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Brompton Wins IP Case

Published June 23, 2010

BRENTFORD, UK (BRAIN)—Brompton Bicycle has won a ruling that states Taiwan manufacturer Grace Gallant has infringed on the UK-based folding bike company’s intellectual property rights.

The decision that involved the “Oxford” bicycle was handed down at Commercial Court No. 5 in Madrid, Spain recently.

Brompton entered into a joint venture arrangement with a Taiwanese company called Eurotai in 1992 to meet demand for Brompton bikes from countries like Japan.

“Taiwanese production offered us the chance to raise overall output and supply Asian customers in an environmentally-friendly way,” said Emerson Roberts, sales and marketing director for Brompton Bicycle. “The joint venture was wound up after 10 years of disappointing production in 2002. The joint venture never stayed true to our insistence on quality, forever looking for shortcuts to maximize profits; it was a failure all round and a termination agreement was signed in which they undertook to return all drawings and tooling.”

Eurotai and its subsidiary, Neobike, did not return all the tooling and it soon became clear that they had also made copies of the drawings, according to Roberts. “They used these to produce copies of our bikes which they exhibited at Eurobike in 2003 and began importing into the Netherlands in 2004 under the brand Scoop,” Roberts said.

Aware that Brompton was “onto them,” Neobike sold off its interests in the copy bikes to Grace Gallant, which began featuring them on its Web site from at least 2006, perhaps earlier. “It remains unclear exactly what the relationship between these companies is though there is no doubt that the bikes were the same,” Roberts said. “As is common in Taiwan, it is likely that extensive family networks oversaw the transfer to Grace Gallant of the rights to manufacture the copy Bromptons.”

The Court has ordered an injunction of the importation, distribution and sales of these bicycles. The judgment is consistent with decisions in other countries, notably Belgium and the Netherlands, where Brompton Bicycle has won similar rulings in respect to its intellectual property rights.

Brompton Bicycle North American agent Ed Rae said it’s challenging for a smaller company like Brompton in managing all this IP litigation because of the cost involved. “The danger of letting it go is it can get worse and they can use it as a precedent saying that you didn’t pursue it, so you almost have to share a record of diligence, otherwise you’re open to the idea that you’re not being uniform or consistent in your demands,” Rae said.

—Jason Norman

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