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Alert on the misappropriation of intellectual property

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Intellectual property misappropriation is a problem that originated in China and is rapidly developing in Europe. This misappropriation consists of a Chinese brand trying to acquire intellectual property rights on counterfeit products. Maître. Jérôme Tassi, whom we had already interviewed in the PicRights case, sheds light on this accelerating phenomenon. As an informed observer for several years, he tells us about several instructive examples and reveals the reasons for them.

The misappropriation of intellectual property

Misappropriating intellectual property is, in the case of Chinese companies, akin to parasiting. These companies counterfeit legitimate objects, brands, and logos and register their counterfeit models with the European authorities. Suppose they slip through the net of the Intellectual Property Protection Office on the one hand, and the legitimate brand does not keep watch. In that case, the Chinese company ends up with a legitimate property title for a counterfeit model.



In 2020, China realized 29000 intellectual property registrations in Europe



China is No. 1 in the ranking of intellectual property filings in Europe

The misappropriation of intellectual property goes hand in hand with the development of Chinese companies on the European continent. With 3200 filings, China was in 2016 the 7th largest country in the number of filings in Europe. In 2020, China was in first place with 29000 filings. In other words, China has become the most active nation in Europe regarding intellectual property protection. Even if the costs in Europe are, as Maître Jérôme Tassi reminds us, relatively inexpensive (from 850€), the generated expenses are not insignificant. It would not be unlikely that the Middle Kingdom’s “rise in power” reflects a coordinated political wish.

ORIGINAL COPY
1 LEGO original trooper COUNTERFEIT lego TROOPER
2 Fingerlings Original Counterfeit Fingerlings contrefaçon
3 bateau Lego original counterfeit ship Lego bateau contrefaçon
4 Adidas shoe model counterfeit Adidas shoe
5 Logo TÜV Rheinland original counterfeit TÜV Pheintand
6 fridge SMEG original counterfeit SMEG fridge

 


Examples of misappropriation of intellectual property

The Chinese are not lacking in imagination when it comes to copying the most famous creations of European brands. Toys are, of course, a prime target for these intellectual property pirates.

One can only be surprised by the attempt to protect the copy of Lego’s “Trooper,” whose resemblance to the original is more than striking.

The “Fingerlings,” small creatures to be attached to the fingertips, were introduced to the market in 2017 by WowWee, a Canadian company. Chinese knockoffs didn’t take long. The Chinese didn’t even try to differentiate themselves when filing (see example 2).

More curious, the Chinese also try to protect copies of fridges (see example 6 of the SMEG fridge) or falsify logos. In example 5 the brand “TÜV Rheinland” becomes “TÜV Pheintand” and the slogan “geprüfte Sicherheit” (tested safety) becomes a bad phonetic imitation (“geprutta Sicharhoit”).


 

Why do Chinese companies try to “protect” their counterfeits?

The Chinese try to protect their counterfeits from limiting the risks of “takedown” on the one hand and from deceiving the customs on the other hand.

Takedown is when an e-commerce platform removes a reference from the catalog at the request of the rightful owners. To avoid this, Chinese counterfeiters use their intellectual property deposit to “prove” their right and oppose the “takedown.” The injured brand can only obtain the latter via a court decision, which creates costs and a delay that the Chinese brand uses to pursue its illegal activities.

The intellectual protection of a counterfeit object is also used to mislead customs officials. The words “registered brand” or “registered design” are indeed indications of good faith.


How to protect against this parasite?

This IP infringement is complicated and costly. A few years ago, brands were content to have counterfeits seized and destroyed. Today, the fight extends to the courts since they have to sue for invalidity. In 2020, Lego had to file between 20 and 25 invalid actions.
It is, therefore, an additional cost for the brands, a cost from which they get absolutely nothing, as Maître Jérôme Tassi reminds us.

 

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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