Furor Arises Over Counterfeit Oyaide AC Plugs

In the early morning hours of December 11, Joseph Cohen of the Lotus Group, the exclusive distributor of Oyaide products in North America, sent out a "Lotus Group News Flash!" The e-mail, dated December 10, declared:

"It has come to our attention that PartsconneXion.com of Canada has been advertising counterfeit Oyaide plugs as being genuine Oyaide plugs on their website. . . . Further they are advertising these counterfeit items at prices that match the price of genuine Oyaide parts. It has also come to our attention that they have begun shipping these products to unsuspecting customers. We have an email from one of these customers who suspected (rightly) that he had received bogus product."

The e-mail goes on to list a link to Oyaide's website for photos of the counterfeit product, and details about how to identify counterfeit products.

Cohen further asserted that the counterfeits "are made from entirely inferior materials in China—not Japan. . . . Since they are counterfeits, they have not been tested or rated by any agency and present a genuine liability to the seller and a risk to the end user.

"We take assaults on the integrity of our products very seriously, and we feel the very best way to protect them is to keep you, our valued customers, well informed."

Even before sending his e-mail, Cohen posted a notice on the Tweaker's Asylum page of AudioAsylum.com. "It saddens me to report that Partsconnexion.com is advertising counterfeit Oyaide plugs on their website," he wrote. "These parts are listed at regular Oyaide prices. We also know for a fact that they have begun to ship these bogus products.

"It is my responsibility as the distributor of Oyaide products to keep the public informed when these types of transgressions occur. Up until now, sellers of counterfeit products have been small retailers. Oyaide keeps a list of 'unprincipled dealers' on their website. Now it seems that Partsconnexion.com will be added to that list."

Soon after a second thread on the topic began on Audio Asylum's General page, Audio Asylum moderator "The Bored" replaced it with the following: "On the advice of our General Counsel, we removed the thread regarding the sale of counterfeit Oyaide products. There are too many unanswered questions to allow it [to] stay, at this point. The original post and all follow-ups, including screen shots have been saved, for future use, if needed."

Reached by phone at his office in northern California, Cohen provided his side of the story:

"Chris Johnson, owner of Parts ConneXion, approached me well over a year ago to become an Oyaide dealer, and signed our e-commerce agreement agreeing to advertise at retail price only. But even though he kept announcing in his newsletter and on his website that Oyaide was coming soon, he never bought any Oyaide product from us.

"I noted something was amiss in Chris's sale announcement in his most recent newsletter. Oyaide products were specifically listed. Because I'd never received an order from him, my thinking was that he was going to place his first order after he received orders from customers. I thus contacted him by e-mail and said, 'Per our agreement, these are not allowed to go on sale.'

"Chris responded by telling me that his sale announcement would be amended. He then sent customers an announcement that said something to the effect that www.partsconnexion.com is not allowed to advertise that Oyaide is part of the sale. After that, it came to my attention that the Oyaide products in the pictures on their website were clearly counterfeit. I wrote Chris a letter, and also phoned on December 9. After I did not receive a reply, Oyaide received a letter from a customer who thought Chris had sold him bogus goods. We knew instantly that they were bogus by the description."

Cohen accused Johnson of negotiating with him in bad faith while arranging to get parts from another source. "He never asked me or indicated that he was getting a better price somewhere else," he said by phone. "I was never given the opportunity to warn him that he might be getting counterfeit product if he didn't go through legitimate channels. So the onus is on him, not me. He has no leg to stand on."

Cohen emphasized that the counterfeit products were AC products that "carry the greatest risk. From the moment I learned they were being shipped, I acted, because it was my responsibility. As a matter of fact, I have an e-mail from Johnson dated November 25, after partsconnexion.com had put our items on sale when it was expressly forbidden to do so, that distinctly indicates that he's going to start buying from me soon.

"I think I have every right in the world to be acting on behalf of Oyaide to protect its reputation, and to be pissed off at being treated like this. While Chris has taken the product off his website and is offering refunds, he cannot undo the fact that he was never honest with me and engaged in bad-faith negotiation. I don't know any other way to look at it."

When I reached Parts ConneXion by phone, I was told that Johnson was home nursing a wicked cold. Reaching Johnson by e-mail, I learned that he had not been in the office when Cohen attempted to reach him on November 9. He said he was unaware that the parts were counterfeit until Cohen posted on Audio Asylum and sent out his newsflash.

Chris Johnson has issued the following statement for publication:

"pcX [Parts ConneXion] has been considering the OYAIDE line for some time. Events [of] the past two years (the closure of Black-gate, and the large inventory commitment it required), caused us to delay many of our new line acquisitions. While we did sign an agreement with Lotus Group (some 18 to 24 months ago), we had yet to purchase OYAIDE product from them.

"In the meantime (recently), we did receive approximately 50 pcs of OYAIDE product in a 'one time/job lot' purchase (containing many other items and brands) made with a 'supposedly' reputable Japanese vendor. We paid close to LOTUS's wholesale price, thus never thought they were anything but legit. . . . [M]oreover, having never received 'authourized' parts before, we had nothing compare to . . . and thus, did not suspect anything was wrong.

"It was our intention to make these available for sale, and test our market for the OYAIDE offerings (without having to make a large financial commitment yet). . . . [B]ased on the sales rate and feedback, we'd begin re-stocking thru Lotus Group, and widen our range of OYAIDE offerings as well.

"Unfortunately, pcX was just made aware that some of its recently acquired OYAIDE stock (purchased from a previously reliable Japanese 3rd party), contained counterfeit OYAIDE parts.

"• pcX was unaware that OYAIDE had a counterfeit problem . . . or, that our OYAIDE stock was counterfeit
"• pcX has removed this OYAIDE product from its shelves (it's no longer for sale)
"• pcX has removed this OYAIDE product from both its newsletter and website, effective immediately
"• pcX will be contacting any and all customers who bought any of this stock, to offer full refunds or exchanges immediately (over the last 3 weeks—the period they were on sale for).

"LOTUS informed us by e-mail the afternoon of the 9th. . . . [H]owever, as I was not back in the office until late on the 10th, so my first opportunity to respond came AFTER the Lotus Group made their unilateral announcement—this morning (11th). The first opportunity given to us to remedy this situation, we did . . . and we did so IMMEDIATELY!

"We apologize for this unfortunate situation. . . . [I]n the end, it will be pcX (not its customers) who will suffer financially from being defrauded. pcX has excellent relationships with the over 100 vendors that supply us. . . . [W]e DO NOT negotiate in bad faith. . . . nor do any of these vendors have remotely similar complaints."