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World Hovercraft Organization > Counterfeit Hovercraft

23 June 2008

Autoritá Garante Della Concorrenza e Del Mercato
Piazza G. Verdi, 6 / A
00198 Rome, Italy

COMPLAINT: UNFAIR COMMERCIAL PRACTICES; MISLEADING AND COMPARATIVE ADVERTISING

I submit this complaint on behalf of Neoteric Hovercraft, Inc., a company founded in 1975 with headquarters in the United States for which I am President and founder. Neoteric was the first light hovercraft manufacturer in the world. Numerous unfair trade practices have been committed against my company by a competitor, Hi Tech International Srl (HTI) of Gorgonzola, Italy, and its chief executive officer, Matteo Passoni, who is a former Neoteric Hovercraft dealer.

As detailed in the enclosed documentation, the offenses committed by HTI include:

  • Unlawful misleading and comparative advertising; false and misleading representations of fact
  • Misleading commercial practices
  • Plagiarism; intellectual property/copyright infringement
  • Trade disparagement; libel
  • Economic espionage
  • Industrial espionage / theft of technology and trade secrets: HTI duplicated the Neoteric hovercraft and its patented components through an illegal process known as “splash molding”, then made simple, minor changes and produced their own tooling to market this product fraudulently as their own design. Please note: all technical diagrams of HTI hovercraft that appear on their web site are, in fact, Neoteric technical diagrams and were plagiarized from the Neoteric web site.

Neoteric Hovercraft, Inc. has informed, or is in the process of informing, appropriate United States agencies of HTI's offenses, including the U.S. Federal Bureau of Investigation (FBI); the U.S. Central Intelligence Agency (CIA); the U.S. Department of Commerce; and the Indiana Department of Commerce. We now petition the Autoritá Garante Della Concorrenza e Del Mercato to take action against HTI.

Prior to the formation of his company, in September 2001 Matteo Passoni contacted Neoteric Hovercraft, Inc. and became a Neoteric Hovercraft Dealer in October 2001. Mr. Passoni immediately began to insist that we provide to him a duplicate of our www.NeotericHovercraft.com web site, which was established in January 1999. We gave him permission to link to our site but, as shown in the attached documentation, we repeatedly explained that he was not allowed to duplicate our copyrighted web site. However, he ignored our instructions and in 2003 he launched the HTI web site, www.hovercraft.it, as a direct copy of www.NeotericHovercraft.com.

Please find enclosed full documentation of this unlawful misleading/comparative advertising; plagiarism; intellectual property/copyright infringement; and false, misleading representations of fact in both the HTI web site's original 2003 appearance and also as it appears today.

In addition, HTI’s primary advertising tool - their company brochure - available on their web site at http://hovercraft.it/adm/repository/file/file45.pdf, is a word-for-word duplication of the following page on our Neoteric site: http://www.neoterichovercraft.com/general_info/hovercraft_principle.htm.

Further, HTI is representing itself as the “Original Light Hovercraft Manufacturer” when, in fact, Neoteric is the world’s original light hovercraft manufacturer and this plagiarized phrase is a part of our trademarked business name.

As the enclosed documentation attests, in 2003, Matteo Passoni began to insist that I provide to him designs, diagrams, building instructions and various parts of our patented hovercraft designs and technical innovations, including actual fiberglass hovercraft bodies and our patented reverse thrust buckets. In short time, and regardless of many warnings that it was unlawful to do so, HTI began manufacturing copies of patented Neoteric Hovercraft and marketing them in Italy and throughout the world as HTI hovercraft when, in fact, they are the product of theft of technology and trade secrets, as well as industrial and economic espionage. This is in clear violation of the U.S. Economic Espionage Act of 1996, which “applies to offenders who are foreign persons.” As you will read in the enclosed material, Mr. Passoni admitted such in his 21 April 2006 email to me, in which he stated, “You are right when you say that HTI beginning the development of its own hovercrafts from your craft …”

Please also note in the enclosed documentation that HTI has committed numerous acts of trade disparagement and libel against Neoteric in its advertising. These include viral email propaganda campaigns containing a defaced Neoteric logo and comments such as “Please prevent toys purchase instead of professional craft …” and notices on the HTI web site including a defaced Neoteric logo and false claims stating that Neoteric Hovercraft “explode, overheat, are dangerous” and are “Not to be used in rescue or serious duty.” Neoteric Hovercraft have been in use in more than 50 nations for decades without such incidents and are, in fact, utilized by the U.S. Department of Homeland Security and U.S. Border Patrol.

