The counterfeit valves quickly failed in service at Chinese power stations, causing serious injuries and damage.

The counterfeiters were arrested by China’s Public Security Bureau (PSB) in late 2009 following in-depth investigations, and placed in custody. The case went to criminal trial in
the Yangzhou Intermediate People’s Court in Jiangsu, China in December 2010, and the prosecution proved the valve products were counterfeit, failed to comply with compulsory national standards and were of poor quality. In addition, the defendants misrepresented their manufacturing location by telling customers they were imported from the UK. The total sales generated from this illegal business operation exceeded $1.7 million.

Yangzhou Yikai Machinery and Engineering Co. Ltd., was found guilty of making and selling substandard goods and engaging in illegal business, and has been ordered to pay a fine of $1 million. Yikai’s manager has been found guilty of the same crimes, sentenced to 15 years six months imprisonment and ordered to pay $200,000.

Shanghai Saimeng Mechatronic Engineering Co. Ltd., has been found guilty of similar crimes and ordered to pay a fine of $77,000. Saimeng’s manager has been found guilty of the crimes of manufacturing and selling substandard goods, engaging in illegal business and counterfeiting trademarks. He has been sentenced to 16 years imprisonment and ordered to pay $200,000. Such high fines and long criminal jail sentences are very rare in China for intellectual property crimes.