Grow. Promote. Protect. Forum 2026. Panel: What a bloody rip-off

Hosted by the Australian Furnishing Industry Stewardship Council, Australian Furniture Association and RMIT University, and running over February 24 and 25, Grow. Promote. Protect. Forum 2026 built on the momentum of recent Commonwealth and State-funded research projects that have identified key recommendations for industry growth.

This episode is from a day one panel session, including guests Simon Dorries, CEO at Responsible Wood; Robert (Bob) Panitzki, Business Development Manager  at Furntech-AFRDI; Mark Lazarus, Director at Lazarus Legal; and Amma Boakye, Practice Project Officer at IP Australia.  

The moderator is Patrizia Torelli, CEO, The Australian Furniture Association  

Episode guide

0:25 – Introduction to panellists. 

5:20 – The first things businesses should do to protect their intellectual property. 

6:29 – Types of different IP. 

8:08 – Some of what’s patentable, copyright-protectable, trademarked. And why you might not need all of these. 

9:33 – The role of IP Australia and some of the tools its website offers. 

10:40 – A recap of patents, trademarks and design patents. 

11:50 – Plant breeders’ rights. 

12:55 – Responsible Wood Australia, Standards Australia, and these labels being used in a misleading way. 

13:43 – When deception on standards has fatal results. 

15:05 – Where certification chain of custody comes in. 

16:50 – Countering greenwashing that wrongly uses RWA certification. 

18:10 – The types of certifications AFRDI issues and how it deals with forgeries. 

19:25 – The example of a plastic monoblock chair. 

20:50 – Clients claiming compliance to the full standard when only being part-way there. 

24:10 – Checking that what’s sourced is legitimate. 

25:14 – Unfortunately we live in a world where there’s not a lot of enforcement. 

26:40 – How the AFA can go into bat for those that have been unfairly treated during a procurement process. 

27:30 – The imported knockoff chairs that removed the toes of a cafe-goer in Queensland. 

29:02 – Why it would be difficult to take action against a non-compliant overseas manufacturer in the above case. 

34:17 – A tolix bar stool copy was identical to what it was based on, but made with thinner steel and featuring a dangerous shear point. “But outside of that you probably couldn’t tell the difference.” 

36:02 – Voluntary standards and ones that are policed. 

36:50 – A question from the floor about standards discussions across countries. 

37:52 – Alignment across countries on intellectual property. 

39:18 – A question from the floor on shifting liability to a supplier, and why a well-drafted indemnity provision is definitely enforceable. 

42:40 – A question from the floor about tools to check on suppliers’ certification credentials. 

44:50 – A question from the floor on the economic conditions in China and how they’re playing out for importers. 

47:50 – The collapse of the Chinese domestic construction market. Timber and other products have flooded the market as a result. 

Transcript

SPEAKER_02 0:00

We've talked to a few Australian manufacturers and we hear often about the things that are challenging for them and their intellectual property is always high on the list. We've even had companies whose products have been ripped off to the extent where they've lost millions of dollars in sales. I'll give an example as we have these discussions now, but I'd like to introduce our panelists and I will begin with Mr. Simon Dorries. Simon's the chief executive officer at Responsible Wood. Responsible Wood is one of those timber accreditation organisations. So PEFC Australia is Responsible Wood. And they're an accredited standards development organisations by Standards Australia, and they write, maintain, and update Australian standards which underpin the responsible wood certification system. These standards include AS4707. Oh, I'm not going to read out the numbers. No, I'm not reading out the numbers. Chain of custody for forest products and sustainable forest management. In fact, we've been very privileged to be on the board and on technical advisory committees for responsible wood. So we're very, very fond of this organization. Simon holds a Bachelor of Applied Science and has worked in the forest and wood products industry for over 40 years. You don't look that old. Forest and wood products industry for over 40 years. Sorry. Commencing in 1985 as a cadet scientist. Oh, that's impressive. While undertaking a science degree through part-time study. Simon has significant experience in developing product certification systems, compliance testing and assessment, delivering education and training across the wood product sector, product development and standards development. In addition to this role, a responsible wood, Simon is currently chair of Standards Australia Committee, TM011. Again with the numbers, Simon. Engineered Wood Products. Please welcome Simon. Arma, Arma Boyaki from IP Australia. Arma is a designs examiner and quality and practice project officer at IP Australia. Arma has over four years' experience across design examination, quality assurance. She joined IP Australia in 2022 after working as a graduate lawyer across construction and environmental law. Roberto Bob Panitsky. Bob's a from Afarty, which is the Australian Furnishing Research. What's the D for Bob? I can't never remember. Development Institute. Yes. Bob's a graduate in chemistry from the University of Tasmania in 1970 and later earned a diploma of secondary metallurgy. Wow. And completed the program for management development at UTAS. He spent 32 years at ACL, Bering Company, that's the name of the company, rising from technical and manufacturing roles to GM, overseeing 400 plus staff and a $50 million turnover. In 2003, he joined Ferntech Afati as the institute manager and became CEO in 2005 and 2019 before moving to a part-time business development manager role. Bob's been a council member of Standards Australia since 2007 and chairs technical committees related to every furniture category. And he has served on the NATO Council as Tasmanian representative for a million years as well. Bob and I are old mates, and I love you dearly. Please welcome Bob. And Mark Lazarus, who is going to change your world or rock your world today. Lazarus Legal. So Mark works with founders who are scaling, raising capital or defending what they have built, helping them lock in their IP, protect their leverage, and build companies. He's helped more than 300 businesses secure trademarks so that they truly own what they create. He's advised over 2,000 founders from garage stage to industry leaders. He's worked on capital raises up to 50 million, structuring deals that bring in capital without giving away control. And along the way, he's helped disruptive businesses stay ahead of litigation, IP theft, and regulatory risks before they become existential problems. Why do you use so many big words? Just because you can. In practice, that means that he helps you outthink regulators. Ooh, keeping us out of jail. I love it. And so shifting laws never slow you down, controlling the IP battle before someone else claims your ideas and bulletproofing your company's investors, competitors, and lawsuits cannot take it apart. Welcome, Mark. So I'm not going to use a script because I know you all intimately. Well, not that intimately. I'm going to give you some case studies that I think speaks to the experience that you have and the experiences that we've shared in helping to protect our members from IP theft, plagiarism, forged certificates, all of the things that are so frustrating for a business owner when they've invested so much capital and so much time and resource and love into building their businesses. So, Mark, I'll start with you. What are the first things that a company or a business must do to protect their IP?

