Moncler Takes Down Counterfeiter in Chinese Trademark Court
Nov. 17, 2015 (Mimesis Law) — Walk around Manhattan in winter, especially the ritzier parts, and there is a good chance you will bump into someone wearing Moncler winter gear. Stylish stuff, for sure, and popular despite the hefty price tags. As with every other luxury brand, Moncler suffers from counterfeiters, including those based in China, who try and profit off Moncler’s popularity with customers. Dealing with counterfeiters is in many ways a cat-and-mouse game, and luxury brands interested in policing their valuable marks constantly need to shift strategies to remain effective. It has been reported that Moncler has worked to shut down over 1,800 websites selling counterfeit product, giving a sense of the scope of the problem for luxury brands.
For many years, luxury brands had a love/hate relationship with the Chinese market. On the one hand, increasing personal wealth in China coupled with an increased willingness to spend on luxury items has made China an important commercial market for luxury brands. On the other hand, China has a long-standing reputation as the home of counterfeiting, and the working assumption of many was that the Chinese legal system would not be of help in shutting down counterfeiters. At the same time, it is much easier to police counterfeiting by attacking the counterfeiters at their places of production, and hopefully avoid the counterfeit goods hitting the retail markets worldwide at all.
It is not surprising that Moncler took an aggressive approach once it learned a prominent Chinese outerwear label was producing Moncler knockoffs. Moncler put the IP Court in Beijing to the test, arguing that it was entitled to damages under China’s new Trademark Law. Perhaps surprisingly, Moncler won close to $450,000 USD in damages, with the IP Court finding that the China-based counterfeiter was liable for trademark infringement. While the damages may have been modest, this represents a big win for Moncler and other trademark owners plagued by Chinese counterfeiting, and could be a harbinger of greater assistance from the Chinese legal system in policing counterfeiting activity. Dealing with the counterfeiting Hydra requires an arsenal of different approaches, and help at the head from the Chinese IP Court could be a game-changer for luxury brands.
Disclosures and Disclaimers:
Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. Questions or comments can be directed to me at email@example.com. All suggestions are welcome.