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Silk Street Market Loses Appeal in Trademark Case
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Five major luxury brand names succeeded in safeguarding their trademark rights yesterday in a lawsuit against Beijing-based Silk Street Market.


The Beijing High People's Court upheld a previous ruling by the Beijing No. 2 Intermediate People's Court last December that backed the claims of Prada, Chanel, Louis Vuitton, Gucci and Burberry.


The ruling requires Silk Street Market to pay 20,000 yuan (US$2,500) in compensation to each company for trademark infringement.


"We are satisfied with the final judgment, with the exception of the amount of compensation." Wang Yadong, legal counsel for the five brand owners, told China Daily.


Initially, each of the five demanded compensation of 500,000 yuan (US$62,000).


Wang Zili, a representative for the market, expressed his disappointment at the final ruling, saying it was near impossible for operators to eradicate counterfeiting in such a large market.


Huai Xiaofeng, vice president of Beijing High People's Court, said the courts would go to great lengths to crack down on counterfeiters.


Each of the five brand owners found counterfeits of their products in the Silk Street Market and presented them as evidence of counterfeiting in a coordinated act in 2005 aimed at protecting their intellectual property rights (IPR).


They filed a collective complaint against the market last May calling for the prohibition of counterfeits. But the fakes were still on sale at the market a month later, and the brand owners decided to bring both the market and the individual stores to court.


The ruling against the market can be attributed to its inaction to address the concerns of the plaintiffs, according to Zhang Lumin, presiding judge of the IPR tribunal with the Beijing High People's Court.


Meanwhile, Louis Vuitton is suing Carrefour's Shanghai joint venture for selling fake handbags.


A hearing was held yesterday at Shanghai No 2 Intermediate People's Court, in which the French fashion designer demanded about 600,000 yuan (US$74,000) in compensation from Shanghai Carrefour Lianhua Supermarket Co Ltd.


On December 12 last year, a Louis Vuitton employee found three different handbags either with the LV trademark or patterns similar to theirs on sale in the supermarket along downtown Wuning Road.


They were being sold for 49.90 yuan (US$6.2) each, while an authentic Louis Vuitton handbag costs about 9,000 yuan (US$1,125).


The employee bought one of the bags and two more the next day with local notary officials. He then reported it to the local industry and commerce administration, which confiscated 37 other handbags from the supermarket on December 13.


Lin Yi, lawyer for Louis Vuitton, accused the supermarket of deliberately violating the plaintiff's trademark, an act that caused severe damage to the brand and the company's reputation.


"The accused company sold the fake products knowing that Louis Vuitton is recognized as one of the top luxury brands in the world," Lin said.


Liu Daorong, the lawyer of Shanghai Carrefour Lianhua Supermarket Co Ltd, said only one of the three designs, which had the Louis Vuitton trademark, broke the law. He said there were no similarities between the other two designs and original Louis Vuitton bags.


An employee from Shenzhen Runquan Co Ltd, who provides handbags to Carrefour, gave evidence in court.


"I had only 60 handbags left when Carrefour ordered 100 at the end of last year," according to Han Chunyue.


"I went to a market beside Chenghuang Temple and bought 40 from a street vendor at 20 yuan (US$2.5) each.


Han said he had not previously heard of the Louis Vuitton brand.


Liu noted that the supermarket was willing to pay compensation to Louis Vuitton, but argued that 600,000 yuan (US$75,000) was too much.


No verdict was reached yesterday.


(China Daily April 19, 2006)

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