Silk Street - On-going Intellectual Property Rights Disputes

On-going Intellectual Property Rights Disputes

One of the political incentives behind the transfer of the old Xiushui Market to the current Silk Street establishment was related to the unregulated sales of fake goods according to Yin Xiaobo, an assistant to the General Manager of the Economic Management Center of the JianGuoMenWai Community in Chaoyang District, Beijing. The new Silk Street complex was viewed as a more effective battleground in regulating and eradicating trademark infringements among private retailers. On November 23, 2004, the Beijing Administrative Bureau for Industry and Commerce and Beijing Commercial Bureau listed the new Silk Street as one of nine streamlined markets in Beijing in accordance with "Strengthening Market Supervision and Crackdown on False Commodities." Since the grand opening on March 19, 2005, Silk Street has conducted reforms in an attempt to regulate and crack down on violations of IPR in the market. Despite the efforts, counterfeits were still found inside the shopping center. As a result, five global brand-name giants, which included Prada, Chanel, Louis Vuitton, Gucci and Burberry were granted compensation of 20,000 yuan (US$2500) each from the landlord and five of its stall holders on April 14, 2006. On June 7, 2006, a deal was signed with European luxury name brands promising to evict tenants found violating trademark rights. The Intellectual Property Rights Protection Fund of 30 million yuan (US$3.8m) collected from its tenants was established by Silk Street in a collective effort to curb infringements of trademark rights. On August 30, 2006, 30 vendors received 10 million yuan (US$1.3m) in rent refunds from that fund as a reward for respecting IPR protection laws. An estimated 80 per cent of vendors at Silk Street have acquired trademark authorization as of August 2006.