China: anti-counterfeiting agreement retailers - fashion houses

Peter Mandelson, EU Commissioner for Trade, and Chinese Vice Minister for Trade Ma Xiuhang, took part in the signing of a memorandum of understanding by the owners of luxury fashion and sports brands in Europe and the owners of retail stores in Beijing.

'The protection of intellectual property is the milestone of our economic relationships', Mandelson explained, and the agreement 'is very important and should represent a significant step toward maintaining trust in these markets. The Commissioner added, 'I hope that further progress can be implemented on this basis'.

According this understanding, a retailer's business will be temporarily suspended the first time he is found guilty of selling counterfeit products. If the breach is reiterated, he will be barred from the profession. The owners of retail stores in Beijing also undertake to comply with another series of standards that make it compulsory for retailers to respect intellectual property rights.

The initiative follows the ruling (January 2006) issued by the High Court of the People's Republic of China in favor of European brands Burberry, Chanel, Gucci, Louis Vuitton and Prada, which had taken legal action against the Silk Street Market chain. According to the Chinese judges 'the owners of department stores have a responsibility to take effective and timely steps against individual retailers accused of infringements'.

In the meantime, the Xinhua agency announced that another European brand, Lacoste, is suing the Silk Market in Beijing, which sells shirts with the counterfeit crocodile logo. The French brand has requested the company that manages the market, the Beijing Xiushui Haosen Clothing Company, and the retailers who run the stores, pay 100,000 yuan (12,500 dollars) for the illegal use of the logo.

(Source: Il Sole 24 Ore, Agi)