011

Blue car but no blue oval.

Wintertime is coming, mama, the windows are filled with frost. So I went over to the nearby strip mall to get some thermal underwear. That doesn’t rhyme even half as well as Dylan’s most forced rhymes, but it’s really what happened. There’s a C.W. Price store in the mall. It used to be a location of the A.J. Wright chain that went under, and from the looks of things, all they needed to change were the signs. C.W. Price carries pretty much the same overstocked and distressed merchandise as A.J. Wright. Not quite as depressing as shopping at Big Lots but definitely not the Somerset Collection. While I was at the store of course I had to check out the cheap R/C cars that they had on sale for $6.99 and $7.99 with the other Christmas toys. At first glance they looked like Ferraris, Lamborghinis, Bugattis and Ford GTs. Actually, at second and third glance they still looked like those cars, scale models accurate down to the Veyron’s distinctive black hood, horseshoe Bugatti grille and exposed mid-mounted W16 engine.

Not-a-Bugatti

Nowhere, though, do the words “Ferrari”, “Lamborghini”, “Bugatti”, or “Ford” or those companies’ badging appear anywhere on the R/C cars or on the packaging. In some unintentional irony filtered through the joys of “Chinglish”, the Ford GT does have a decal at the top of the windshield that reads “FAMOUS CAR”.

Can I write anything funnier than reality?

Welcome to the wonderful of Chinese manufacturing where out the front door your vendor sells you your patented or licensed goods and out their back door they sell essentially the same products, only without branding, to dollar store distributors. It’s not a new story. Years ago Georgena Terry, founder of Terry Precision Bicycles for Women, found knock offs of her patented woman’s bike saddle on sale in the US that, based on the molding markings, had to have been made by her own supplier in China.

Legitimate Lamborghini? 

My guess is that something similar happened with these R/C cars. Xiangda Toys Factory, and Hunson Trading Co. are the brand names on the toys. What little that I could find out about the companies is that Xiangda makes R/C toys and the Hunson distributes R/C toys and other toys to dollar stores in North and South America. The Hunson labeled toys carry the XTR brand, which I’m guessing stands for Xiangda Toy Racing.

Here’s what I think is going on. If Xiangda or Hunson want to reply, we’ll give them an opportunity to do so. I think that Xiangda is the manufacturer and the Hunson is the distributor of all of these, regardless of how the specific toys are branded. On the multitudinous Chinese goods trading sites, you can find Hunson offering toys branded with names like Lamborghini so it’s possible that one or both of the companies has a legitimate license to make scale models. The toys could be complete knock offs, but they appeared, as I said, to be fairly accurate in terms of body shape, so they just as likely could have been molded with tooling made to produce licensed goods. I’m guessing that someone thought that they could make a few extra yuan by diverting some goods to market without the additional cost of paying a royalty fee.

There appears to be little risk. After all, this is being done in plain sight. Since they don’t sell the cars branded with the real car company names, as long as those brand names never appear on shipping manifests or customs documents nobody will ever be the wiser. Bugatti, Ferrari and Lamborghini’s licensing agents and lawyers don’t typically shop in stores like C.W. Price. Ford’s lawyers might have driven by the Price store on Telegraph in Redford, on their way to the Glass House in Dearborn, but again, they’re not likely shopping for their kids’ toys at dollar stores and deep discounters. Though it’s likely to be under the radar of white shoe law firms and their clients, dollar stores and deep discounters are still big business. There are over 20,000 stores operated by the three largest dollar store chains. Licensing deals typically pay 7-12% of wholesale prices as royalties. That means that for every one of these R/C cars that are distributed, somewhere between 25 and 50 cents doesn’t get paid to a car company that is rightfully theirs. That may not sound like much but when you consider that these toys are shipped over by the container load the IP infringement from quasi knock offs like these must represent significant sums of unpaid royalties.

Scale model radio control Fauxrrari

Of course, these days cars’ shapes are protected under intellectual property laws just as surely as Ferrari’s prancing horse and Lamborghini’s pawing bull are protected trademarks. My day gig is custom machine embroidery and I’ve gotten cease and desist letters from car companies unhappy about my embroidery designs that portray their cars. They were overreaching but it seems to me that while artists and photographers might have some leeway and fair use rights to create original art depicting a protected car design, there’s no doubt that if a car’s shape is copyrighted, making and selling scale models of that car would be infringing on the car company’s intellectual property, with or without a logo decal.

