China IPR SME Helpdesk - In Vino Veritas: Getting Practical; market monitoring and alternative enforcement strategies
“It is hopeless. China is the size of the USA. Population over four times. They counterfeit everything, everywhere. Nothing can be done. If my wine is counterfeited, I have zero chance.”
Your writer quivers every time these phrases are uttered. On every occasion I have to freeze my tongue, whilst controlling eye roll.
It cannot be denied China has a penchant for counterfeiting. But for a wine owner, of any size, or finance, to throw in the towel, implicitly conceding their product is copyright free is a nonsense. This notion is about as foolish as purposely leaving home with one’s front door wide open.
For 25 plus years I have worked in China against counterfeiters of many different consumer goods. Whilst this does not qualify me to oracle status, I probably have more familiarity than the bloke the other end of the bar. The purpose of this article, therefore, is to dispel hot air and waffle by setting out some simple pointers for wine owners to consider.
Whether your wine is already on the market in China, or just planned to be, checks need to be carried out to see if your product can be found. Given most consumer product is available on the internet, the job is not complicated. Forget western search engines such as Google; they do not dig deep enough. Use www.baidu.comas it is powerful, and delves deep into Chinese websites and language nuances. Baidu’s downside is irritating pop-up advertising, and no English auto translate, so for that just cut and paste text into Google.
There is no need to discover what the Chinese name of your wine might be. Just search using the words on your label; the prestige of foreign wine is the original name, and not a Chinese translation.
What to do if you find suspect wine? Continue searching to see if there are other wines from your competitors. If so, talk to them and share information. When it comes to counterfeiting, you and your competitors are uniquely on the same side. But, under no circumstance let them make any inquiries about the problem. Often wine importers, or those at the top of the supply chain are responsible for counterfeiting. Innocent or not, they need to be kept in the dark as you work through the next steps.
Be sure the wine in question is counterfeit. Calculate back from the sales price to your sales price taking account shipping, 50% taxes and 50% dealer mark-ups. Obtain a bottle through numerousinexpensive English speaking companies on the internet offering mystery shopper services.
When you obtain wine to analyse, carefully study the label and capsule for any print irregularity. But just as importantly, look at the glass inscriptions and dot-codes moulded into the bottle base. You will immediately be able to identify if it is your bottle. Contrary to belief, Chinese glass manufacturers are incapable of counterfeiting a bottle perfectly, to include the colour. Of course taste the wine, but the result will not, alone, be relevant. Chinese enforcement authorities will react to visible obvious inaccuracies, as opposed to the subjectivity of taste.
At this point you are probably gazing into space wondering if all this is real. All I can advise is stick with it. If you want to succeed in China it must be treated in a way beyond all imagination. China is a top to tail project. Immerse yourself, and do not treat it just as a place to receive orders and then sleep until, hopefully, the next. Your job is as much sleuth, as being a wine seller.
Never forget that periodic small orders from China can be a lead to counterfeits. All too often imports are made to obtain paperwork to authenticate counterfeits. For example, one genuine imported bottle can become a thousand copies.
Having established that your wine has been counterfeited, preferably locate an intellectual property attorney in China who has a department that specialises in counterfeit control. Searching google in English is best as this guarantees the firm will have language capabilities. One such firm is www.fipa.cn but there are many.
An alternative approach to brand protection
The good news is help awaits you in China, but perhaps not in the way to be expected. Intellectual property law is one important way to enforce your rights but arguably, for wine, using the consumer protection route can be extraordinarily beneficial. In other articles on this website explanations have been offered on registering trademarks, and whilst this is important, one cannot always rely on the Chinese authorities to invest tax payers’ money to protect your rights, under criminal law.
From an enforcement perspective consumer protection law is a powerful weapon not to be overlooked. Over the years there has been many food and drink scandals and not a week passes without another horror story. As a consequence China has bulked up local and regional enforcement offices. The last thing China needs is people being hospitalised due to profiteering bandits selling contaminated goods. Public enforcement authorities without doubt prioritise protection of the public, ahead of intellectual property.
The two main enforcement departments are the Food and Drug Administration www.sda.gov.cn and a quite separate department known as Quality Inspection and Supervision www.aqsiq.gov.cn. Both have over lapping responsibilities but similar powers of raiding and seizures. Their job is to protect the public from fraud, and be sure safe product is being sold.
Apart from the obvious problems of dangerous food and drink, these authorities also tackle mislabelling. For example, goods claim to be from one source (say, you) when in fact they are from another unauthorised source. Officers will raid, seize product from offenders and then prosecute in order to protect the public on the basis what is written on the label, must be what the product is, which by definition includes origin.
In short, the result achieved for you comes through the protection of the Chinese public, and not just through public officials working to protect your intellectual property rights, and business. You win, the officials win, the public win, and the badguys lose.
Accessing these authorities is straightforward as they have offices throughout China. Any member of the public, including foreigners, may file a complaint, which can be a simple letter comprising a few paragraphs. This is best done through a local lawyer, or better still an intellectual property specialist such as a trademark attorney who, by definition, is less expensive. Offices with English capabilities are found on Google. It is recommend you approach three for quotes. Pick the one who makes the job sound simplest, and be sure they understand you are making a consumer complaint, not an intellectual property complaint.
Very possibly the attorney will require a power of attorney stating you authorise them to make the compliant. They may also recommend providing copies of your Chinese registered trademarks to the authority. This is helpful, although not procedurally necessary.
Apart from the attorney fees, you will not be exposed to any other fees as the matter will be processed and financed by the public purse. The authority will also prosecute offenders, or more likely impose administrative fines and penalties.
Quite possibly the offender you have identified will be a reseller, but it is the job of the authority to trace back to whomsoever else in the supply chain, all the way to the producer. The Chinese authorities are noted for their persuasiveness in extracting information out of offenders. Only the brave or stupid do not cooperate.
Once an authority is underway with the case, your chosen attorney must keep in touch with them to track progress. But remember, your case will be handled as a criminal matter, and whilst you are pivotal in bringing the matter to their attention, you are not directly party to the criminal action, and therefore not entitled to be kept informed.
The above is really a snap-shot of how to tackle problems you may have, or could be faced with in the future. No one will claim this is at all straight forward, but it has to be tackled. All too often I have come across the attitude that a few wine sales a year to China, which are then counterfeited, are sales that would otherwise have not been made. This ostrich syndrome must not be you. China’s wine making skills are advancing which could easily result in the counterfeits tasting every bit as good as your wine, but not from you.
Selling wine to China is not just a business of receiving orders and shipping wine. Rather it is a complete project that must be embraced, watched and nurtured. Any lesser approach is a recipe for disaster. And who wants that when the country is the biggest wine growth market, the likes of which will never be witnessed again, in any country on this planet.
Existing Wine Importers
Chinese E-Commerce Wine Retailers
Searches should include the term 葡萄酒, the Chinese for ‘wine’ along with the English or Chinese name for the wine/brand.
This article was written for the China IPR SME Helpdesk by counterfeiting expert and investigator Nick Bartman. Nick has over 25 years of experience personally investigating and putting a stop to counterfeiting activities, 20 of which he has spent working in China for some of the biggest brands and household names. Over the last 6 years he has worked almost exclusively to expose wine counterfeiters and spread the word throughout the wine industry and has developed an extensive knowledge of the strategies and methodologies used by wine counterfeiters in China today.
© 2015 Nick Bartman