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Stuck on You: Indiana's
Abro Has Big Beef By NEIL KING
JR. (See Corrections & Amplifications item below0.) SOUTH BEND, Ind. -- Peter Baranay, president of Abro Industries Inc., a small seller of glues, tapes and epoxies, stands before the company's "Wall of Shame." It features dozens of faked Abro products intercepted overseas. Displayed in the basement of the company's headquarters here, most are straightforward copies with minor differences. Some swap the Abro trademark for Ambro, Arbo or Abra. Others use the Abro brand but for products Abro doesn't make. "This is all run-of-the-mill piracy," says Mr. Baranay. "But Hunan Magic has taken this to a different level." Abro's two-year fight with Hunan Magic Power Industrial Co. marks a new twist in the annals of international trademark piracy. Hunan Magic isn't just knocking off a few of Abro's products. It's acting as though it is Abro Industries. "This is attempted identity theft at a corporate level," Mr. Baranay fumes. The Chinese company, based in the city of Liuyang in Hunan province, now advertises and ships around the world more than 40 "Abro" products, from super glue to silicon sealant, in exact replicas of Abro's packaging. Hunan Magic's owner, Yuan Hongwei, has Abro's logo on his business card. He touts his firm as the real Abro, and warns customers away from impostors.
From its South Bend headquarters, Abro sells the sorts of products -- "stop leak" for car radiators, plastic filler for dents, special tape for cracked windshields -- that poor countries use to hold themselves together. Its biggest seller is a tube of silicon that forms gaskets of all shapes and sizes. Mr. Baranay, a 52-year-old with thick gray hair, took over as head of Abro in 1980 and today owns all of the company's shares. The company's annual sales, now spread across more than 130 countries, will hit nearly $100 million this year, up from just $6 million when Mr. Baranay took over. But fakes, he says, are costing Abro at least $10 million a year in lost sales -- which, considering that the company doesn't sell DVDs or some other highly-visible consumer item, astonishes Mr. Baranay. "We hawk tapes and glues and spray paints to the Third World," he says. "Go figure." Hunan Magic sees no need to apologize about its run-in with Abro. It believes it has every right to do what it's doing. Company attorney Peng Jianju says in an interview that it's a "coincidence" that its Abro-branded products are identical to the U.S. versions. He says Hunan Magic developed its own Abro brand in 1996, only to run into opposition from Abro Industries a year ago. The Chinese company is still trying to win legal rights to the brand in China, he says. Mr. Yuan, the company president, declined to talk about the fight. Abro, all but unknown in its own hometown, designs and distributes products but contracts the manufacturing to other U.S. companies. The company's corporate roots go back to the 1930s, and the Abro brand goes back to the 1970s. Abro is profitable because of its high volumes and strong market shares in many countries. In Pakistan, the generic name for masking tape is "Abro." "We live and die by the strength of our brand," Mr. Baranay says. Abro's first pirates popped up around 2000 in India, Turkey and parts of the former Soviet Union. Cracking down on them proved relatively easy. Abro's investigators tracked down rogue factories, and local authorities prosecuted counterfeiters. Part of the problem with Hunan Magic is that the quirky Chinese legal system makes it difficult to prosecute counterfeiters. Also, local authorities are reluctant to hassle Chinese companies exporting an estimated $20 billion a year in counterfeit products. Mr. Baranay and his top salesman, Timothy Maranais, first heard about Hunan Magic from Abro's Bosnian distributor, who stumbled upon the company's booth, loaded with Abro products, at the huge, twice-yearly Canton Trade Fair in Guangzhou, China, in 2002. Abro sent investigators posing as buyers to Hunan Magic's offices in the provincial city of Liuyang. They finagled a tour of Hunan Magic's main supplier, a factory owned by Mr. Yuan's wife, where they saw stacks of fake Abro products labeled "Made in USA." Abro's lawyers persuaded local trademark authorities to raid the factory that December, Mr. Baranay says. For months, Abro fought for a copy of the raid report, only to learn that authorities had fined the factory $600 for "unfair competition," without mentioning trademark violations or Hunan Magic. In October 2003, Mr. Maranais flew to China to poke around the Canton Trade Fair. "So I walk up to Hunan Magic's booth and my eyes bug out," he recalls. There was a huge sign overhead that said "Abro," and stacks of catalogs filled with Abro products. Dozens of buyers crowded around, "including many of my own customers," he says. Mr. Maranais complained to the fair's trademark police. A group of local officials, several in uniform, charged up to Hunan Magic's booth, led by Mr. Maranais. "I went right up and said, 'The party's over -- meet Mr. Abro,' " he says. Undaunted, a Hunan Magic salesman produced a catalog displaying Abro products he said the company had a right to sell. One was an epoxy whose packaging for years had featured a photo of Mr. Maranais's wife fixing a bicycle. Hunan Magic's version was identical. "There I was staring at my wife's face," Mr. Maranais says. "And this guy claimed to own her." Only after he showed authorities a photo of his wife pulled from his wallet did they seize the Abro products on display and detain the booth's salesmen. Again, victory was brief. The company received no fine and later sued the authorities, according to documents provided by Abro. Hunan Magic grew more brazen at the next Canton trade fair in April. The Abro name graced the front of the company's catalog, which included 18 pages of Abro products and a warning from Mr. Yuan. "During last years some manufacturers ... overlook Chinese law and invade our brands," it read in broken English. "If further intruders appear after this date, our company make sure to claim against the companies, even to sue them." Weeks later, the Bush administration's top official on China trade, Josette Shiner, got wind of Abro's struggles and decided to invite Mr. Baranay on a trade mission to Beijing. "Here was a small company that had done all its homework and taken all the right steps, and yet its problems illustrated all that is wrong in the Chinese system," says Ms. Shiner. While traveling with Ms. Shiner in July, Mr. Baranay won an audience with senior officials at the Chinese Commerce Ministry and the national trademark office. Within weeks, Abro got an expedited hearing at China's trademark office, which ruled against Hunan Magic's attempt to win a trademark for certain Abro glues. Hunan Magic is appealing. Abro last month sued Hunan Magic in China for trademark violations, seeking $600,000 in damages. Even if Abro prevails, though, Mr. Baranay has new battles to fight, with Abro fakes and fakers popping up in Latin America and other places. The company now has more attorneys on hire than it has employees. "A guy in Argentina has just registered a trademark for 'Zabro,' " Mr. Baranay says. "So do I now have to go after him?" --Cui Rong in Beijing contributed to this
article. Write to Neil King Jr. at [email protected]1 Timothy Demarais is Abro Industries Inc.'s vice president for international sales. His surname was incorrectly given as Maranais in the article above.
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![[Peter Baranay]](Abro_files/image006.gif)
Abro
Industries, with just 24 employees and no U.S. sales, has shown more mettle
than many other U.S. companies that have railed about piracy in China. It has
hired dozens of lawyers and investigators, sued Hunan Magic, and gotten raids
conducted in the United Arab Emirates and other countries, at a cost to Abro
so far this year of more than $600,000, Mr. Baranay says. The U.S. Trade
Representative's office has been championing Abro's cause in Beijing. Yet its
Chinese nemesis keeps on selling Abro products.