SPEAKER_03 5:20

Hello?

SPEAKER_02 5:20

Yep, but gotcha.

SPEAKER_03 5:22

Hi, everyone. Yeah, so just by way of background, I work with a lot of startups, creatives, fast-moving consumer good brands, ran Monster Energy's legal department as in the global energy drink brand for several years. Probably the most litigious company on the planet when it comes to protecting their IP. But now I primarily work with businesses from very infant startup stage all the way to, you know, very established businesses and brands. And I think one of the issues or challenges that I find with business is that when it comes to protecting themselves, it's something that they often neglect and miss because they're so worried about spending money on other ways to build and grow their brand that they forget to protect themselves in the beginning. And there's a lot that can be done very quickly and easily to protect your brand and your concept and your business before the next step, which is litigation. And I was a barrister for several years. So litigation is a big part of what we do, and it's very, very expensive. So to answer your question, there's many things that can be done. There's, you know, there's all types of intellectual property. You've probably heard it before, from general copyright to trademarks to design rights, which Emma will probably have more to discuss than I will, to patents or patents. And then there's actually having the right agreements in place. So I work with a lot of brands, as I said, and you know, with furniture companies as well. So, you know, you're talking about manufacturing, distribution, supply agreements. There's intellectual property provisions around ownership and IP rights that you have in these agreements. If it's a SaaS platform, you're talking about data and use of confidential information. But it's about really getting into the nuts and bolts at the beginning and understanding from the outset who owns that intellectual property. I've got a, I won't say too much because of the building that we're in, but I've got a client meeting on Thursday that's a research facility with a university, and there's issues around ownership of intellectual property, whether it's background intellectual property or intellectual property that is created as part of that project. And unless you really get that clear from the beginning around ownership, then you start to have a lot of issues going forward. And that's when it becomes litigious. So not cutting quarters, making sure you have trademarks in place. I mean, there's a big difference between a trademark, a design is, you know, the actual look and the feel of the product. The trademark is that brand of origin, the patent is the actual invention or how it works. Copyright is the actual copy that goes onto your website or your product. So you could have a bottle, you know, and you can have the look of the bottle that, you know, can that can be protected by design. You can have the pouring mechanism that can be a patent. You can have what's on the label as copyright protection. And then the name of the bottle, Northbrook Natural Australian, could be trademarked. So, you know, one product can have four different types of intellectual property associated with. And that's not to say that you need all of it, because a patents or patents are very, very expensive and often not needed. A lot of the clients that I work with don't have patents. I'm not a patent attorney. It's very, very scientific. But unless you have these in place, coupled with the right type of legal documentation, as I said, manufacturing and distribution of supply agreements with clear intellectual property provisions, eventually you're going to have an issue. And it could be an issue internally with staff or contractors or employees that take intellectual property, or it can be externally where you're contracting with another party, could be a supplier or manufacturer overseas, and it could be in respect to your design of your furniture, or you know, whether there was issues around whether it was exclusive or non-exclusive, and they were producing the similar product or design for another supplier, et cetera. It becomes an absolute mess. And I deal with both sides. You know, I deal with the commercial side protecting, and then I also deal with now fighting. And it's the fighting that comes because they didn't protect themselves in the first place.

SPEAKER_02 9:27

Fantastic. Thanks, Mark. And that might lead us to you, Arma.

