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Saturday, 28 February 2009
A standoff over knockoffs in famed China market
Any tourist who has stepped foot in this city’s famous Silk Street Market can testify that it is home to some of the wiliest, most tenacious vendors who ever tried to pawn off a fake handbag on a naïve foreigner.
BEIJING: Any tourist who has stepped foot in this city’s famous Silk Street Market can testify that it is home to some of the wiliest, most tenacious vendors who ever tried to pawn off a fake handbag on a naïve foreigner.
So when the market managers temporarily shut down 29 stalls this month for selling counterfeit goods, no one expected the merchants to quietly acquiesce to the loss of business.
“We expected trouble,” said Zhao Tianying, a legal consultant with IntellecPro, a Beijing intellectual property firm representing five foreign luxury-brand manufacturers who sued the market for trademark violations. “But we never imagined this.”
The vendors have responded with the same ferocity with which they nail down a sale. Dozens of them have staged noisy weekly protests at the law firm, mocking the lawyers as bourgeois pawns of foreigners. They have confronted witnesses who had provided evidence of trademark violations and filed their own countersuit, claiming only the government can shutter a business.
A few characters scrawled in pencil on the wall outside IntellecPro’s office sums up their message: “We want to eat!”
The skirmish between the crafty but mostly uneducated hawkers and five of the world’s best known producers of designer goods is part of a much bigger fight over China’s vast knockoff industry. American movie, music and software firms alone estimate that Chinese pirated goods cost them more than $2 billion a year in sales. Any successful product is likely to be illegally copied in China, warns the U.S. Embassy’s Web site.
China’s government has pledged to crack down and faces increasing pressure to show progress. But some doubt much will change until China graduates from manufacturing goods to designing them and has more to lose than to gain.
The Silk Street Market case suggests that change is slow and painful.
It has been four years since Burberry, Gucci, Chanel, Louis Vuitton and Prada first sued the market’s operator, Beijing Silk Street Co. Ltd., and individual vendors for trademark violations. Only this month did the legal pressure produce tangible results.
As part of a court-mediated agreement, the market’s managers agreed to curtail the stalls of offending vendors, six to eight at a time, as punishment for pirating. George Wang, the firm’s general manager, said the manufacturers would renew their suit if sales of counterfeits were not curtailed in six months.
In response, dozens of vendors descended on IntellecPro’s office on Feb. 4, occupying the reception area for hours while the police tried to mediate, Zhao said. The next day, she said, they stormed past the receptionist, banged on the walls and swore at the staff. The firm’s senior partner, Hu Qi, was afraid to go home and slept in a hotel for three nights.
Monday, more than 50 vendors showed up for the sixth protest. They waved signs and chanted slogans outside the firm’s building while IntellecPro lawyers, 12 hired guards on hand, ordered in lunch.
“We are trying to run businesses here. They don’t have any proof,” declared one 37-year-old vendor in a red coat, a fake Dolce & Gabbana handbag on her arm. She refused to give her name, saying she already faced enough scrutiny.
Asked about her handbag, she insisted: “We don’t read English. We don’t know what the letters mean. We just think it is pretty.”
“We want to be compensated for our losses,” said another vendor, 24, who gave her last name as He. “And we want a public apology.”
Wang, the market’s amiable, 43-year old manager, said he is “stuck in a terrible position.”
“The five brands are saying you are not doing a good enough job in protecting our intellectual property rights. And the vendors are saying you are going overboard in protecting intellectual property rights. But hey, what can we do?” he said. “We would rather be known in the world as going overboard than for not.”
There is little risk of that now. Tourist guidebooks cite Silk Street Market, a seven-story glass box near Beijing’s diplomatic quarter, as one of China’s most popular spots to buy cheap, good-quality knockoffs. With some 1,200 stalls, it attracts 15 million shoppers a year, two-thirds of them foreigners, Wang said.
In the noisy basement, hawkers of leather goods buttonhole passing foreigners, cajoling until all hope of a sale is lost. They chat easily in broken English and can assess a copy’s quality in seconds: The best, rated “super-A,” are almost indistinguishable from genuine products.
Their shelves bulge with fake handbags bearing the designs and tags of Coach, Dolce & Gabbana, Chloe and other famous companies which, Wang said, “have not come to us with a complaint.”
Fake Gucci and Louis Vuitton bags are still offered, but hidden inside cupboards; buyers are invited to seal the transactions outside. “There is too much pressure on right now,” whispered one vendor, a few yards from a stall shrouded in a grey curtain.
Xu Shengzhong, the vendors’ lawyer, tries to portray his clients as too ignorant to distinguish fake goods from real or to recognize brand names. “They have no idea this says Louis Vuitton,” he insisted, tapping a brown wallet with the brand’s distinctive logo.
More potent than such subterfuges, though, may be the threat of social unrest. The police, saying their first priority is to maintain order, organized a meeting between some vendors and Hu, IntellecPro’s senior partner, according to the firm’s spokesperson. It went poorly.
The merchants lectured Hu on the need for intellectuals like him to respect workers, while Hu tried to defend his patriotism, according to an audio CD made from one vendor’s clandestine cellphone recording.
“These ordinary people work for decades, to their deaths! How can you say you are patriotic?” demanded one vendor.
While he sympathizes with the vendors, Wang said, “the Silk Market must fundamentally change” and shift its focus from counterfeited goods to genuine pearls, silks, home-grown brands and tailoring services. Last year, the market introduced its own line of products, warning counterfeiters to stay clear.
