An Italian household goods company was planning to enter Asian markets. With certain level of famousness in Europe and in the Middle East, the company was looking for new markets in Asia-Pacific, including China, where it had almost no presence yet.
The SME’s expansion strategy included finding new business partners in the region who could assist the company with logistics, distribution and marketing. The Board of Directors decided that the easiest way to making relevant contacts was through participation at trade fairs, such as the Canton International Import and Export Fair in China. This strategy would be implemented throughout 2020.
To this end, during 2019 the company's legal department secured the company’s intellectual property rights (IPR) to safely attend trade fairs in China and other countries in Asia. The SME registered its trade marks at the CNIPA, including the name of the company as well as the names of those products to be exhibited. Advertising materials, such as brochures, images and drawings were voluntarily registered at the Copyright Protection Centre of China. Furthermore, the SME also applied to be granted relevant design and innovation patents in China. By the end of 2019 the SME had obtained the relevant design patents. Finally, the sales team attending exhibitions was properly trained and the SME was ready to attend trade fairs.
Unfortunately, the Covid-19 pandemic heavily disrupted the SME’s strategy. However, as online trade fairs quickly gained popularity, the SME decided to participate at the 2020 online Canton Import and Export Trade Fair, as it gathered participants from all across Asia. Relying on the preparations made in the previous year, the SME managed to create the exhibitor’s profile in the corresponding categories, being one of the few EU SMEs present. Their categorisation as foreigners brought them a lot of attention, since the design of the exhibitors search engine made it possible for buyers and attendees to differentiate between local (Chinese) and foreign exhibitors.
However, not everything went smoothly for the SME. During the trade fair, one of the members of the trade fair team, whose specific role was to study competitors, discovered that a Chinese company was selling products with an identical design to the ones offered by the Italian company.
Several attempts were made to contact the Chinese company, but these were all unsuccessful, either due to the platform's chat feature or the infringer’s unwillingness to communicate. The Italian SME was also not able to schedule a video conference with the infringing company’s employees.
Eventually, the legal department took the initiative to defend the IP rights of the company and the following steps were taken:
Evidence of infringement was secured by two different methods:
- The SME hired a Chinese notary public to attest the offering of the infringing products on the trade fair portal. The SME provided the notary with the link where the infringing products were offered, so that the notary could draft a description, take a screenshot or even download the content of the link to prove in the future the existence of an infringing offer, the exact content and a description of the design.
- Samples of the suspected products were purchased, in order to have in the future the ability to compare the products. An employee of the SME’s legal department asked the Chinese notary to witness the on-line sample purchase transaction remotely so that the whole process of infringing sales could be notarised. The samples were sent directly to the notary´s address so they cannot be changed or altered by any employee of the Italian SME.
The Italian SME also made use of the online complaint mechanism that was provided by the Canton Fair organisers for this purpose. During the complaint session, all the documents and records that proved the SME’s ownership of the design rights in China were presented.
Additionally, the trade marks and the designs were immediately registered at the Chinese Customs Office in order to block any potential infringing exports and thus neutralise the overseas sales that the Chinese company could have decided to make.
After the Chinese company was notified of the existence of a complaint against it through the online complaint mechanism, the products were voluntarily withdrawn from the Canton Fair online exhibition portal.
The Italian company is now preparing the next steps for protecting their IP. The fair was successfully concluded and the Chinese company was effectively barred from continuing to offer the infringing products during the trade fair. However, the infringer still remains a potential threat to the Italian SME as it may still continue to sell these infringing products on the Chinese domestic market, affecting the SME’s potential future market share.
Thanks to the information provided by the National Enterprise Credit Information Publicity System combined with the data obtained at the trade fair, it was relatively easy to identify the offenders, their address and their shareholders. A local law firm in China was contacted to start the corresponding civil actions to prevent future infringements from continuing.
- Protect your IP in the country organizing the trade fair. Although the online mode makes it possible for any registered person, from any country in the world, to have access, the most efficient protection procedures are those set up by the trade fair organisers. Note, that you can take action if you have registered your IP.
- Take protection measures that go beyond the trade fair itself. The trade fair only makes the existence of an infringer visible, and although it is possible to remove infringing products from the online trade fair, this does not mean that the malicious company will stop producing and selling the infringing products.
- Register your IP rights at the Customs Office. This is useful against the infringers who are also exporters. Preventing them from making sales abroad damages their commercial capacity as well as the commercial agreements they may have with foreign clients. It will also allow you to protect other markets where, perhaps, no IPR registrations have been made.
- The remote modality of online trade fairs makes it difficult to obtain evidence for future actions, but the purchase of samples is an ideal way to prove the offer and the characteristics of the infringing products.
- IPR protection strategy for online trade fairs is essentially similar to the regular trade fairs, and it should be taken equally seriously.