SPEAKER_00 9:30

So, what does IP Australia do to support companies that need to understand what IP regulations are and how we are the government agency that provides the intellectual property rights that you have to pay for. So, what IP Australia does, they have multiple different tools available on our website. And depending on which IP right you're going for, there are different tools for those ones. So I know for a fact, if, say, for example, you're going for a patent, there is a tool that you can use to look up IP attorneys, for example, that you might want to consult with because it is a lot more complex and not a lot of people can do it on their own. They also have a trademark lookup, I think it's called like TM checker. So you can check if your trademark potentially already exists or someone has one that looks similar. We also have all of our registers, such as the designs register, which you can look up to see what products people have registered already or had certified. So you make sure that you're not infringing on somebody else's rights as well. We also have our customer service line, so you can call and ask all your general questions. We are an agency though, so we don't do any advice, we only give out information. But the information that we provide is usually quite helpful because a lot of people don't know that much about the intellectual property system. So Mark has pretty much gone through all of them already. But essentially, as he said, patents is more for how a product works. So things like vaccines or engineering machinery, they all deal with that in patents. And then we've got the trademarks, the way you recognize your brands. So it can be a logo, it can be the shape of a product. I think a really good example is Toberone. They have their triangles in their chocolate. That's a trademark. And design patterns, the way something looks, very similar to a shape trademark, but we are only interested in how something looks, like the visual features. So we don't care how it works, we don't care about, I guess, any of the other things that relate to the other intellectual property rights. We just want to know what your product looks like. So to make sure that no one else can infringe on that or that you're not infringing on someone else's. We also do have another intellectual property right most people don't know about, which is our plant breeders' rights. And that is essentially if you will have a new plant species and you want to protect it, you might want to apply for a plant breeder right. So things like the Granny Smith apple. Um, though I always use apples because I think Australia has the best apples, but they are very much part of our rights as well. Maybe not so relevant to you guys as furniture makers, but the other three rights 100% are. So you would probably interact with us in terms of those rights.

SPEAKER_02 12:24

Fantastic. And the only thing I'm disappointed in, Amma, is that you did not bring Toblerone to demonstrate what you were talking about. So that we could very much change. No, no, just Toblerone. Has anyone seen those ads? Thank you. I might come to you, Simon. So responsible wood as a chain of custody standard is very valuable. So valuable, in fact, that on many occasions the brand is ripped off to prove the value of something that isn't responsible wood certified. Can you give us some examples of that and how angry it makes you?

SPEAKER_06 12:58

I'll even go back a bit further and being a bit more fundamental. We're all familiar with Standards Australia. And are you familiar with Australian standards? Australian standards exist to ensure products are safe, fit for purpose, and can be used safely and efficiently. People think that to put an Australian standard on something, it needs to be licensed. Standards Australia does not license the use of Australian standards numbers. Anybody on the planet can put an Australian standard number on something without any checks and balances. It's a voluntary manufacturer's declaration. So why is it important? Stuart took part of my little talk this morning about this afternoon about due diligence. But look, true story, in Sydney, a couple of decades ago, there's a product called Formwork Plywood. It's used by the concrete industry. You make a wooden box basically out of plywood. Into that you pour in 20, 30 ton of concrete and you'll make a concrete structure. There was a product that carried an Australian standard number, did not comply. It had a stress grade of F-17, which is a you know moderately high grade. Concrete was poured into this structure, it failed, it failed structurally, it took out some props, a farm worker was killed, and then the site engineer committed suicide the next day because he'd signed off on that. So the cost of failure, cost of misrepresentation can be death. And I kid you not. So that particular case, that product was imported, the manufacturer just put the Australian standard because that's what the customer wanted without any checks. We got a piece of that material in the lab I was working in. It was so weak we could not even assign a stress grade to it. And that was used structurally and took someone's life. So I suppose when we're talking about misrepresentation, you know, it's across the board. Yeah, so Stuart said before, they've got three people full-time doing due diligence. Why? It's because you have to. And my experience is there's a lot of very good product coming in from overseas. The vast majority is compliant, meets Australian standards, but there's rogues, a smaller number of rogues. But then how do you separate them from the legitimate stuff? That's where certification chain of custody comes in. So you know, we're an accredited standards development organization. There's a good standard AS4707, and it's about chain of custody. And what it allows you to do is track the product from the forest through supply chains, basically to the end user to ensure that it comes from a sustainable source, just putting product quality aside. There's real value in it. So unfortunately, you know, there are supply chains that are quite happy to misrepresent product. It's only a minority, it's not all imported product, but the problem is it still happens. So recently the federal government did some verification of origin testing under the legal logging regulations. I don't think they did a particularly good job of the testing, but that's another story. But anyhow, there was a proportion of product that may not have been what it was claimed to be. And basically what happened is there were sustainability labels on some materials, and those companies were not certified. They had no right to use those labels, and it does happen. What I will say is the certification programs are responding. So responsible wood in our case, we've identified all the potential importers, and we're providing some training and support, helping companies with their due diligence. So we're taking a very proactive response, and there's ways and means of strengthening that. It's possible to identify in the supply chain some players who may not have been doing the right thing, and if they are legitimately certified, they can lose their certification. So yeah, it makes us very unhappy. But what it does show is that even though certification marks were misrepresented, we are taking this very seriously and we're responding and making sure that it doesn't happen again. In an Australian context, our responsible wood logo is what's called a certification trademark. It means that it's registered not only with IP Australia, but also the ACCC, who's done a greenwashing check and some few other things. If they misused our logo or our label in the Australian market, and if they refuse to stop using it, obviously we would go down the legal letter and the enforcement path.

