The challenges of China: an investigator's perspective
According to the 2009 Report on EU Customs Enforcement of Intellectual Property Rights, 54 percent of infringing goods detained at the EU external border originated from China. Chinese immigrants are illegally trafficked into the UK in order to produce and distribute counterfeit DVDs, and Chinese organised crime gangs import counterfeit cigarettes and rolling tobacco from China. In 2009, customs seized more than 110,000 pirated games from just one Chinese company importing goods to the UK.
There is no shortage of challenges facing brand owners.
Cybersquatting and vexatious registrations
Many infringing domain names are registered by entities in China. We have worked on a number of cases where Chinese entities have registered clients’ brand names as trademarks in China in the hope that the Western brand will offer a significant sum for the registration.
Clients who choose to pursue legal remedies find themselves mired in a lengthy and expensive legal process. There is no guarantee of success. Commercial imperatives may dictate that the better course of action is to buy the registration via an anonymous intermediary.
Counterfeiting
A high proportion of counterfeits come from China. One of the main routes to market is the Internet. Most brand owners will know of websites offering copies of their products. The registrants will appear to be based in the UK, but in the majority of cases, the registrant details are fictitious and the website content is dictated by the IP address of the visitor to the site. Any contact number is likely to be a ‘follow me’ number routed to a call centre in China.
It is becoming increasingly necessary for brand owners to have reliable investigators to consult on issues in China. Unfortunately, investigators who are paid a success fee for locating and raiding counterfeit factories may work with counterfeiters to ensure a steady supply of easy targets. Once raided, they may be up and running again the next day.
Investigators working in China face a number of difficulties. China’s geography means that covering the whole country is unusually difficult, and conducting on-the-ground enquiries can mean expensive travel to remote locations.
While Mandarin is spoken by more than 70 percent of the population, there are numerous other languages, including Cantonese, Min, Xiang, Gan and Hakka. That poses problems both with gathering information and presenting it to Western clients. Many Chinese words have no direct translation into English. A Western investigator without relevant language skills is therefore at a considerable disadvantage.
Most investigation is a combination of public record research and source interviews. In China, far less information is a matter of public record. More importantly, it is not cultural practice to discuss business with third parties with whom there is no pre-existing relationship. Often information can only be obtained through face-to-face meetings, leading to investigation costs that are surprising to Western brand owners.
What are the solutions?
When planning investigation work in China, brand owners should consider:
