Beijing retail markets and foreign brand owners in the sportswear and fashion industries has signed an agreement to jointly fight the sale of counterfeit goods.
Ma Xiuhong, Deputy Minister of Commerce, and Peter Mandelson, European Commissioner for Trade, attended to the signing ceremony Wednesday.
The agreement sets out a new framework for trademark owners and landlords to cooperate in the fight against sales and offers for sale of counterfeit goods under a proposed "two-strike rule".
"The protection of intellectual property goes to the heart of our economic relations," Mandelson said. "That is why this initiative is highly significant and should be a crucial step to maintain confidence in these markets."
Under the agreement, landlords will agree to suspend the operations of the vendor for a certain period upon receipt of evidence of first violation by the vendor. Following a second report of the sale of counterfeit items of any of the participating brands by the same vendor, that vendor's lease would be terminated and the vendor evicted from the market.
The landlords of major Beijing retail markets, such as Silk Street, 3.3, and Hongqiao, have also agreed to work with the brand owners to develop a new standard rental agreement which clarifies the obligations of vendors to respect intellectual property rights and sets out the potential consequences for counterfeiting in greater detail.
If successful, brand owners will pursue similar agreements with landlords of major markets in other leading cities in China, including those in Shanghai, Guangzhou and Shenzhen.
The agreement was made possible after five judgments issued by the Beijing Higher People's Court against the landlord of the well-known "Silk Street Market" in response to complaints by five European luxury brands, Burberry, Chanel, Gucci, Louis Vuitton and Prada.
China has generated huge numbers of statistics during the past week to epitomize its achievements in fighting piracy, counterfeiting and other IPR infringement activities. In the past five years, Chinese police have recorded more than 6,700 intellectual property rights (IPR) infringement cases, involving 350 million yuan (43.75 million US dollars), and have broken up a number of international criminal networks.
"Xiushui market will take the lead among landlords to join foreign brand owners in the fight against counterfeit goods by pushing vendors to change their business direction," said Wang Zili, general manager of Xiushui market.
Wang Zili said Xiushui had two main markets: one selling traditional goods such as silk and tea to allure overseas customers, and the other selling fashionable clothes and ornaments to attract domestic customers.
Commenting on the agreement on behalf of the participating brand owners, trademark counsel for Louis Vuitton, Nathalie Moulle Berteaux said, "Counterfeiting in China of famous foreign brands has grown in the last few years in tandem with China's tremendous economic development. Today's agreement is a private sector solution to the harms caused by counterfeiting and will hopefully result in significant changes in Beijing markets, in time for the 2008 Olympic."