In spite of such acts of trade disparagement by HTI, the company had the audacity to file a lawsuit against Neoteric last year for defamation of character, demanding a $20,000 USD settlement! When we enlisted legal assistance, this unfounded lawsuit was subsequently dropped.

As you can see, HTI has directly reproduced much of our original web site for use on their web site and in their other advertising materials, and this former Neoteric Dealer has now positioned itself as a Neoteric competitor, manufacturing and selling unauthorized reproductions of our product. These unlawful and misleading reproductions have created serious confusion within the worldwide hovercraft customer base. HTI’s theft of our patented product line; web site; and trademarked, copyrighted advertising material have caused significant damage to our company in the commercial sphere and is damaging our international reputation.

We petition the Authority to take action against HTI for this deliberate creation of confusion in our customer base due to their reproduction of our product and published materials. We feel this action is well supported under Section 23 of the Legislative Decree No. 146 of 2 August 2007 which states that “Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not” is considered misleading in all circumstances.

HTI has committed misleading actions, as well, detailed by Section 21 of the same legislative decree: “any marketing of a product, including comparative advertising, which creates confusion with any products, trademarks, trade names or other distinguishing marks of a competitor” may cause confusion for the average customer. In this case, “confusion for the average customer” is more serious than usual, because HTI’s primary customers are public rescue agencies.

The offenses described in this letter are not an isolated incident. On 20 April 2007, Autoritá Garante Della Concorrenza e Del Mercato received a request for intervention by another competitor of HTI, Phoenix Hovercraft of Italy, that similar offenses had been committed against Phoenix by HTI’s web site. The Authority deemed that the material in question “illustrates a case of unlawful comparative advertising”; you imposed an administrative penalty upon HTI and the offending material was removed from their web site. I have attached to this letter your decision on the Phoenix case.

The offenses committed by HTI against Neoteric Hovercraft, Inc. are of greater magnitude than those committed against Phoenix Hovercraft, and are of much longer duration. HTI’s actions constitute not only unlawful misleading advertising but identity theft, and HTI has stolen 48 years of our technology and is presenting that technology as its own. As one example, HTI has applied for an Italian patent on our hovercraft reverse thrust system, which was patented worldwide in the United States by Neoteric Hovercraft in 1973. In all HTI’s advertising, the company claims they have “patented technology” - clearly a false and misleading statement.

More seriously, as evidenced by the numerous contacts we have received, there is wide concern within the worldwide hovercraft manufacturing industry that HTI may also be harming consumer health and safety by fraudulently selling imitation rescue vehicles with no track record, while representing them as having the decades long, tested and proven history of Neoteric Hovercraft. Most recently HTI, through uncertain methods, won a tender at a higher price against three bidding companies who have been in business decades longer than HTI, and HTI has now sold two rescue hovercraft to the Gloucestershire Fire and Rescue Service in the UK. The Gloucestershire rescue agency, like so many other HTI customers, is not only receiving stolen property, it is purchasing public rescue vehicles with questionable safety and uncertain lasting value that may actually endanger the public rather than protect it.

We have great concern that HTI hovercraft may also endanger the lives of rescuers. Strong evidence is offered to substantiate that concern: even after committing all the offenses outlined in this complaint, HTI offered me $20,000 USD to serve as technical consultant to solve the serious problems they are experiencing with their imitation Neoteric Hovercraft - grave problems such as exploding fans. A rescue vehicle that may explode during rescue operations, putting the lives of both victims and rescuers at risk, should not be allowed on the market.

We believe you will agree that there exists a well-founded reason for the Authority to not only impose an administrative penalty upon HTI but - for the safety of the public and the safety of rescue personnel - to order suspension of the marketing of Hi Tech International S.r.l. hovercraft as well.

I have provided my full contact information below. My company and I are eager to provide any additional materials or assistance that you may need, and we welcome your advice in regard to other agencies in Italy to which it would be appropriate for us to report HTI’s offenses. Permitting an Italian company to use such unlawful business practices to market stolen products of questionable safety is, at the very least, likely to tarnish the reputation of Italian-made products in general.

I thank you kindly for your thorough investigation into this serious situation.

Best Regards,

Chris Fitzgerald
Chris Fitzgerald
President
Neoteric Hovercraft, Inc.
1649 Tippecanoe Street
Terre Haute, Indiana USA
47807-2394

Email: hovermail@neoterichovercraft.com
Telephone: 812-234-1120 or 800-285-3761
Fax: 812-234-3217

All Material © 2003-2004 World Hovercraft Organization