INTA 2014: Problems doing business in China
Foreign companies investing in China have great opportunities but should still be wary of widespread piracy and bad-faith trademark registrations, the INTA conference has heard.
During a special forum on how foreign entities can partner Chinese businesses and invest in the market, Kevin Ching, chief executive at Sotheby's Asia, said the problems that plagued China 20 years ago still remain.
“The only difference now,” said Ching, “is that there is more money and opportunities so we need to work harder to overcome it.”
Pointing to an example of bad-faith trademark registration, Ching said that over the last ten years, during which the art-selling company's popularity has increased dramatically in Asia, it has faced a battle with a Chinese businessman named Mr Li.
Li, a salesman, anticipated Sotheby's popularity in Asia and registered several variations of Sotheby's as a trademark in Hong Kong and mainland China, preventing the company from registering its own.
“Li decided to register all variations of Sotheby's in Chinese, including the words Su Fu Be,” said Ching, adding that he had tried to “legitimise” use of name.
Li, who originally sold cars, branched out into art in an attempt to “make people believe” the products were Sotheby's own.
Ching added: “Eventually, after several high court battles, we were able to convince the courts that we had a right to use the name, but we still have not been able to get the trademarks cancelled.”
To help counteract potential problems, trademarks should always be registered in both forms of Chinese (simplified and traditional), as well as in English, the panel said.
During the session, delegates were also told that Chinese companies, while valued at billions, still had a problem with piracy.
One example, given by Laura Young of Wang & Wang in China, was online shopping forum Taobao.
Young said the website was valued at $170 billion, more than global rival Amazon, and had around 200 million users but that more than 80 percent of products on it were pirated.
“You can't deal with that level of piracy,” she said.
However, Vivien Chan, a lawyer at Vivien Chan & Co in Hong Kong, said a lucrative draw could be China's growing consumer market abroad.
Chan said the country's consumption of luxury goods was $116 billion last year, with only $28 billion spent on the mainland.
“China has seen a shift towards a consumer market and is no longer a factory for the world,” Chan said.
The INTA conference runs until May 14.