SPEAKER_02 17:15

Just call Mark.

SPEAKER_06 17:16

I will call Mark someone now. I know a lawyer now.

SPEAKER_02 17:18

You know a lawyer now. Bob, you and I have been on the Afarty board together for many, many years. I've recently substituted myself with Marcus, so I'm sure his experience is going to be equally as rewarding as it has been for me. In all those years of working together and sitting around those boardroom meetings, I can't say how many certificates, forged certificates, were put in front of us. However, as the only NATO-approved testing laboratory for furniture in Australia, how big a risk is it when those certificates are misused, particularly on behalf of the members who actually do pay for that certification and testing?

SPEAKER_07 17:59

Well, it is a big problem. We're only a small business, we've only got 12 people, and we're a not for profit, so we don't have an endless bank account to chase these people down. We've got four certification marks all registered with IP, but there's the Blue Tick, which has been around, party blue tick, which has been around since the early 1990s, not long after our formation. And then on top of that, we've got the blue tick rated load, which is the standard that uh certification mark we apply to the heavy-duty testing that we do on in mostly cases seating. We have the party green tick, which is a more recent addition to our uh portfolio. And we also have the orange tick, which is the certification mark which we use for compliance to the mandatory standards for children's furniture, in particular bunk beds and cots are the ones that we we apply. Those are prominent, they're on all of our certificates. The issue we do find, and obviously there's quite a bit of value in our marks, is to chase the people down when it comes to our notice. It comes to our notice through a different forum or fora. One would be that a current client of ours or a member of ours sees something in the marketplace which is questionable. The other is by our own searching, but you can search for years if you like, because we're looking at hundreds and hundreds of websites where people are calling their product a party certified. Sometimes it is, sometimes it isn't, and sometimes it's a mixture, it's partly certified, or one particular product is certified, but they're claiming more products. You know, you get examples, for instance. I looked up a few examples recently, just for today. We had a situation whereby block chair, which you see everywhere around the place, there is an Australian standard for compliance. And there are two levels 110 kilogram and 135 kilogram for that particular chair. As it's a plastic product, the standard requires that each colour be assessed because there are different elements to there's the dye and the spillers that go into the various colours to make them different. And one particular client had used their testing to test one particular colour, and there were six in the range. Then somebody else has got hold of that certificate and claimed all six. So whether or not it was a pass-on from the original owner or whether it was just somebody else, it's very difficult to actually track these people down. We tried in one case to track somebody down and wrote to them, and then we took it to our attorney, and he said, Well, uh, it's probably uh a doable exercise, but it could cost you up to $70,000 to chase this down. As a business, that's not viable for us. So I in that circumstance we wrote a couple more letters and eventually what else can you do? And they get away with it. Uh that's not an isolated case, but that's very difficult to chase down. But uh the other area we find in relation to uh testing and certification is where people are claiming clients to the fourth standard. And in some cases, if you actually look for the test report, if there isn't an underlying test report from somewhere else, these tests have only been doing partially testing for the product. We had somebody submitted a test report to us to claim they claims a certain party certification. There are 17 different tests that need to be undertaken on this particular chair. There were only five undertaken on the test report, and the bottom of this overseas test report says complies to the requirements. And then if you're looking very, very fine written down the bottom as specified by the customer. So one of the things that we do find is the area of procurement. We don't think the procurement departments of various enterprises, whether they be government or otherwise, are strict enough in policing the material that's presented to them if they even see it. Somebody comes along and said, I've got a party certification on this table, and the procurement guy says, Yeah, you're a good bloke. We know you, we've been dealing with you for ages, it's a done deal. But if you actually Turned around and then asked for the certificate. Have you got the party certificate for this? Oh yeah, here it is. And then if the uh procurement person looked in detail, you might find it's an age certificate. And uh it it might have expired because our programs only run for three years before they're recertified. And in some cases they may not even be in a party certificate to back up that time. So it's a it's a difficult challenge for a small business. And there was a website that you recently pointed us to, not only me but a number of other people. I think I spent about three days going through that because the website only lists particular products, but it doesn't list the customer. It just gives the customer a name or a number, like AB123 or XY570 or something. And you have to try to get the details behind that, you have to track that down. And if you don't know what that is, it's very difficult to actually track that down. And only sometimes by knowledge of the perhaps the name of the product, you might say, Oh, that's right. That particular company had a product like that once, and you can look at that and you may find it's related, you may not find it, might be just to take off on the name for a number that else is using.

SPEAKER_02 23:10

Thanks.

SPEAKER_07 23:10

So it's no simple challenge to look after your property. And it's obviously valuable because of the way it gets used.

SPEAKER_02 23:18

It's used, that's exactly right. And it's also valuable for our members to know because that's where you're losing business. Your competitors are ripping you off. So I'll give an example that I think Simon might be able to respond to, and it is an actual genuine case study. So our beautiful new Anzac station had a certain tender put out during the build, and the conforming tender was bid for by a local timber supplier who happens to be a member of ours. And the winning bid was an imported inferior timber product that didn't conform with the actual tender but claimed to be certified. So, how does that impact on local businesses when these falsified claims are being made, apart from the fact that it's a billion-dollar build and they've lost that work?

