April 2008
Taking Action Against Counterfeiters in China
Courts in China have issued two decisions against Chinese companies copying Italian products. The decisions come within two weeks of each other and will raise the hopes of European and American companies that China is beginning to take intellectual property rights and the counterfeiters who infringe them seriously.
The first decision came from China’s supreme court following Ferrero Rocher’s three year legal battle against Montresor and their Tresor Dore chocolates. Despite the different names, the similarity of the appearance of the chocolates and the packaging was enough for the court to award damages of 500,000 Yuan (around 45,000 Euro) to the Italian manufacturer.
The second decision concerned the use of the interlocking GG mark on shoes, which Gucci claims ownership of. Senda Group was ordered to pay Gucci 180,000 Yuan (around 16,000 Euro). The Shanghai Pudong New Area People’s court found that it was likely that some would consider the shoes a collaboration between Gucci and Senda. The court ordered the retailer selling the shoes to remove them from their shelves but did not award any damages against them as it was “unaware of the infringement”. Gucci had sought total damages of 600,000 Yuan.
Counterfeit goods are big business globally, with 7% of the world’s industry estimated to be based on counterfeit goods at a value of around £150 billion. Industry chiefs in Italy argue that Italy is a prime target for counterfeiters from China due to the reputation enjoyed by their fashion and food businesses. They estimate that 86% of counterfeit goods seized in Europe which originate from China are copies of Italian products.
Briffa Comment
These successes are very welcome. However, it must be noted that the Ferrero Rocher case took three years to come to fruition and Gucci recovered only a small proportion of what they were seeking.
The best strategy is to do everything you can to try to limit the likelihood of copying in the first place. There are certain measures you can take to make copies harder to make and easier to spot.
A lot of copying happens when know-how or designs get taken from legitimate manufacturers. If you want to use a manufacturer in China research their reputation and track record thoroughly. Get a contract that clearly sets out the confidentiality and security requirements. If you can give your trademark an appearance that is hard to replicate, say by injection moulding or particular stitching, then this can help as convincing copies will be harder to make.
If worst comes to the worst and your products are copied, get in touch with a lawyer as soon as possible. Acting quickly can be key to acting effectively.