DVTel takes legal action against alleged Chinese counterfeiters

Security solutions manufacturer DVTel announced this week that it is taking legal action against a Chinese firm that they say has been selling counterfeit ioimage products.

According to DVTel Executive Vice President Paul Smith, ioimage entered into a distribution relationship with China-based Bellsent in 2008. In 2009, Smith said that ioimage, which was later purchased by DVTel in March 2010, became suspicious that some of its products were being counterfeited.

"We had to actually get proof of it, so we went out and bought one of the units from a Chinese systems integrator and sure enough, it was from Bellsent," Smith said.

The counterfeit products that DVTel has found on the market are knock-off ioimage encoders. Smith says the company believes some counterfeit ioimage cameras may have also been produced, but they have not been able to confirm it yet. The financial impact of these counterfeit products to DVTel is in the low millions, according to Smith.

DVTel has begun legal proceedings against Bellsent in an Israeli court. Smith said that DVTel will not provide support for any products determined to be counterfeits.

Moving forward, Smith says that the company will probably be more cautious about who it is doing business with in China.

"We will probably do more background checks on the distributors that we use because it’s clearly the individual who owns this company who is the slippery one here," Smith said. “Even with court action, we think that even if he gets shut down, he’ll open up another company with a similar name and he’ll start selling our products and perhaps others that I don’t about on the market."

About nine years ago, Smith there was a product that DVTel had built and wanted to sell through a major Chinese telecommunications firm. During one of his visits to a manufacturer in the country, Smith said he saw an open DVTel network switch in a laboratory surrounded by about a dozen engineers with laptop computers.

"They were going over this product inch-by-inch to basically reverse engineer it," he said. "Somehow in the culture, there is some acceptance of this kind of copying and it’s not seen as taking intellectual property. It’s more seen as finding a cheaper way to make something. We value the person who designed (the product); they value the building of it."