SPEAKER_06 24:06

One of the protections that you have is in chain of custody certification. So to be chain of custody certified, what it means is you do due diligence on all of your suppliers, making sure that your suppliers, if they're providing certified material, you go back and you check the validity of that to making sure that that product is actually certified. It's got a valid certificate that it actually comes from that particular manufacturer and it's the species that's listed on the certificate. So there's a due diligence check to make sure it's it's it's legitimate. For products that actually don't come from a certified source, there's checks and balances. It's called controlled sourcing. Again, and you do checks to make sure number one, it's legal, it comes from a legal source, you verify the legality, you collect information to show that it's non-controversial. So it operates at the two levels. It's verifying your supply chains and the products in your warehouse, and it's also checking those materials that aren't certified to make sure that they're at least non-controversial if they're not certified. So again, if that tender was won by a company that had chain of custody certification, that wouldn't have happened because that material wasn't certified. And if it's not certified, it's outside the scope of their chain of custody and they shouldn't be selling it. Or if they were, they could potentially lose their certification. Unfortunately, we live in a world where in many of these things there's not a lot of enforcement. You know, it still comes down to who's oftentimes who's got the cheapest price. And unfortunately, when it comes to timber and many other products, it costs genuine money to build quality and assurance into a product. But you can, in some places, you can manufacture a product that looks almost identical and get away with it, and it's not right. So again, if nothing else, we need stronger enforcement, especially at a government procurement level. You look at every state, federal, the federal government, the state, even uh councils will have a usually have a timber procurement policy, and it will say that we want all timber used for our projects that we're funding to come from a sustainable source. The problem is you've got the policy, but I think a lot of the time, unfortunately, it's ignored. Now we have the to change that, but we're only a single voice, and as in a wider industry, you start beating this drum that hey, hey, you know, this is really important. You don't want either unsafe, uncertified, or unsustainable materials being used. It doesn't make you look good as a government. How about taking some notice of your actual of your own policies?

SPEAKER_02 26:36

Yeah, and I think the fear that we uh amongst our members often is if they complain, they may miss out on the next bid opportunity. So they keep their head down. But if you tell us, we can actually go out to bat. And we can go out to bat by de-identifying you. We don't tell anyone who you are, we give the general overview of where the procurement process has fallen over, and we can support you with the help of our colleagues here. Mark, as an example of a really horrible situation, can you give me the points at where this could have become a legal litigation? So I'll give you the example. A few years ago, everyone will know these chairs. They're metal, they've got a cutout in the centre. Sometimes they've got a back, sometimes they're just a stool. You can pick them up. They're in every single cafe in Australia, pretty much. I'm sure you can visualize them. They're called a Tollix chair. They're designed in France 50, 60 years ago. Iconic design. We had one licensed importer of this particular genuine design manufactured product who was bringing in 40 to 50 containers a month because they were so popular. A few of our retailers got a bit clever and decided that they would rip off the design and have them manufactured offshore in a country that shall remain nameless. The gauge of the steel was not the same, and the design of the legs was not the same. But nevertheless, these retailers thought they'd make a killing, they nearly did, by bringing them in. A couple of people in Queensland, because you know everyone walks around barefoot in Queensland, don't they, Tony? Went into the cafes, sat down, wrapped their legs around the legs of the stools, and then went to get off the stool and sliced their toes off because the gauge of the steel was so thin that it became a blade. So the first retailer had to recall all the products, which cost them millions. And then another retailer, starting with the same first letter, 12 months later imported the exact same product from the exact same manufacturer offshore and had to go through the whole process again. So, how many times do we have to litigate or have product recalls through the ACCC? Oh, and by the way, the legitimate licensee, when I reached out to them, said we just can't afford to fight them because they're importing 120 containers a month now. And ours has gone down to five containers a month.

SPEAKER_03 28:55

That's a difficult one. There's so many moving parts there, right? It depends on the facts, it depends on whether there's a claim against the manufacturer. And it's very difficult to litigate against a Chinese manufacturer.

SPEAKER_02 29:09

I didn't mention China.

