IP Komodo’s friend Tim Smith of Rouse was curious to know what was happening at the famous Beijing Silk Market. He asked his intern Dominic to take a look and here is what they found. Large public notices appear around the market issued by the Beijing Administration for Industry and Commerce, concerning counterfeit goods. The notices (in Chinese only) state that any merchants in Silk Street caught selling any items bearing any of a finite list of famous foreign brands (Prada, Chanel, Burberry, Givenchy, Boss, Hermes, Miu Miu, North Face etc.) would be subject to administrative penalties, as all such articles would be counterfeit. Further, the management of the Silk Street shopping plaza would, if it was shown to have knowingly permitted the sale of any such goods, be subject to administrative measures and criminal punishment. These are all brands which we believe were involved in civil litigation against the Silk Market management.
There are also large red banners in Chinese and English reading "protect intellectual property rights - be law-abiding vendors" and "embrace national brand - respect intellectual property right". There were red sign boards displayed above the aisles every few metres or so in English advising customers that if they had any concerns with the merchandise they had purchased they could contact the customer service desk, call a telephone hotline or send the details of their complaint to a dedicated email address.
But a look around revealed many articles from jackets and shirts to belts and watches bearing brands such as D&G, Giorgio Armani, Adidas, Nike, Ralph Lauren and Abercrombie, all on unabashed display. Few of the brands listed in the notice, however, were seen. Coincidentally these all appear to be companies which were plaintiffs in civil court actions against the market in recent years. The result of the cases is that those brands who went to court appear to have succeeded in proving secondary liability against the landlord, so he ensures their products are not sold there. But those who have not litigated do not appear to be in that position. Further pending litigation is seeking to widen the landlord's liability further.
Guest post by
IP Komodo Dragon
zhuang 市shi 场chang), which is located near the Beijing Zoo. That it is not hard to find counterfeit products at the second floor of the International Clothes Market is an understatement: counterfeit use of famous foreign brands is omnipresent. From adidas sweaters with hood for 20 RenMinBi (a little over 3 dollar) to North Face jackets for 80 Renminbi. Robe di Kappa, Calvin Klein (but then written as Calvin Kiein), Levi's, Björn Borg. I am not sure whether the design of the pattern on the adidas sweater was also copied. The counterfeit manufacturers also expand the model and product range of famous brands. For example a non-existent LV bag model and “Louis Vuitton” underwear. Text continues below.
The area was patrolled by a police officer. But it seemed not to be his priority. The landlord liability cases in 2005, 2006 and 2010 have shown that private companies can do something about the counterfeit problems at markets by suing the landlord (owner) of the market and the second-hand landlord (the market management company). Check the excellent presentation of Dr. James Luo, Managing Partner of Beijing's Xiang Kun Law Firm about the subject, here. The question is whether the problem just moves away from a place where it seems contained to other places, just like a waterbed. Are the counterfeit products of these active brands not sold in Silk Street, but via a plethora of other channels?