Wang only hopes the shoppers change their habits, too. At present, “they want the knockoffs,” he said ruefully. “You can see it in their eyes. That is the brutal reality.”
1 comment:
A standoff over knockoffs in famed China market
By Sharon Lafraniere
27 February 2009
BEIJING: Any tourist who has stepped foot in this city’s famous Silk Street Market can testify that it is home to some of the wiliest, most tenacious vendors who ever tried to pawn off a fake handbag on a naïve foreigner.
So when the market managers temporarily shut down 29 stalls this month for selling counterfeit goods, no one expected the merchants to quietly acquiesce to the loss of business.
“We expected trouble,” said Zhao Tianying, a legal consultant with IntellecPro, a Beijing intellectual property firm representing five foreign luxury-brand manufacturers who sued the market for trademark violations. “But we never imagined this.”
The vendors have responded with the same ferocity with which they nail down a sale. Dozens of them have staged noisy weekly protests at the law firm, mocking the lawyers as bourgeois pawns of foreigners. They have confronted witnesses who had provided evidence of trademark violations and filed their own countersuit, claiming only the government can shutter a business.
A few characters scrawled in pencil on the wall outside IntellecPro’s office sums up their message: “We want to eat!”
The skirmish between the crafty but mostly uneducated hawkers and five of the world’s best known producers of designer goods is part of a much bigger fight over China’s vast knockoff industry. American movie, music and software firms alone estimate that Chinese pirated goods cost them more than $2 billion a year in sales. Any successful product is likely to be illegally copied in China, warns the U.S. Embassy’s Web site.
China’s government has pledged to crack down and faces increasing pressure to show progress. But some doubt much will change until China graduates from manufacturing goods to designing them and has more to lose than to gain.
The Silk Street Market case suggests that change is slow and painful.
It has been four years since Burberry, Gucci, Chanel, Louis Vuitton and Prada first sued the market’s operator, Beijing Silk Street Co. Ltd., and individual vendors for trademark violations. Only this month did the legal pressure produce tangible results.
As part of a court-mediated agreement, the market’s managers agreed to curtail the stalls of offending vendors, six to eight at a time, as punishment for pirating. George Wang, the firm’s general manager, said the manufacturers would renew their suit if sales of counterfeits were not curtailed in six months.
In response, dozens of vendors descended on IntellecPro’s office on Feb. 4, occupying the reception area for hours while the police tried to mediate, Zhao said. The next day, she said, they stormed past the receptionist, banged on the walls and swore at the staff. The firm’s senior partner, Hu Qi, was afraid to go home and slept in a hotel for three nights.
Monday, more than 50 vendors showed up for the sixth protest. They waved signs and chanted slogans outside the firm’s building while IntellecPro lawyers, 12 hired guards on hand, ordered in lunch.
“We are trying to run businesses here. They don’t have any proof,” declared one 37-year-old vendor in a red coat, a fake Dolce & Gabbana handbag on her arm. She refused to give her name, saying she already faced enough scrutiny.
Asked about her handbag, she insisted: “We don’t read English. We don’t know what the letters mean. We just think it is pretty.”
“We want to be compensated for our losses,” said another vendor, 24, who gave her last name as He. “And we want a public apology.”
Wang, the market’s amiable, 43-year old manager, said he is “stuck in a terrible position.”
“The five brands are saying you are not doing a good enough job in protecting our intellectual property rights. And the vendors are saying you are going overboard in protecting intellectual property rights. But hey, what can we do?” he said. “We would rather be known in the world as going overboard than for not.”
There is little risk of that now. Tourist guidebooks cite Silk Street Market, a seven-story glass box near Beijing’s diplomatic quarter, as one of China’s most popular spots to buy cheap, good-quality knockoffs. With some 1,200 stalls, it attracts 15 million shoppers a year, two-thirds of them foreigners, Wang said.
In the noisy basement, hawkers of leather goods buttonhole passing foreigners, cajoling until all hope of a sale is lost. They chat easily in broken English and can assess a copy’s quality in seconds: The best, rated “super-A,” are almost indistinguishable from genuine products.
Their shelves bulge with fake handbags bearing the designs and tags of Coach, Dolce & Gabbana, Chloe and other famous companies which, Wang said, “have not come to us with a complaint.”
Fake Gucci and Louis Vuitton bags are still offered, but hidden inside cupboards; buyers are invited to seal the transactions outside. “There is too much pressure on right now,” whispered one vendor, a few yards from a stall shrouded in a grey curtain.
Xu Shengzhong, the vendors’ lawyer, tries to portray his clients as too ignorant to distinguish fake goods from real or to recognize brand names. “They have no idea this says Louis Vuitton,” he insisted, tapping a brown wallet with the brand’s distinctive logo.
More potent than such subterfuges, though, may be the threat of social unrest. The police, saying their first priority is to maintain order, organized a meeting between some vendors and Hu, IntellecPro’s senior partner, according to the firm’s spokesperson. It went poorly.
The merchants lectured Hu on the need for intellectuals like him to respect workers, while Hu tried to defend his patriotism, according to an audio CD made from one vendor’s clandestine cellphone recording.
“These ordinary people work for decades, to their deaths! How can you say you are patriotic?” demanded one vendor.
While he sympathizes with the vendors, Wang said, “the Silk Market must fundamentally change” and shift its focus from counterfeited goods to genuine pearls, silks, home-grown brands and tailoring services. Last year, the market introduced its own line of products, warning counterfeiters to stay clear.
Wang only hopes the shoppers change their habits, too. At present, “they want the knockoffs,” he said ruefully. “You can see it in their eyes. That is the brutal reality.”
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