Legal action against manufacturers and distributors of counterfeit product

Hypertherm is pleased to report a significant takedown of a major plasma consumables counterfeiting ring located in Changzhou China. For more than a year, Hypertherm’s private investigators and local Chinese Authorities have studied and monitored the operations of these counterfeiters using undercover detectives, trap purchases, vehicle surveillance, wire taps, and bank account inquiries. Having completed our investigation of this counterfeiting ring, collecting the necessary evidence and locating the hidden facilities, we made the decision to take action against this counterfeiting ring. In the last weeks of 2018 the Chinese Authorities raided four Changzhou manufacturing and distributor facilities.

The results were staggering. The raid netted more than $80,000 USD worth of counterfeit consumables and over 32,000 counterfeit labels; representing more than $380,000 USD in potential fake Hypertherm products. As counterfeiters are widely known to only make a limited number of counterfeit products at one time, so as to minimize losses from a potential raid, these numbers only represent a fraction of the larger Chinese counterfeit business. In fact, at just one facility, the Chinese Authorities seized more than 730 record books documenting the illegal transactions, business partners, and customers of this company. The raided factories housed more than 64 CNC machines, 3 laser marking machines, and multiple counterfeit label printers. Most importantly, five directors of these companies were arrested and are facing prison time for counterfeiting crimes.

The police further discovered that these factories were not only producing direct counterfeit Hypertherm parts but were also the source of low-quality aftermarket consumables sold under the “Quality Plasma Consumables,” “Hangepeijian,” and “Huqeltnelm” brands. These parts have been found in markets all over the world, violating multiple global Hypertherm patents.

              

The conditions of the manufacturing facilities operated by this counterfeiting ring were nothing short of deplorable; crude assembly equipment heaped on cluttered tables; exposed wires strung all along walls by nails; bins of consumables and piles of copper scrap strewn about the floors; and workers layered with coats to protect them against the cold unheated facilities. These illicit operations stand a world apart from the state-of-the-art manufacturing facilities that are used to produce genuine Hypertherm consumables in the United States. Hypertherm currently is working with the Chinese Authorities to process the mountains of evidence collected which identify the customers and suppliers of these counterfeit operations. This information will assist Hypertherm and the Chinese Authorities in the next round of anti-counterfeiting activities.

                                   
Hypertherm’s Operation                                                                      Counterfeit Operation

We recognize the difficulty for you our valued Partners in competing with what appear to be genuine Hypertherm consumables being offered at a fraction of retail prices. Such fake parts often cause poor system operation and bad cut quality resulting in unnecessary service calls and frustrated end users. Hypertherm is committed to this ongoing fight. While this recent raid is a significant blow to global counterfeiting of Hypertherm products, the battle is far from over. Hypertherm currently has active anti-counterfeiting investigations ongoing in Russia, India, Vietnam, China, and other countries.

To ensure that your customers do not fall victim to counterfeiting schemes, Hypertherm will continue to recommend that customers only buy parts from you our authorized Partners. End users must exercise caution when coming across abnormally low prices for “genuine” consumables, especially when purchasing online. If you or your customers identify suspicious activity or suspect that you have purchased a counterfeit product and need help verifying whether your consumables are genuine, please visit https://www.hypertherm.com/customer-support/getting-the-most-from-your-products/counterfeit-consumables to submit a report or contact your local Hypertherm representative.

Hypertherm continues to expand its anti-counterfeiting resources to take the fight directly to the sources. We are committed to protect our brand name and the business of our Partners.