SPEAKER_03 29:11

I'm just saying it out there, you know, whether it's Chinese, you know, or it could be from the Philippines or wherever it could be, it's very difficult. I have this battle every single day with clients that are looking to set up shop overseas, they're looking to take on consultants in the Philippines, etc., and they want legal documentation in place. And lawyers get it all the time. And it's more the case of a deterrent than an actual litigation, because when it comes to litigating against a big Chinese manufacturer, it becomes very difficult to enforce in this country. And even if you have an agreement in place, it comes down to whether it's the governing law provisions, whether it's under Australian law, whether it's under the foreign law, whether it's under a neutral territory, that becomes difficult. But then it really depends on that importer of the product is then supplying that product to the customer, then the relationship, the legal nexus is between the customer and the supplier, right? Not necessarily the manufacturer, right? That party should still have an indemnity, should still have an agreement in place with the manufacturer to ensure that any product is fit for purpose, it's it meets uh quality standards, it meets Australian standards to come into the country. I work with clients and I won't name the product because they recently went into liquidation. And the product initially came out of China. I'm using China, but I'm not singling out China. But the product came out of China and there were defective components, and these products used electrical components, which is even worse because they were hazardous from a fire perspective. And fast forward, some of these products started catching a light and caused serious damage to businesses or homes because these products uh caught fire. No one was injured, but some of these products caused significant damage. And the ACCC didn't get onto it insofar as a mandatory recall, but it triggered a voluntary recall because the founder, the CEO, couldn't live with themselves, and God forbid something worse happened. And that voluntary recall resulted in the liquidation of the company very recently because to get that manpower to go out and recall two, three thousand units and get staff in and to go in. And then and then what triggers was customers from and and these products were only a select number of products in a massive range of products, and these select products like go back to like the early 2000s, right? So a lot of the time you can't even track down those customers anymore because they've now been sold the products and there's secondhand products. And but then when you do go out to do a recall to a customer, the customer, you know, now starts to invoke their rights under Australian consumer law and says, Oh, they want a new, I almost said what it was, they want a new product, and that product's like 15 years old. But now because it's being recalls, it's like, oh, there's a chance to get a new product, and then you start to get into these disputes with the customers. So it's so hard. I mean, obviously you have various standards and you've got to do quality testing, et cetera, when you bring it in. And I think the responsibility should fall on the supplier of the product to the consumer because they need to ensure they should have agreements in place with the consumer to show that the product that that consumer is buying is fit for its intended purpose, right? And that's what falls short. And then consumers have have rights under Australian consumer law that they can act on, but then you know, indemnities come into place and it becomes who's at fault and can we ultimately bring a claim against the manufacturer? Or there's so many steps along the way that it's it's very difficult at times to litigate. And if you can litigate, it can be a very, very costly exercise and an exercise that can result in that particular party not having the resources to fight it. And that's when you start to look at companies going into administration or or liquidation, and then the consumers are ultimately left you know with deposits that they've paid, they don't get their products, it becomes an absolute nightmare. And I'm finding I do a lot of litigation. So I'm not sure that completely answered your question, but there's a number of ways in which you can try to protect yourself from these things happening, again by having all you can really do from a legal perspective is make sure that you do as much due diligence as possible around the product, around the party that the around the manufacturer, around the suppliers, around getting the right IP in place, certification marks or regular brand of origin trademarks or design rights or patents, and then having agreements in place, even as a deterrent.

SPEAKER_02 33:48

So just to wind that little thing up, the retailers, both of them, their risk mitigation strategy was just to put in place a wholesaler. So they were no longer considered the direct importer. So instead of taking responsibility after they'd gone through those recalls one each, they just thought, well, we'll just pass the risk on to somebody else and keep importing the products. And then they modified the feat by putting some plugs in or something. But anyway, Bob, I know what you're going to talk about.

SPEAKER_07 34:24

The only difference was that you rightly pointed out, Patricia, the steel was just a little bit thinner. And so it had gone from 1.2, I think, down to one mil thick or something. And it down the bottom where the leg closed in, there was uh the shear point at the bottom, which was where the guy got his tokens. And outside of that, you probably couldn't tell the difference. Perhaps the topic rather than the original. But you might not have never found that unless that injury had occurred, like lasting start.

SPEAKER_02 35:00

Yeah. But I think the most important thing for all of us to recognise here is that whilst standards aren't always mandatory, they're in place for a specific purpose. And we do have a few mandatory standards, which is COT standard in particular, Bob, that you and I have worked on for many years together. And I tell you, I never want to read another coroner's report on a baby dying in a COT. I never want to read another coroner's report of a child being killed by toppling furniture. And yet it continues to happen. So the education piece I think is important, particularly when we have one particular design of COT, which was recalled under one name and went back on the market six months later with a different name. So it's really this unconscionable conduct that we need to look out for, particularly when we know that there are solutions, which is the digital product passport. That will be the solution.

SPEAKER_07 35:51

Yeah, well, there are a few standards that are mandatory, mandatory requirements, particularly for cots, folding cots, bunk beds, they're all mandatory requirements. But those mandatory requirements don't necessarily take into account the fullest standard. They're abbreviations that have been written by the ACCC over the years, but they are in fact police. The rest of the furniture standards in general are voluntary standards. Unless they become perhaps a clause within a tender document. And then we hear stories about the tender documents all very well and good until it comes to the bottom line, which is to get the project over the line and there isn't the money left to do the furnishing.

SPEAKER_02 36:37

I might just take some questions from the floor. I could go on forever because I do have lots of really bad stories.

SPEAKER_01 36:44

With the especially the tollic shares, I think there is a basic problem that in the country of manufacturing, they might really generally think they're presenting a good product, which is in their country under the regulations and is all approved and it's all certified, and then comes to another country, and then suddenly it causes issues. Because I don't think, no matter how, that there is any manufacturer thinking I'm gonna make a chair that's gonna that's gonna hurt. Yeah.

SPEAKER_02 37:15

Do they care?

