Lacoste vs Silk Street Plaza; Litigation vs Contributory Liability

Remember Wednesday, (see here) when a Memory Of Understanding between 23 luxury brands and Beijing landlords of markets was signed? (including the notorious Xiushui Haosen Clothing Company, that was convicted in September to pay compensation to 5 luxury brands, see here). Only three days later Chemise Lacoste sued landlord Xiushui Haosen (who owns Silk Street Plaza (the successor of Silk Street Market, see here) and 5 tenants because of trademark infringements.

Lacoste is seeking 100,000 yuan ($12,476) in compensation from the landlord and each of five retailers in the Silk Market, according to Paul Ranjard, partner at law firm Adamas in Beijing.

According to 'sources near the case': "Xiushui Haosen not only failed to stop these tenants from selling counterfeited Lacoste products but also tried to connive with them by providing business premise and other convenience, according to the indictment brought in by the French name brand. Lacoste claims that a number of tenants have been found selling cheap but fake Lacoste T-shirts with crocodile logos since the Silk Market Plaza was open to business in 2005 and asks the company and each of these tenants to pay a compensation of 100,000yuan. Lacoste said that it had sent a letter to Xiushui Haosen in January, requiring the company to clean out all Lacoste counterfeits and make a written apology, but got no reply."

Lacoste was not included in the protocol between the 23 European brands that signed the protocol with the Beijing landlords. Should it? Is this the way forward to enforce intellectual property? An unnamed European offical ventilated some justified criticism, see here.

An advocate of 'contributory liability' is Joseph Simone, partner with Baker & McKenzie, who is representing the 23 companies. He said:
"What we're hoping is that when other companies that are not part of this coalition start using the same strategies, landlords will start realising it's better to cooperate," he said. "Otherwise they'll just end up in lots of civil actions."

To make the landlords responsible by contract for any IPR infringement may be not the end of infringements, and the question is whether it really helpe when it comes to a civil action; does it give these luxury brand companies a better starting position to litigate?

Read Jerker Hellstrom's article for Reuters in the Washington Post here and Ling Zhu's article for Xinhua on IPR.gov.cn here.