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Luxury brands win trademark lawsuit
By Liu Mo in Beijing and Cao Li in Shanghai (China Daily)
Updated: 2006-04-19 06:23

Five major luxury brand names succeeded in safeguarding their trademark rights yesterday in a lawsuit against the Beijing-based Silk Street Market.

The Beijing High People's Court upheld a previous ruling by Beijing No 2 Intermediate People's Court last December that backed the claims of Prada, Chanel, Louis Vuitton, Gucci and Burberry.

The ruling requires Silk Street Market to compensate 20,000 yuan (US$2,500) to each company for trademark rights infringement.

"We are satisfied with the final judgement, with the exception of the amount of compensation." Wang Yadong, legal counsel for the five brand owners, told China Daily.

Initially, each of the five demanded compensation of 500,000 yuan (US$62,000) each.

Wang Zili, a representative for the market, expressed his disappointment over the final ruling, saying it was near impossible for operators to eradicate all counterfeiting in such a large market.

Huai Xiaofeng, vice-president of Beijing High People's Court, said the court would go to great lengths to crack down on counterfeiters of foreign products.

Each of the five brand owners found counterfeits of their products in the Silk Street Market and presented them as evidence of counterfeiting in a co-ordinated act in 2005 aimed at protecting their intellectual property rights (IPR).

They filed a collective complaint against the market in a call for the prohibition of counterfeits last May. But the fakes remained on sale at the market one month later, and the brand owners decided to bring both the market and the individual stores before the court.

The ruling against the market can be attributed to its inaction to address the concerns, according to Zhang Lumin, presiding judge of the IPR tribunal with the Beijing High People's Court.

The court launched an anti-counterfeiting campaign recently to step up efforts for IPR protection.

Meanwhile, Louis Vuitton is suing Carrefour's Shanghai joint venture for selling fake handbags.

A hearing was held yesterday at Shanghai No 2 Intermediate People's Court, in which the French fashion designer demanded about 600,000 yuan (US$74,000) in compensation from Shanghai Carrefour Lianhua Supermarket Co Ltd.

On December 12 last year, a Louis Vuitton employee found three different handbags either with its trademark or patterns similar to those on Louis Vuitton bags in the supermarket along downtown Wuning Road.

They were being sold at 49.9 yuan (US$6.2) each, while an authentic Louis Vuitton handbag is about 9,000 yuan (US$1,125).

The employee bought one of the bags and two more the next day with local notary officials. He then reported it to the local industry and commerce administration, which confiscated 37 other handbags from the supermarket on December 13.

Lin Yi, the lawyer of Louis Vuitton, accused the supermarket of violating the plaintiff's trademark right on purpose, which brought severe damage to the brand and the company's reputation.

"The accused company sold the fake products fully understanding of the fact that Louis Vuitton is recognized as one of the top luxury brands in the world," said Lin.

Liu Daorong, the lawyer of Shanghai Carrefour Lianhua Supermarket Co Ltd, said only one of the three designs, which had the Louis Vuitton trademark, broke the law. He said there were no similarities between the other two designs and Louis Vuitton bags.

An employee from Shenzhen Runquan Co Ltd, who provides handbags to Carrefour, gave evidence at the court.

"I had only 60 handbags left when Carrefour ordered 100 at the end of last year," said Han Chunyue.

"I went to a market beside Chenghuang Temple and bought 40 from a street vendor at 20 yuan (US$2.5) each.

Han said he had never heard of the Louis Vuitton brand until being told.

Liu, the lawyer, noted that the supermarket would like to compensate Louis Vuitton, but that 600,000 yuan (US$75,000) was too much.

A verdict was not reached yesterday.

(China Daily 04/19/2006 page3)