It happens with race cars too. When A.J. Wright was still in business, during the holiday season they’d sell R/C Formula One cars that looked just like the Ferrari and McLaren F1 cars, down to the coloring of the sponsors’ decals. Only if you looked closely the sponsors’ names were close but actually fictional, and nowhere did it say the team names or F1. It reminded me of a store that would advertise selling “names like Hitachi and Sansui” and when you get there they are selling knock off brands named Hatichi and Sunsai.

This isn’t going to stop. As long as there’s a market for quasi knockoffs and as long as the Chinese government and Chinese industries benefit from those knock offs they will continue to be made. If General Motors couldn’t get Chery to stop making the QQ, a copy of a real car, Ford isn’t going to get Xiangda to stop making scale model Famous Cars.

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23 Comments on “What’s Wrong With This Picture? Famous Car Intellectual Property Edition...”


  • avatar
    Monty

    This reminds me of a Mad Magazine parody of advertising wherein a store is advertising famous name brands at unheard of pricing. The famous name brands were akin to DaVinci stoves, Benjamin Franklin washing machines and so on. Famous Name brands, not famous Name Brands.

    This issue isn’t solely Chinese – it happens right here in North America.

  • avatar
    Lynchenstein

    So, the Truth in this article is that Chinese companies are willfully ignoring IP rights? This is the cost of doing business in China. This isn’t news to anybody, is it?

    • 0 avatar

      Not ground shaking news in the broader sense, sure, but still the immediate topic, the unbranded scale models, is a new look at the topic. Not everything has to be filled with deep truths. Some stuff is just entertaining.

      • 0 avatar
        Lynchenstein

        Fair enough. I wonder what can be done about it though… Anything? Are manufacturers at the mercy of the crooks who they pay to build their cheap products? I’d bet that the little they lose in unpaid royalties are more than compensated by the cheap manufacturing costs. Are these unbranded knock-off toys sold on the same shelf or in the same store as the above-the-board versions?

      • 0 avatar

        Bertel can probably address the topic of dealing with Chinese venders better than I can. In the past he’s said that it’s up to the customer. The ones that are on the ball and stay on top of things are less likely to get ripped off. What Bosch does is do all the proprietary tech in their own factories and let their JV partners do the less value added work.

        I don’t think you’re likely to see these on the same shelf as a licensed toy. I believe that these particular goods get routed mostly to dollar and discount stores.

    • 0 avatar
      drvanwyk

      Certainly not news here. http://www.thetruthaboutcars.com/2007/08/china-to-foreign-automakers-drop-dead/

  • avatar
    protomech

    Chery isn’t selling the QQ (unintentionally awesome name) in the US.

    WIPO aside, there’s little car manufacturers can do directly to stop knockoff production. If the production becomes onerous enough they can stop the importation.

    • 0 avatar
      carlisimo

      Kiu-kiu (very often written QQ) is Taiwanese for “chewy”, as in the texture of udon noodles. It’s what I always think of when I see that car’s name.

      It’s probably coincidence though. In Taiwan the term is known by Mandarin speakers, but it might not be in China (except in Fujian, since Fujianese is the same language as Taiwanese).

      • 0 avatar
        MrWhopee

        Funny, then, one review of the QQ here states that the inner door trim crinkle when the windows were raised and lowered. “Chewy” looks like an accurate name for the car.

  • avatar
    WaftableTorque

    Sometimes the appeal of travelling to Asia is looking for the “knock-offs” which aren’t.

    My wife picked up a few bargain winter coats from a bazaar in Ho Chi Minh City, a manufacturing hub for brands like Nike, Zara, North Face, and Tommy Hilfiger. They had convincing looking brand name labels on them, but we assumed they were fakes(even though who the hell would buy a downfill coat in a tropical city??)

    When we got back to Canada, we started looking for the same products in the stores. As it turn out, the Zara coats she bought were not only the current season, but identical right down to the washing instructions. The only difference was the price, which was 1/5th what the local store wanted.

    Don’t get me started on made-to-measure suits.

    • 0 avatar
      daveainchina

      The way this works is this. The place making these coats etc do production overruns of say about 10-20%. They then charge that back to who placed the order as material lost in manufacturing and other things.

      They then go and sell these for 100% profit, they don’t care that they are so cheap because to them, it’s pure profit, didn’t cost them anything.

