Europeans are buying the fakes, too

Beijing’s famous Silk Market is a fascinating place. In this multi-storey shoppers’ paradise, vendors hawk designer apparel to the thousands of bargain-hunters that swoop on their stalls every day. As shoppers know only too well, the spoils they take home are, in fact, cleverly copied rip-off versions of European brands such as Adidas and Dolce & Gabbana.

Protecting European brands abroad is a major priority shared by Trade Commissioner Peter Mandelson and Enterprise and Industry Commissioner Günter Verheugen. Last June, they signed an agreement with US Commerce Secretary Carlos Gutierrez to step up co-operation in the fight against fakes. Among commitments set out in the accord was joint enforcement of intellectual property (IP) rights in third countries such as China and Russia.

Russia is well known for its booming trade in CDs, DVDs and fake consumer goods. Although efforts have been made to crack down on counterfeits, EU brands now fear the repercussions of amendments to the country’s civil code that will scrap laws designed to protect trademarks, patents and copyrights. The law will enter into force at the beginning of next year. Christina Sleszynska, of the International Trademark Association, a not-for-profit organisation with offices in Beijing, Brussels and New York, says that the law is in violation of World Trade Organization (WTO) rules. Russia is expected to complete accession talks for membership of the WTO later this year.

In China, the situation is improving. Shoppers in Silk Market will no longer find Gucci, Chanel, Burberry, Prada and Louis Vuitton on the stalls. This is because, in 2005, the five European brands sued the landlord of Silk Market for allowing copycat products to be sold on the premises. The Beijing Higher People’s court ruled against the landlord, clarifying rules for all of the city’s retail markets. Market landlords have now agreed to work with the brands to develop a new standard rental agreement setting out an obligation for vendors to respect intellectual property (IP) rights.

Italian chocolate-maker Ferrero Rocher hopes to be as successful in China as the five clothing brands. If imitation is a form of flattery, then Ferrero has every reason to feel flattered by the two Chinese versions of its flagship brand of gold-wrapped products. The company is currently waiting for a ruling from the Chinese Supreme Court on its complaint against the manufacturer of the main fake Tresor Doré, which is sold in major outlets including Shanghai International Airport. A ruling by the Tianjin High Court last year in favour of Ferrero Rocher was cancelled pending review at the Supreme Court.

Boxes of the second Chinese copycat version, Ferrari, have been found in the US. The manufacturer of Ferrari fails to point out on packaging that peanuts contained in the chocolates may harm people with allergies, according to Ferrero Rocher’s European Affairs Director Alessandro Cagli. Ferrero Rocher have reason to fear damage to their brand as a result of Ferrari’s negligence.

Cagli’s tales of the Chinese government offering fake chocolates during visits of foreign dignitaries bolsters the common perception of China as bad poster-child for counterfeiting. But Sleszynska counters this view, claiming that awareness of the economic damage that can be caused by counterfeiters is growing fast in China. Given that a large percentage of breaches in China affect Chinese interests, the government is now taking action against counterfeiters.

Lest it be forgotten that counterfeiting is an international problem, Sleszynska points out that the EU has a booming trade in fakes that is found in both old and new member states. EU criminal organisations have cottoned on to counterfeiting as a low-risk, high-profit business. Goods may also emanate from within the EU. Unscrupulous factory owners operate a parallel trade in surplus production of authorised goods. Websites such as eBay are rife with such products.

EU citizens also shop for counterfeits outside their borders. A closer look at the shoppers spilling out of the exit of Beijing’s Silk Market exit should reveal a substantial proportion to be gweilo (foreign devils) speaking a variety of European languages.

Beijing’s famous Silk Market is a fascinating place. In this multi-storey shoppers’ paradise, vendors hawk designer apparel to the thousands of bargain-hunters that swoop on their stalls every day. As shoppers know only too well, the spoils they take home are, in fact, cleverly copied rip-off versions of European brands such as Adidas and Dolce & Gabbana.