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Alleged Chinese Product Counterfeiter Fights US Extradition Request

The head of a Chinese company accused of product counterfeiting is in a London jail fighting a U.S. extradition request. As VOA's Bill Rodgers reports from Washington, if he is eventually extradited to the United States he would be one of the rare cases of a foreign national being forced to stand trial for an intellectual property offense.

The owner of the Chinese chemical firm Hunan Magic Power Industrial Company, Yuan Hongwei, was arrested September 14 at London's Heathrow airport by British authorities acting on a U.S. extradition request. He was scheduled to appear at a London court Friday for a hearing on his case, but the session was postponed until October 8.

Yuan is accused of violating U.S. trademark laws by producing and selling various chemical products such as adhesives and lubricants under the name of a U.S. company. The American firm, ABRO Industries, says it has lost tens of millions of dollars from the sale of these counterfeit products around the world, because they saw their share of the market taken over by these fake goods.

A district in Louisiana issued a warrant for his arrest in 2006 on two counts of Illegal use of Counterfeit Trademarks. Stan Carpenter, chief of detectives at Livingston parish, says they acted after setting up a sting operation.

CARPENTER: "From what I gather, the majority of the stuff he was selling overseas was sold on the overseas market and through undercover methods we were able to get him to ship stuff here to us, trying to expand his market to come into the United States and not just being in the European market or other places around the world."

RODGERS: "So in effect you conducted a sting?"

CARPENTER: "Yes, sir, basically so. That's pretty much what it was. It was something to get him to send his product over here, because he was trying to get into the U.S. market."

Carpenter said the case was referred to the U.S. Justice Department to seek Yuan's extradition. He said when U.S. federal authorities learned Yuan was traveling to London, they asked British authorities to arrest him.

ABRO Industries, based in South Bend, Indiana, says Hunan Magic has been selling counterfeit products under the ABRO label since at least 2002. The American firm has taken legal action in China and in various countries to stop the practice but it continued. Hunan Magic claimed it had a license in China to sell ABRO products, a claim that proved to be false.

ABRO Vice President Tim Demarais says he is pleased Yuan Hongwei is now under detention in Britain.

"The main thing is the man keeps doing it with impunity and we feel that now that he is in custody of the English authorities and hopefully extradited back to the USA we will secure the justice we've been seeking all along," he said. "We're not asking for anything out of the ordinary, but we did all the right things in China, we trademarked our brand name and for some reason he's been able to operate with impunity selling ABRO products illegally, we feel."

If he is eventually extradited to the United States, Yuan Hongwei will be one of the few foreign nationals to stand trial in an American court for violating intellectual property laws.

In February, a British national who lived in Australia was extradited to the United States and was sentenced to prison in June for copyright infringement. In 2005, a Ukrainian national was convicted of trafficking in counterfeit goods after being extradited to the United States from Thailand in 2004.

Louisiana has one of the toughest penalties in the country for trademark violations. If found guilty, the Hunan Magic owner could be fined three times the gross value of the losses caused to ABRO.