      There are thousands of companies doing this in china and all over southeast Asia, welcome to the land of copying and believing there is nothing wrong with it, until someone copies something they did.

      • 0 avatar
        Steve65

        That goes beyond copying, into outright direct theft.

        I used to work for a small company that made and direct-sold down-filled products (I was the filler). Some of the sewing lots would be contracted out to sweatshops. They -always- tried the “we damaged some” stunt, and my boss would always insist they return the damaged material. And move on to another unethical local sweatshop for the next batch.

        He was also so vain that he insisted that we regularly cram his Porsche as full as we could with compressed products, rather than just buy a beater van to make deliveries.

  • avatar
    Jellodyne

    Hey, maybe they’re actually based on real domestic Chinese cars which just happen to bear a passing resemblance to Ferraris, Ford GTs, etc.

  • avatar
    Slow_Joe_Crow

    If they are using XTR as a brand name, do you think Shimano will go after them?

    • 0 avatar

      Maybe it means they won’t sell replacement parts after next year’s “new” and “improved” model comes out. I don’t know who is worse, Shimano or Singer sewing machines.

      • 0 avatar
        CliffG

        I can’t comment on Shimano, but if you own a Singer made prior to 1980 there aren’t many parts that aren’t available – at least the parts that might break. If you are unfortunate enough to own any of the current generation and need that circuit board? Like virtually all of the other mfg.s, including the expensive “European” makes (the Brand may say European, the county of mfg? Anywhere.) you are SOL. A throw away society gets what it begets…

  • avatar
    cfclark

    So is the “Xtreme Turner” the long-rumored sports car brainchild of Ted Turner?

    My new life goal is to acquire a Ford GT, so I can put a “FAMOUS CAR” decal on the windshield.

  • avatar
    Conslaw

    I don’t care if car companies require licensing of their designs, but it bugs me when toy makers can’t produce replicas of historic aircraft due to licensing considerations. I believe the US government paid the bills for designing the F6F Hellcat and F4U Corsair, etc. For that matter, we’re paying the bills now for the F-22 and F-35. At least as far as toys are concerned, these designs should be in the public domain.

    I’m not an intellectual property lawyer, but I think some of these licensing claims are bogus. Copyright law covers works of artistic expression. Most other design elements are covered by either standard patents or design patents with more stringent requirements for granting and shorter time limits than copyright. Trademark protection for product features and design is extremely rare. There should be nothing akin to “right of publicity” in product design.

    • 0 avatar
      daveainchina

      Frankly I think that because the government paid the bills for those models, companies should have to pay the US Gov for using them.

      Would you rather see all the money the US taxpayer paid to produce those planes go instead to China and other countries with minimal labor costs?

      At least this way the US Gov, and by extension the US taxpayer gets some benefit out of it still to this day.

      • 0 avatar

        That train of thought leads straight to the cities that have tried to copyright their laws and regulations. Public domain used to be used because the public should be able to use common cultural things.

        Part of Apple’s “genius” is making damn sure that product only goes to Apple. Employees have killed themselves for losing a phone. For just about anyone else, having anything made in China means factories run extra to sell off.

  • avatar
    Athos Nobile

    Last year’s X-mas, I saw in a Venezuelan store around 5-6 different variants of Hummer. In different scales, colors, names and “drives” (R/C, battery, pull-back…)

    Not to mention the ride ons. I wanted one of those for my son.

  • avatar
    krhodes1

    These do not come even close to being scale models. Caricatures at best. As such I think the car makers would have a fairly tough time going after them.

  • avatar
    RogueInLA

    I doubt the people buying these knockoffs are thinking about the IP rights of the manufacturers, they’re just looking for cheap christmas presents. They can’t afford to buy the real thing, because their earnings have gone down due to the exportation of the manufacture of this stuff to china. Would they not buy the knockoffs if they could afford the real thing? One would like to think they would, but probably not, just look at the proliferation of knockoffs of so many name brands. People buying the better known brands have to know they’re screwing someone who owns the name. As long as people (and manufacturers) are looking for ‘something for less’ or nothing, I don’t think this is going to stop. To be honest, if I’d seen these in the store, I just would have thought “cool, cheap R/C cars that look like more expensive models”. Until consumers decide to support the ‘real’ thing, there’ll be a market for knockoffs. It’s just tough to work up much sympathy for the manufactrurers who sent the production to china originally. They wanted to save a few bucks, and now they reap what they sowed.


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