Beijing's Silk Street loses piracy battle
(Shanghai Daily)
Updated: 2006-01-06 09:56

Five top luxury brands won the first copyright infringement case against vendors and the operator of the Beijing Silk Street shopping mall, a landmark bazaar known for selling cheap goods and counterfeit products.

A sales assistant stands beside a Louis Vuitton bag in LV's Shanghai flagship store. Five top luxury brands won the first copyright infringement case against vendors and the operator of the Beijing Silk Street shopping mall. [Shanghai Daily]

The Beijing 2nd Intermediate People's Court ordered the Beijing Xiushui Haosen Clothing Market Co, the landlord of Beijing Silk Street, and five vendors to pay a combined 100,000 yuan (US$12,391) to Chanel SA, LVMH Moet Hennessy Louis Vuitton SA, Prada Holding NV, Burberry Group Plc and PPR SA's Gucci for selling knockoffs of their products and violating their intellectual property rights.

The court ruled that Beijing Xiushui Haosen must assume joint liability as the market manager because it was not able to prove its products were legally authorized by brand distributors, according to the verdict.

The defendant hasn't decided whether to appeal, and no other similar lawsuits against other Chinese shopping malls are under consideration, according to lawyers from both sides.

"The verdict will have an instructive effect nationwide for both courts and market operators when they deal with similar cases," said James Luo, a lawyer at the Baker & McKenzie law firm's Beijing Office, who represented the plaintiffs.

"The joint liability means we could ask for Xiushui Haosen to pay the compensation if we fail to get it from the vendors, and we hope it will prompt them to monitor and inspect vendors more timely and effectively." The five luxury brand makers collected evidence by buying scores of pirated handbags and wallets at the market. They then notified Xiushui Haosen that the vendors were violating trademark rights.

The mall conducted periodic inspections but could not shut down the illegal sales, according to Xiushui Haosen's marketing director, surnamed Du.

"It's really difficult for us to take effective measures as a monitor instead of the Administration of Industry and Commerce," he said.

The Silk Street shopping mall, located in Beijing's downtown, rents space to more than 1,500 vendors.