Commentary: "Wangzhihe" case boosts Chinese companies' morale

MUNICH -- When the Bavarian Supreme Court ordered a German company to stop pirating the logo and trademarks of the century-old Chinese "Wangzhihe" brand, it took the judge a mere five minutes to read the ruling.

But as a major trade player which has entered the World Trade Organization for over 7 years, the first win by a time-honored brand in defending its intellectual property rights overseas came a bit too late.

The victory may significantly help other Chinese companies defend their rights also as they compete in international markets.

The trademark infringement case concerning the "Wangzhihe" brand is merely the tip of an iceberg involving the pirating of Chinese trademarks abroad, a fact overshadowed by Western media reports about intellectual property rights violations in China.
The British daily Financial Times on Wednesday reported on its front page that two individuals have registered at least 60 renowned Chinese trademarks in Canada. "Chinese companies are falling victim to trademark pirates abroad," the newspaper said.

According to China's State Administration for Industry and Commerce (SAIC), there have been more than 2,000 cases involving the pirating of Chinese trademarks overseas since the 1980s with a cost of about 1 billion RMB (about 147 million U.S. dollars) in losses each year.

What's regretful is that very few Chinese companies have resorted to lawsuits to defend their legitimate rights overseas.

The landmark "Wangzhihe" case took a key step by making Chinese companies aware that they can defend their rights overseas by filing lawsuits. This awareness is a must for Chinese companies as they participate in international markets and make their trademarks known around the globe.

Wolfgang Festl-Wietek, the German lawyer who represented the Wangzhihe Food Group, warned after the ruling against Okai, a German food import and export company, that Chinese companies should realize the importance of intellectual property rights protection before entering overseas markets.

"They should plan in advance, they should apply for trademark registration in time, before their products enter the European market," Festl-Wietek said.

Beijing-based Wangzhihe Food Group discovered in 2006 that its trademark and logos had been pirated by Okai when it prepared to register them with the German government ahead of an effort to explore European markets.

Li Jianchang, a director-general with the SAIC, said recently that foreign companies applied to register more than 17,000 trademarks in China in 2008, while Chinese companies applied for just 2,059 trademarks abroad the same year.

Chinese companies should learn to use international rules and laws to protect their rights.

Ever since China joined the World Trade Organization, Chinese companies and their foreign counterparts have been playing under similar, if not identical, rules.

Wangzhihe Food Group without question owns the trademark for "Wangzhihe" and Okai, to no one's surprise, lost the lawsuit.

There are judicial, social and cultural differences between China and other parts of the world, Chinese companies, however, should employ local legal know-how to defend their rights.

As a matter of fact, the protection of intellectual property rights is a long-term process for the Chinese companies that are exploring international markets. It takes confidence and patience to be successful because a lawsuit in Europe may last several years.