ZIPPO II: We continue today featuring excerpts from the April
Forbes article on Zippo’s battle against the counterfeiters in
China …

For a while, the article notes, Zippo Chief Executive Greg Booth
pursued counterfeiters in South America, Europe, Australia and the
Far East. But doing so was too costly for the size of the
company.

“We think we have a billion-dollar brand, but we’re not a
billion-dollar company,” Booth said.

It was then that the company decided it would concentrate its
efforts in tracing the counterfeit loot back to Wenzhou, China,
where 98 percent of the looted lighters are produced.

Zippo’s plan involves working with Chinese officials, but
sometimes the going is slow. Once Zippo’s private eyes identify the
counterfeiters, they contact China’s Administration for Industry
& Commerce (AIC), which then has official power to seize and
destroy the ring.

“They usually have a little ceremony with banners and TV
cameras,” said Zippo general counsel Jeff Duke.

Because the AIC can only levy fines, but can’t start criminal
proceedings, most of the cases don’t make it to court – and most
regulators don’t pass on the information to the police.

One particular case featured in the article took three years to
get to court. It involved a factory manager who was caught with a
booty of 97,000 counterfeit Zippos. The manager finally caved
in.

“We think we know who he was working for,” Duke was quoted as
saying. “Since there was no paper trail, however, there was no way
to nab the culprits.”

The manager, sentenced to six months in jail, was put on
probation instead.

Duke pressed ahead. He “also filed a complaint with the U.S.
International Trade Commission against four Chinese producers in
July for violating a design trademark the company filed in 2002,
covering the rounded corners of the lighter’s body and its arched
flip-top. Most of the high-end lighters made in China violated this
trademark.

“Unlike the Chinese court cases, this case will be heard in the
U.S. If the Chinese manufacturers don’t respond, they can be barred
forever from exporting to the U.S.

“That has the legitimate Chinese manufacturers up in arms.
Meantime, the tide of fakes keeps on sloshing around the world.

” ‘We haven’t folded the tent,’ says Booth, hoping for more help
from Beijing. ‘But if this were to continue, I could see our
business at half the size it is now.’ “