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The Risk Of Being Innovative

Counterfeit Products Affect Gases and Welding Industry

Innovation is a cornerstone of GAWDA members’ businesses, both distributors and suppliers. That’s one of the reasons last week’s article about counterfeiting on Welding & Gases Today Online is so startling. But counterfeiting, by its true definition—i.e., reproducing a product and marketing it under the manufacturer’s name—is only part of the problem. Along with actual counterfeiting, manufacturers have dealt with related issues like copyright infringement, including unauthorized use of company designs (e.g. welding helmet designs), company trademarks and more.

In talking with suppliers who have dealt with these issues, it’s evident that counterfeiters are rarely brought to justice. First, the manufacturers have to find the culprits (not an easy task), and then work within the legal systems of whatever country the issues occur in. If the manufacturer is lucky enough to a) spot the counterfeit, b) trace it back to its maker and c) get the justice system to take notice, the process can still take years, as Uniweld found out in winning its 10-year court battle with one importer.

With varying degrees of copying as noted above, where do we draw the line? What if instead of a product, another company steals an innovative idea—or even an entire business model? Inc. Magazine recently dealt with this issue in its article, “Lessons From the World’s Most Ruthless Competitor,” an article about business copycats. The article focuses on a group of businesses that specialize in copying successful Internet startups.

The copycats are unabashed, even proud of their own opportunistic moves. One of these businessman, Magnus Resch, managing partner at German company Springstar, told Inc. Magazine, “What we’re doing here is entrepreneurship lite.” He adds, “We are scared of doing something completely new. That’s why we are so good at copying.”

The companies targeted by copycats are often small startups who had a unique idea for a website. Once these businesses become successful or attract large investors, the copycats build their knock-off businesses in a fraction of the time that it took to build the original brands, and working with larger budgets, too.

In reality, the issues the startups face are similar to those facing manufacturers in the gases and welding industry. Many hours and hard-earned dollars are spent on developing and perfecting a product, only to have that product unceremoniously copied. ArcOne President Ed Martin asks, “How do you put a price on years of development?” In both instances, there is very often little recourse that can be taken against the copiers.

When I think of “entrepreneurs,” I think of the men and women of GAWDA who have worked hard to build strong companies. For Resch to suggest that copying another business is entrepreneurship (even if it is the “lite” version), is a little hard to digest.

As the title of this post suggests, it seems that being innovative comes with the risk of being ripped off. So what do you think? Is it worth the risk?

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