SPEAKER_01 37:16

They do because they will eventually lose the business no matter how. So that their interests they might be a bit different, but they're still quite similar. So I think it has to do a lot with what I said, different regulations for different countries. I mean, we all go to Asia on holiday and then see, oh my god, how's that possible? Those guys they're working on the sixth floor and they got don't even have bamboo scaffolding on the outside to protect them. Yeah. Is there anything internationally where there are organizations talking to each other between countries?

SPEAKER_02 37:49

Is that something, Arma? Is that something in terms of IP that you could respond to?

SPEAKER_00 37:54

So a lot of the IP rights are a part of some treaties, which means they talk to other countries through WIPO, which is the World Intellectual Property Organization. So unfortunately, designs isn't a part of a treaty yet. However, we do mimic a lot of what other countries do. And I do want to say I agree that different countries will have different rules and regulations. And in Australia, at least in this IP Australia, we do try to make sure that you understand that we're not trying to just get in your way because you've gotten an approved somewhere else. We're just wanting to make sure that everything is at our standard. And sometimes that's rough, especially if you spend a lot of money getting things done overseas. But a lot of the other intellectual property rights, like patents and trademarks, they do mimic almost identically what the rest of the world are doing as long as they are part of those treaties. So that will circumvent any differences in things and streamline your application and getting it approved over here. But yeah, we are very Australia in general is very much interested in quality of things as well. So, and we reflect that in our legislations.

SPEAKER_02 39:08

Fantastic. Any other questions? Kevin's got two. Don't be greedy.

SPEAKER_04 39:13

One for Mark to start with. I've I've got an extremely complex supply chain. We do a lot of due diligence over all the raw materials we bring in. Of course, things do go wrong. So from a uh I've got a terminology we've used, um shifting the liability to a supplier, for example. What's the legal term for that? Product indemnity. That's what I'm going for. So the from an indemnity perspective, having done all of our due diligence, how defensible are those contracts, particularly when we're dealing with overseas suppliers?

SPEAKER_03 39:46

It really depends on the contract, it really depends on the circumstances, and it really depends on the extent of the indemnity. So I I'm dealing with a settlement today on an international client that provided through a contractor overseas that provided support to a client that was then providing services to an Australian company, and we've been literally going at it all morning on the indemnity provision in the deed of settlement and release. So, look, a well-drafted supply agreement or manufacturing agreement with indemnity provisions and intellectual property provisions is definitely enforceable and can be upheld in under Australian law. So it's important that it's not so much a shift of responsibility. It's to, you know, or you can't contract out a certain obligations under law, whether it's in consumer law or different, you know, whether it's a straight breach of contract or misleading deceptive conduct or misrepresentation claims, etc., that can still be enforced. But a well-drafted and very tight indemnity provision is definitely enforceable and can definitely be relied upon. So those types of provisions around intellectual property and around limitations of liability, again, you know, within the confines of law. So if it's an Australian consumer law claim, that can kind of be pierced and we'll step outside of that enforceability. But then there's other things you can do. You can have limitations of liability, you can have provisions around your insurance, et cetera, as well to try and protect you. But that's where the difference between an AI drafted contract or, you know, something that you get out of the box as opposed to having a properly legally drafted contract where you've got you can really get into the weeds and understand what that indemnity is for and how it's used and how it's protected makes all the difference when it comes to litigation and enforceability in court.

SPEAKER_04 41:36

Yeah, I think it's an important point. It's it's very easy to take the supply contract that your supplier has given you and scribble you okay on that.

SPEAKER_03 41:44

And people have no idea with indemnity. So that you know, and then again, this matter this morning has been about one of the provisions talks about full releases, and then another provision talks about indemnity. And there's a release clause and an indemnity clause, and they're actually different. So if you're running a whatever business it is as the CEO, CFO, COO, don't think you're the chief legal officer as well, and do it because that's where you end up in hot water. So it's always good to get that legal advice around those particular provisions, intellectual property, confidentiality, use of data, confidential information, and personal information under the privacy act. And then, of course, looking at liability and indemnities is the key to every single legal document.

SPEAKER_04 42:25

Great insight. Thanks.

SPEAKER_02 42:27

What was your second question?

SPEAKER_04 42:28

Second question, again, around complex supply chains, Bob, Simon, to another degree as well. Looking at various important materials, what tools and approaches do you guys take? Do you guys put in place to allow someone making a decision to validate their claims that are going forward? Obviously, there's some false claims out in the market. Do you have these validation tools or certification checks in place?

SPEAKER_06 42:55

Absolutely. For example, there's the PFC International database that will list every certified organization on the planet, what is in their scope of certification, what species they're permitted to use, and information on that supplier, which will help enormously to separate those that have it from those who just say that they do. So that's certainly in place. The other thing you can do is give me a call as well. If you're dealing with a new supplier and you're a bit unsure, I could normally do a little bit of digging and uh yeah, find out some probably additional information through the auditors. And the other thing too is for at least for sustainable forest management, the audit summaries have to be made publicly available. So if you wanted to have a look and just have they got a good system or not, you can normally pick that up on the audit summary. That'll give you some fairly good key information as a starting point. At the end of the day, though, there is no substitute for cynicism and doing good due diligence.

