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SCMP Reporter

Case to test China's pledge to protect intellectual property

An American firm is suing the state-backed organisers of a Shanghai trade show for breach of contract in a case that is set to test China's latest commitments to improve protection of intellectual property rights.

California-based bicycle manufacturer Dahon operates plants in Shenzhen, Taiwan and Macau and holds about 90 mainland-registered design patents for folding bicycles.

The company alleges that more than a dozen rival mainland exhibitors at the 16th China International Bicycle Fair in Shanghai in April displayed copies of its designs.

In the first case of its kind in the mainland, Dahon is targeting the show's organisers and claims they are liable for the infringement under new Ministry of Commerce guidelines for the protection of intellectual property at trade fairs issued in March.

The company, which estimates millions in losses due to patent infringement in the mainland, has also raised the case with US trade officials in Beijing and Washington.

'I see this almost like a fight to the finish for my business,' said chief executive David Hon. 'If they can go around looting my intellectual property like this in China, why even come to China? Why not just go somewhere else like India to setup an R&D shop and promote my product?'

The company is seeking a 150,000 yuan refund of the exhibition fees it had paid and a public apology from the show's organisers.

The lawsuit names three state-backed parties: Shanghai International Exhibition, a local unit of the official China Council for the Promotion of International Trade  (CCPIT); the Sunrise Group, a subsidiary of state-owned and Shanghai-listed Phoenix; and Shanghai Xiesheng Exhibition, a unit of the China Bicycle Association.

Dahon  first filed a lawsuit in Shanghai's Huangpu district court in May, but the court refused to try it because it said only one of the defendants, Xiesheng, was based in the district.

It refiled the suit  last month at the Hongkou district court and expects a decision from the court this week as to whether or not it will accept the case.

The mainland hosted some 3,800 trade fairs last year, according to official statistics. The value of deals  signed at Guangzhou's semi-annual Canton Fair alone accounted for about 10 per cent of annual nationwide exports.

Still, trade shows remain a hot spot for piracy of copyrights, trademarks and design patents.

In March, central government agencies, including the Ministry of Commerce, General Administration for Industry and Commerce, National Copyright Administration, State Intellectual Property Office and the CCPIT issued joint national guidelines for protecting intellectual property at trade fairs.

The new regulations require exhibition organisers who receive complaints over intellectual property theft to collect evidence and notify the local commerce and related government bureaus which have the authority to remove copycat product and bar erring exhibitors from a trade show.

Dahon claims the organisers failed to respond to the company's complaints and, as such, were in breach of the contract between organiser and exhibitor.

'[The new policy] does impose upon the operators of these fairs to take care of the IP situation,' said Mark Cohen, the intellectual property attache at the US Embassy in Beijing. 'It requires co-ordination between the enforcement authorities and the fair operators.'



Bicycle firm sues trade fair organisers