Following yesterday’s (March 19) reports of a raid on a Chinese factory in which counterfeit Shure, Sennheiser, Harman and Yamaha products were seized, Malcom Hill, founder of Hill Audio, has penned an exclusive piece for PSNEurope detailing his own experiences of dealing with counterfeit fraudsters and the threat they continue to pose to the pro audio market…
Back in April last year, a fairly normal team meeting was drawing to a close, when I asked, ‘So, is there anything else?’ ’Well,’ said our MD, ‘there is this…’ And then he showed me an email exchange that has threatened to crush us ever since. The first email had been sent by one of our customers to their own contacts, objecting to having received an invitation from a Chinese outfit ‘to see the latest Hill Audio Multimix’ at a major international trade show. The second email was a response from the Chinese outfit, stating that they owned the ‘Hill Brand’, and threatening to sue our customer if he continued to suggest otherwise.
At first, I was just angry (after all, hanging proudly on the wall behind me was an original Hill Multimix), and I simply sent a couple of firm emails to the trade show and the Chinese outfit, pointing out that I owned the Hill Brand, and that the Chinese offer was fake.
That’s when things became distressingly surreal. The Chinese outfit replied that they had acquired the Hill Brand from ‘the lawful owner’, and the show organisers said that they had checked the trademark registry – and that it was I who was the imposter.
For the last 40 years, I had always been ‘Malcolm Hill from Hill Audio’, with tens of thousands of products gigging away around the world, hundreds of ‘name’ bands having used my systems. How come I had ceased to exist? The answer is the internet.
Hill has a huge profile on the internet; hundreds of posts and videos, relating to the more famous products, from significant events such as Live Aid, magazine articles, etc., etc., and, a highly active second-user market on eBay.
But, what I discovered was that if you just search for ‘Hill Audio’, as I did, first up, top of the search, is the website of the Chinese outfit. And what a website I found! The British flag, the genuine Hill Audio logo, a whole page celebrating our 40 year history, dozens of photographs of our famous products, an archive of original brochures and owner’s manuals, altogether making an excellent marketing job. But as for current products for sale, the website directs you to products sold by the fake Chinese outfit, described as ‘true descendants of the original’.
‘They can’t do that!’ I hear you cry. ‘Put your lawyer on to them.’
I started phoning around people I know in the industry to have a good moan, only to be met with, ‘Oh, you too then’. Apparently, I wasn’t enjoying particularly special treatment, everybody seemed to have a similar tale to tell.
A major problem seems to stem from when the Trademark registration process went from paper to online around 2005. In the days of paper, the registration authorities used to take their responsibilities of authenticating applications seriously, and the application required a signed declaration of truth. Nowadays, unfortunately, no checks are made as to the true ownership of a trademark.
I quote the EU Intellectual Property Office: “It is the responsibility of the PROPRIETOR of the earlier right to be vigilant and make sure that no one tries to register identical or similar trademarks or designs. The PROPRIETOR of a trade mark or a design is SOLELY RESPONSIBLE for enforcing their IP rights and taking action to prevent any third party from making use of their IP rights without their permission.” In other words, ‘Don’t look to us mate, we are only the European Registration Authority’.
I quote again, this time the United Nations – TM5 project 2017: “The issue of 'bad-faith trademark filings' is a common problem. 'Bad faith filings' could refer, for example, to trademark filings by third parties to register identical or similar trademarks of others in order to take advantage of the fact that the genuine trademark owners have not registered them.” In other words, ‘Don’t look to us mate, we're only the United Nations'.
One of our suppliers told me, "Wake up to the 21st Century Malcolm. You need a ‘trademark watch’ company, at about £20K a year, and then another £20k or so for each trademark challenge."
So here is the problem: it costs five minutes on a laptop and £500 to get an EU trademark, but it costs hundreds of hours and thousands of pounds to challenge one. So, what did the Chinese outfit do when we challenged its Hill Audio trademark registration? They simply registered a duplicate one.
Following publication of the article “Hill Audio founder Malcolm Hill talks counterfeit culture after Chinese factory raid” we have been contacted by the company referred to by Malcolm Hill in that article as ‘counterfeiters’. In the interests of balance we have agreed to publish the following statement by them. For avoidance of doubt, we endorse neither this statement nor the article written by Mr Hill – both are the personal viewpoints of their respective authors.
“This article contains certain misrepresentations of legal facts and true circumstances, which need to be corrected as follows: Rights into a brand or trademark evolve from one (or the combination of) the following factors:
1) Registration of the trademark with authorities applicable to the territory – this will however only grant rights in the territory where registered, for the time the registration is active.
2) Commercial use of a trademark, resulting in what is sometimes called “goodwill” – this will however only grant rights to the person/entity using the trade mark commercially, in the territory it was evidently used, and such rights would cease to exist after 5 years of continued non-use. Further the goodwill definition only exists in certain legal systems, like in the UK or other “Commonwealth” territories. In many other territories, only a trademark registration grants rights into a trade mark. The statements made in this article hence ignore or falsify the following facts:a) The author of the article has never registered the Hill Audio trademark in any territory prior to attempting to do so in 2018 for the UK only.b) The author of the article has personally not traded under the Hill Audio name since the 1980s – the company Hill Audio Ltd., which went out of business in 1992, was a company he held no share in and was the last commercial user of the Hill Audio trade name. The legal successor to this company, an entity named Atapco Security and Communications Limited, declared publicly to cease the use of the trade name by April 1994, which evidently removed the trade name from any commercial use since such date. Any remaining goodwill into the trade name would have hence been in the name of these entities and not in the name of the author, and would have ceased by 1997 or latest April 1999 by non-use.c) Goodwill in favour of any previous commercial user of a trade name does not survive beyond the 5-year threshold by 2 hand products traded or the general public’s continuous use of a product carrying such trade name.d) The author of the article was aware of the current owner of the trade mark since 2007, and by evidence of witnesses has been in touch with the current licensee of the trade mark through his son since 2013. The casual occurrence of awareness only in April 2018 is untrue.e) The current owner owns the Hill Audio trademark in Europe, the USA and China since 2008.”