China Lucky Film Corporation


            The China Lucky Film Corporation is wholly owned by the China Aerospace Science and Technology Corporation (CASC).  China Lucky Film, according to its web site, “was founded in 1958, headquartered in Baoding, Hebei... At present, Lucky products are involved in film materials & coating materials, printed materials, image recording materials, fine chemicals and more than 100 varieties in the 4 series. The products are not only popular in China but also exported to more than 80 countries.”

            In March 2009, A Los Angeles jury returned a multi-million dollar verdict against China Lucky Film in broad and sweeping finding of wrongdoing. Click here to see the judgment.  According to evidence introduced at the trial, China Lucky claimed to be “a trans regional and conglomerate modern company in the field of imaging and information recording industrial sector of China in terms of largest scale, strongest technical force, varieties of product and market share.”  China Lucky claimed to be one of 189 large size China owned enterprises financed by the State Assets Administration and that it engages in the manufacture of photo-imaging products such as Photographic film, Photographic digital and analog paper that are manufactured for civilian as well as military use.

            The jury found China Lucky liable for negligent misrepresentation, breach of warranty and breach of the implied covenant of good faith and fair dealing arising out of its business dealings with Royal Marketing, a Los Angeles based Photo-Imaging company with nationwide distribution business.

            Royal Marketing introduced at trial, a very detailed written agreement signed by it and China Lucky.  The Agreement obligated China Lucky to sell very specific products to Royal Marketing.  Royal Marketing argued that China Lucky refused to sell certain products contained in the agreement and that the products that it did sell were of inferior quality.  For instance, a number of witnesses, including experts in the photo-imaging field, testified that the quality problems stemmed from the fact that American photo-imaging companies all use standardized “chemistry” in the processing of Photographic paper to pictures.  Several witnesses at the trial testified that China Lucky’s technician told them that the China Lucky paper required the photographic paper processors to add varying amounts of other chemicals – including ammonia.  Witnesses called by Royal Marketing, including several of its customers, all complained about the photo paper’s poor quality.

            After the trial concluded, Royal’s Vice President, Farshid Ourian noted that “When one of our customers was told by a China Lucky technician who had visited his lab, that he was supposed to add ammonia, I  thought he was going to call the police to have the guy physically removed.  Each of our clients were utterly shocked at what they were being told by the China Lucky representative.”


            After the jury announced its verdict, Royal Marketing’s President – Bob Bakhshi stated: “We are ecstatic. We always knew that when a jury heard the truth of what transpired and how China Lucky behaved, how they treated us, and the facts surrounding around the product they sold us, it would make the findings it did.” 

            Although Royal Marketing and China Lucky had entered into a long term distribution deal, almost from the beginning, they started giving Royal Marketing problems.  Bob Bakhshi testified that first China Lucky refused to sell them one of the main products set forth in the written agreement.  The jury was told that Royal Marketing found out later, after having purchased and re-sold in the United States hundreds of thousands of dollars of the China Lucky photo paper that the paper was not manufactured to U.S. standards and was of poor quality.  A China Lucky consultant actually admitted at the trial that the China Lucky paper was not suitable for the U.S. Market.  “That admission was astonishing” noted Bakhshi, after the jury returned its verdict.


            Royal Marketing had been in business 25 years when it started purchasing photo-imaging product from China Lucky.  Prior to that, Royal had been one of Konica Minolta’s largest and most successful independent distributors of its photo imaging products – catering to the cruise line industry among others.  “Our deal with China Lucky killed our business.”  Said Bakhshi.  “We have never been able to recoup the losses we sustained to our goodwill nor were we able to locate any alternate suppliers.  The jury made it clear that they harmed us, and that they must reimburse us for the substantial and severe damages they caused.  Incredibly, and after everything they put us through, they refused so far, to pay any sums ordered by the jury.”

            And China Aerospace Science and Technology Corporation (CASC) – the owner of China Lucky Film, also refuses to pay the judgment. CASC’s website states the company is “a large state-owned enterprise group with its own famous brands such as Shenzhou and Long March, intellectual properties, outstanding innovative capabilities, and strong core competitiveness.  China Aerospace Science and Technology Corporation (CASC) was founded on July 1, 1999 with its headquarters in Beijing.”

