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China Gets Serious About Fake Goods
26/04/2007 |
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Zhang Xiao is on the lookout for police, his head swiveling from side to side as he stands in an underground walkway to Tiananmen Square hawking counterfeit Olympic pins and key rings from a bulging plastic bag.
``It's getting tighter and the police are conducting more raids so I take these packs because they're easier to carry around,'' says Zhang, 37, who moved to Beijing from Shandong province. ``I prefer not to spread them on the floor.''
Zhang is hardly alone pushing knockoff goods in a nation where counterfeiting costs companies worldwide $60 billion a year, according to the U.S. government. The difference is he's angering Chinese authorities, intent on protecting the five-ringed Olympic symbol in the countdown to the 2008 Beijing Games.
The U.S. on April 10 filed two complaints with the World Trade Organization, saying China isn't doing enough to stop piracy. China, viewing its first Olympics as a chance to showcase itself to the world, is cracking down on unlicensed Olympic products by introducing a hotline to report violators, stepping up inspections and putting microchips in tickets. Four percent of trademark violations in Beijing last year were Olympics-related.
``It's a matter of national pride,'' says Loo Shih Yann, who specializes in intellectual property law at Baker & McKenzie in Hong Kong. ``It shows if they want to do something about a problem, they can.''
Protecting Olympic trademarks is a ``core task'' for the government, says Wang Lijun, deputy director of the Beijing Intellectual Property Office. Wang on April 24 announced a phone hotline to report fake Olympic goods and the misuse of logos.
Embedded Chips
``We will take action within 24 hours, which includes arriving at the site and then tackling the issue,'' Wang said at a news conference in Beijing. ``We hope that by 2008, we will present a better image of China.''
Organizers also are embedding memory chips in tickets to Olympic events. Tickets won't be distributed until May 2008 at the earliest, leaving little time to hone copies before the Games, which run Aug. 8-24. A Web site fraudulently claiming to sell tickets was closed and three people were arrested last month in Fujian province, the official Xinhua News Agency reported.
Gong Zheng, vice minister of the Customs General Administration, said in January that his agency would increase inspections of goods entering and leaving the country. Customs officials also plan ``special operations'' to fight infringement of Olympic logos and symbols, he said at a briefing, without providing further details.
By cracking down on Olympic fakes, Chinese authorities risk highlighting their failure to police other trademark violations, Loo says.
$2.2 Billion Lost Sales
``It will be obvious in the months leading up to the Olympics that protection will be boosted compared to other products,'' he says. ``There's going to be a lot of Olympic fakes, but it's not as serious a problem as everything else.''
China's copying of movies, music, software and books cost producers $2.2 billion in sales last year, according to the International Intellectual Property Alliance, which represents companies such as Microsoft Corp. and Walt Disney Co.
Beijing's top trademark official says China has an obligation to protect the Olympic rings, which belong to the Lausanne, Switzerland-based International Olympic Committee.
``China has promised the IOC that it will do its utmost to protect these symbols,'' says Zhang Guohong, director of trademark supervision at the Beijing Administration for Industry & Commerce.
The Beijing government last year prosecuted 2,072 trademark violations, 89 of which involved Olympics products. Cases typically center on street vendors or companies using mascots in advertisements without permission.
Authenticity Certificate
In bringing its WTO action, the U.S. ignored China's progress in stopping counterfeits, said Wu Yi, China's most senior trade official.
``China's government is strongly dissatisfied with the move,'' she said April 24 at a conference on intellectual property rights in Beijing. ``We will fight until the end.''
Ten Chinese makers of official Olympics paraphernalia this month persuaded the Beijing Organizing Committee to protect their interests, says Devin Kao, whose company is licensed to make key chains and metal souvenirs.
Legal producers will receive certificates of authenticity to show retailers, and the companies have agreed on procedures for reporting infringements directly to the committee, Kao says.
``This is about the image of the country,'' he says.
Back in the walkway leading to Tiananmen Square, Zhang says the heavy foot traffic makes his business profitable, even though he sells a large package of pins for just 10 yuan ($1.30).
``I earn a few yuan from each pack,'' he says. ``I'm also selling these kites, and I push a pack of the Olympic mascots to those buyers, too.''
Xie Xiaofeng stakes out the opposite end of the tunnel and begins to peddle her own Olympics merchandise. Most buyers are locals who can't afford the genuine products, she says.
``I know I'm selling fakes,'' says Xie, 38, who has lived in Beijing for 10 years. ``But then it's the Olympics and people just want to own a piece of something related to the Olympics.''
(Source: Bloomberg.com)
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