The digital world, the growth of e-commerce, and globalisation are combining to offer businesses an array of opportunities when it comes to reaching new consumers and markets. Many brands have their sights set on China, in particular, on account of the growing affluence of the population and its huge production capacity. It is estimated that there are now over 250 million online shoppers in China (double the figure of 3 years ago) and e-sales in China have overtaken those of the U.S., the country that has traditionally topped the global ranking. Moreover, it is estimated that online sales in China will increase 150%, reaching the figure of 5.4 billion Euros by 2018.
|The e-commerce platforms with the most traffic in China are the following:|
The dark side of these new opportunities for global business is the exponential growth in the sale of counterfeit goods, almost 80% of which originate in China and Hong Kong, according to data from the Interpol and U.S. customs authorities. The sale of counterfeit goods does not only damage consumers, it also tarnishes the brand’s image and consumer perceptions, and has a very negative impact on the revenues of the company that owns the brand. However, while China is both a land of opportunities and threats for brands, it should be pointed out that important progress has been made in combating counterfeiting and enforcing patents and registered trademarks. The Chinese government is very aware of the problem of counterfeit goods in China and the Quality Brands Protection Committee (QBPC) in Shanghai works closely with the law enforcement authorities to carry out regular macro operations against counterfeiters and illegal vendors.
In this context, it is clear that the risks of marketing your products online in China are as high as the opportunities they pose for businesses. Irrespective of the efforts of local authorities to combat the counterfeiting of trademarks, in the digital arena, companies should adjust their trademark protection strategy, not just in a bid to achieve their business targets for the region, but to increase their revenues from international markets. This would entail the development of an effective protection programme against patent and trademark infringements.
Best practices for protecting your trademark in China
Some of the following best practices should be implemented in order to effectively protect your trademarks. This will allow you to hinder the business and sales channels for counterfeit goods and make it more difficult for consumers to find illegal copies of your goods on the Internet.
Knowing which e-commerce platforms are the most visited in China is the first step in developing a good protection strategy. Counterfeiters monitor the websites with the most traffic and it is therefore no surprise that a large part of trademark infringements and the withdrawal of counterfeit goods occur in the most popular online markets.
Consult a local lawyer or legal advisor to check what your rights are in relation to your registered trademark and get them to assist you in managing your needs in the local market. China has a single classification system which is different from the one used by the World Intellectual Property Organization (WIPO) and it is therefore important to be familiar with the procedure for enforcing your intellectual property rights, particularly in light of the significant changes in Chinese legislation in this area that came into force on 1 May 2014.
Make yourself a ‘difficult target’ for counterfeiters by regularly requesting the removal of the counterfeit goods advertised on online markets, thus generally reducing the number of infringements of your patents or trademarks.
Use technology to help you identify patterns and similarities with product lists advertised on online markets so that you can detect large and persistent vendors that require special monitoring. The success of your protection strategy will depend on a precise assessment of the magnitude of the trademark infringement. This will identify the basis for the setting of priorities.
Review all applications for the removal of counterfeit goods with the help of experts in trademark protection who speak the local language and have a good knowledge of the cultural nuances of the region.
Be willing to change your internal processes in order to adapt them to local requirements and the guidelines for each online market.
Cooperate closely with experts who have knowledge of the local culture and the contacts needed to adapt oneself quickly to any changes in regional policy as soon as these occur.
Examine the coverage models of the different online markets and their compliance record in China before selecting a partner for the protection of your trademark. The brands that are most successful at combating counterfeiting are the ones that work with local online markets to build up trust, as this leads to higher compliance levels when it comes to protecting your intellectual property.
Use the information obtained in combating counterfeiting to gain a better understanding of consumer habits and identify market weaknesses and areas where their expectations are not being met.
Defending yourself is therefore the cornerstone of a successful strategy for trademark protection. With the continuous growth of digital channels and China’s emergence as a new consumer market, as well as the world’s «factory», the success of your trademark protection strategy will depend on your ability to address the counterfeit goods being sold in China’s largest e-commerce platforms. Counterfeiters prefer to target the most vulnerable trademarks; therefore, focusing on your intellectual property rights and enlisting the support of technology and legal experts with specific knowledge of the area in order to attain higher compliance levels and deter counterfeiters affords companies the most effective protection for their trademark in this region.