China Exports Crap, US Firm Surprised
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Royal Marketing sued China Lucky for negligent misrepresentation, breach of warranty and breach of the implied covenant of good faith and fair dealing—seeking an award of over $135 million.
In March, China Lucky got lucky. Royal Marketing won its lawsuit, but a California jury awarded it only $3 million. And, so far, that’s $3 million more than China Lucky has paid.
Ourian’s 27-year-old business is now on the ropes—its reputation damaged, its staff shrunk from 26 employees to five.
Meanwhile, China Lucky, which is nearly 50 percent owned by the Chinese government, continues to thrive.
The pattern for Chinese companies when dealing with foreign companies is to provide the best product for the best price, and then after the contract is signed cut corners and export garbage, and stealing IP like there is no punishment because (ahem) there is in fact no punishment. Royal Marketing Inc found this out first hand, but they are not the first foreign company to do so. As I said, it’s a pattern and RMI should have recognized it. The CEO should have gone to Target and 1. tried to buy something NOT made in China then 2. bought $1000 stuff and see what lasted longer than 3 months.
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