Starbucks has recently won a landmark lawsuit in China against a local rival known as Xingbake at US$62,000 (see the transcript in MSNBC article here). This has profound implications to the China market. Particularly in the retail market, it is well-known that all kinds of branded products have their copycat equivalent in China. That has led to some companies hesistant to enter into the Chinese market.
Contrary to the US market with well-protected trademark and intellectual property laws, legislation in China is still in the formulative phase. The landmark lawsuit serves to reassure the big brands out there that there exist legal protection towards their products.
In the past few years, the Chinese government has been under pressure from the US and European Union to crack down on intellectual property rights infringements and the piracy industry. An interesting statistic is that China is responsible for 70% of the world’s pirated goods and most companies (of course, the US ones) claim that they have lost about $250 billion a year to piracy. Whether the rest of pirate brands will suffer the same fate as Xingbake, it remains to be seen since it can be just a cosmetic dressup to show that the China government is serious about trademarks and intellectual property.
Is it going to help in stop more imitation and encourage innovation?
We will leave that to your thoughts.
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
