On Wednesday, Congressman Peter Roskam (R-Wheaton) highlighted Fellowes Inc. and the intellectual property manipulation they're facing to U.S. Trade Representative Ron Kirk. Roskam's comments standing up for Fellowes Inc. came at a Ways & Means Committee hearing on trade -- just days after he and other members of the Illinois delegation sent a letter to Chinese Ambassador Zhang Yesui, urging his government to intervene.
Fellowes Inc., a leading manufacturer employing 575 people in Itasca, Il, is in an ongoing dispute with their Chinese joint venture partner Shinri Machinery Co., Ltd.
They are the victim of what is now a common practice by Chinese joint venture companies: stealing the intellectual property rights of American companies who have invested time, energy, and money in building up a manufacturing operation in China.
Roskam's Excerpted remarks from the Ways & Means Committee hearing:
"A corporation in my district, Fellowes Manufacturing, is involved in - essentially - a nightmare scenario with a joint venture that has gone south, and they have not been able to get the legal remedies that they deserve. I think it's a very, very serious example of manipulations on the part of some in China that are taking advantage of an incredibly significant manufacturer in the Chicago area."
Following the hearing, James Fellowes, CEO of Fellowes Inc. said this, "On behalf of Fellowes and our employees around the world, I want to thank Congressman Roskam for his continuing support of Fellowes in this very challenging matter, including his statement in today's hearing held by the House Ways and Means Committee. We appreciate the strong support of the Illinois' congressional delegation to protect the rights of American companies like Fellowes doing business in China. We look forward to working with U.S. and Chinese officials to help achieve a reasonable resolution in this matter as swiftly as possible."
· In 2006, Fellowes (Itasca-based) entered into a Joint Venture (JV) with a Chinese company, Shinri Machinery Co., Ltd., from Changzou, Jiangsu Province. For three years the JV manufactured and shipped Fellowes products.
· After a change in leadership of Shinri in 2009, the JV stopped the flow of shipments of Fellowes Inc. products, refused to allow Fellowes Inc. employees in the facility, and locked down all access to physical and intellectual property in the JV.
· Because the JV could not ship products, they were sued by vendors who they were unable to pay. These vendors filed a lawsuit against the JV for non-payment. Fellowes Inc. is not being allowed to participate in the lawsuit, and have been informed that the most likely outcome is the auction of all of the JV's assets.
· Shinri, the other half of the JV, is positioning themselves to buy all of the assets of the JV at auction. Shinri would then own all of Fellowes property, which they would then sell on the open market. Fellowes would still be responsible for warranty protections on products that have been sitting in shipping containers for years.