            China Aerospace Science and Technology Corporation (CASC) claims to have eight large R&D and production complexes, including the China Academy of Launch Vehicle Technology (CALT), Academy of Aerospace Solid Propulsion Technology (AASPT), China Academy of Space Technology (CAST), Academy of Aerospace Liquid Propulsion Technology (AALPT), Sichuan Academy of Aerospace Technology (SAAT), Shanghai Academy of Spaceflight Technology (SAST), China Aerospace Times Electronics Corporation (CATET), and China Academy of Aerospace Aerodynamics (CAAA) as well as a number of specialized companies such as China Great Wall Industry Corporation (CGWIC), listed companies and other units directly affiliated to it.

By the end of 2009, China Aerospace Science and Technology Corporation (CASC) claimed to have had “total assets of RMB 153.3 billion (Approximately $24.75 billion US Dollars) and in 2009, was ranked among the TOP 10 of the existing 125 central enterprises in the annual management performance assessment by the State-owned Assets Supervision and Administration Commission of the State Council for 2008 and 2009.”


            In October 2013, in a stinging rebuke to the China Lucky Film Corporation, the Los Angeles Superior Court has ordered all of its ownership interests in any intellectual property -- including two brand new patents -- to be immediately transferred to a court appointed Receiver and then liquidated to pay a nearly three-million dollar judgment the company has failed to pay for more than four years.Click here to see the Order. Additionally, the court stripped China Lucky of its ownership in the “LUCKY” trademark and ordered the Receiver to likewise sell it off to satisfy the judgment.  Emanuel Barling, Jr., was named Receiver and was substituted in place of China Lucky’s ownership interest in the two patents and the trademark “in all respects.” 

The patents to be auctioned are for “Double sided photographic paper” and “Back sheet for solar cell and method of manufacturing the same.”  The ‘Double sided’ patent was issued in April 2013 and the ‘Solar cell’ patent was just issued on September 17, 2013.  “It is astounding that China Lucky would give up these two extremely valuable patents and even their Trademark/logo instead of simply paying the judgment – it is the height of their arrogance” said Bakhshi.  

            When asked about the last four years and the fact that China Lucky has thumbed its nose at the jury verdict Royal Marketing’s co-owner, Farshid Ourian, stated “It’s shameful and disgusting that a company the size of China Lucky, which is wholly-owed by another massive Chinese conglomerate – the China Aerospace Science and Technology Corporation (CASC) – refuses to pay for the substantial and irreparable damage it caused and that a jury has ordered it to pay. The judgment amount is Minuscule to this group – and they were under the impression that because they operate outside of the United States it would be extremely difficult to force them to pay.  There are no real consequences for a company like China Lucky that temporarily operate or sell its products in the United States, damage third parties and then cease doing business here.” 


            China Lucky’s “Double sided photo paper” was promoted by China Lucky as a revolutionary new product that actually showed real promise and seemed to be a legitimate item that could have generated millions of dollars for the company.  Similarly, its solar cell technology appears to be cutting edge.  Mr. Ourian noted: “They refuse to pay even one cent of the judgment and apparently, would rather lose their patents and trademark than pay us.  Now the Receiver is going to auction all of it off.  We will also see to it that a trademark infringement action is commenced against them if they sell or import any of their products with the “LUCKY” logo that used to belong to them.”

            Royal Marketing’s trial attorney, Daniel Krishel, told the court that when China Lucky was informed a worldwide ‘hunt’ for its assets would take place, China Lucky’s response through its own attorney was: ‘You will waste more time and money in your wild hunt’ -- apparently believing it could forever evade the judgment.  “Utterly inexplicable” remarked Mr. Krishel in describing China Lucky’s actions and resulting loss of their intellectual property. 

            When asked if he had any advice for future business partners of China Lucky, Mr. Ourian said, “Anyone contemplating business with the China Lucky Film Corporation which is wholly owned by the China Aerospace Science and Technology Corporation (CASC).  should look at this case, and then make its own business decision accordingly.” At least for now, it looks like the hunt for China Lucky assets may be over.  Royal Marketing believes the two patents and trademark can be sold off and the judgment paid in full with the sale proceeds.


China Lucky Film Corporation