SPEAKER_02 43:55

Know your stuff. Ed, last question, I think, at the end, because we've missed. Afternoon tea. We're having so much fun. We missed. Well, it's there, but you're not getting it yet.

SPEAKER_05 44:06

So I just for a moment, because I think it's worth talking about China for a bit. The conversation's been fascinating. But if I think about where furniture comes from in China, there's basically two hubs. One is in Xhan and the other is in Anjou County. Anjou County. Both of these places, like many industrial hubs in China, are suffering from the most obscene amounts of deflationary pressure. What I mean is that I think it was Target that bought the stores, right? Are our retailers here just a bit stupid or a bit naive? I mean, I I don't know if it's so much a question of them being cynical, but they have this belief that online markets in China, yes, they're massively efficient, but there's this naive standards and maintain. And if you talk to people in China about what they buy online, they always say, buyer beware, be very, very careful about the quality that you that you source. So I've just I'd love to hear the panel talk a little bit more about the economic conditions in China rather than the legal conditions that are driving the outcomes that we've been discussing.

SPEAKER_07 45:11

I might uh throw a few points in there. I guess one of the things that their industry, like probably many other industries, they're looking to take cost out of the product and they're looking to streamline the production andor the raw material supply. That comment I made to Patricia a moment ago about the Tollix chair, it's not uncommon to find certain products coming in not as heavy as they were before. We weigh product, and sometimes we'll find that the chair is lighter than it was. Interesting, we then start to track down why was that. Sometimes you can find that the mechanism has been reduced in the mechanism of an office chair, it's been reduced in the gauge. Sometimes you might find in a chair like this one, not particularly this one, but like this one, where the uh the gauge of the steel frame has been changed. It still might look the same, it might be chrome the same. It to the naked eye will look the same. But if you put it on the scales, you'll find a difference. And I think that there's been a cost down. My previous background was in the uh the uh automotive industry, and we were beaten hand over uh to uh reduce cost year on year. And we talked earlier today about the protection that the automotive industry used to have and doesn't now, and we don't have any tariffs, for instance, or very few. But that two and a half percent cost down that was implemented under the Button Hawk program, or at least the car plan, became very much a focus on cost. How do you get two and a half percent per year cost down that you can continue to give to the car companies? You can do it maybe for a couple of years, but you try and do it for five or six years in a row, and all you're doing is at the end of the day, you're probably eroding most of your margin. And one of the ways that people had had identified was to reduce reduce the cost, reduce the mass, so therefore reduce the raw material price. You only beat so much out of the labour cost that if you're not upgrading your skills or mechanising and spending perhaps high levels of money to upgrade your manufacturing, then there are very limited chances as to how you know design sometimes is fixed. So you can't change the design of a product that fits in an engine very easily, not as a supplier. And then raw material cost was one, labour cost was the other, and then of course the end result is sometimes margin stuff. Unless you start off with a really good margin, it's very difficult.

SPEAKER_02 47:36

Simon.

SPEAKER_06 47:36

Can I be really quick?

SPEAKER_02 47:37

Yeah.

SPEAKER_06 47:38

I've been speaking to some of my colleagues in China recently. The domestic construction market has completely collapsed. So there is 10,000 manufacturers of timber products who are desperate for a sale. They don't necessarily care where it goes, but they need cash flow to keep on going. Generally, a lot of products now are sold at cost price, and they're relying on the export subsidy to keep the business going. So, what does that mean? What keeps me up at night is every time I turn my laptop on or go on LinkedIn, I'm seeing offers from Chinese manufacturers I've never ever heard of saying, come and trust me, I'll make good stuff and do good price. You've got a legitimate, well-established chain of importers. ITI is a good example. They will do the due diligence, they will make sure that the product is safe, reliable, fit for purpose, and sustainable. The problem is these offers are made across the supply chain. And I'm speculating there as many small businesses, maybe small hardware stores, even maybe furniture manufacturers who have seen this and saying this is an offer too good to say no to. And they'll buy a container or import some product without the due diligence, without the technical knowledge to make sure that it is fit for purpose. And to me, it's it's a real risk. I think a very big risk. Sooner or later, a little bit us on the bum. And more importantly, that process now is starting to set the market price. You know, and all of a sudden, those companies that do the right thing are seeing their margin squeezed by other products that probably aren't fit for purpose, aren't compliant, and they're shortcutting the system.

SPEAKER_02 49:10

Yeah, perfect. I'm going to finish just with a really quirky story, which is why I laughed a second ago. One of our manufacturers decided to have their design manufactured offshore for a prototype. It was delivered, it was a sofa. They decided to cut it open to check the you know, infrastructure structure inside. And they realized it was almost bolsa wood. It was so light. If you sat on it, it would just break. So they wrote back to their manufacturer and said, Look, it's too light, the timber's too light. So they got the second prototype, cut it open, and there were bricks taped to the bolsa wood. So I think communication, too, is part of the issue here where we really need to understand. Sorry, I have to laugh. We could just see it. We have to understand that sometimes communicating what our standards are is very important as well. Can you join me in thanking our panel this afternoon? Thank you.