30 Aug
2019

"Infringers will become more sophisticated in using new apps and technology"

Louis Vuitton (China) Company Ltd

How did you choose a career in brand protection and what has been the key to your success?

It was serendipity that I started my career in brand protection. After my call to the Ontario Bar, I was in Taiwan studying Mandarin and working at the Canadian Trade Office in Taipei. In Hong Kong, I had the good fortune to be hired by the IP head at Deacons law firm. My career began during the 1995 US-China talks on possible US 301 trade sanctions. For brand protection in China, it is important to understand the Chinese language and culture, as well as China’s laws and practice. For me, it helped to be open minded, adaptable and persistent.

What has been your biggest career and what can others learn from how you overcame it?

One challenge was the transition from in-house counsel at a high-tech US firm, Microsoft, to a French luxury fashion company, Louis Vuitton. Microsoft was aggressive in its IP protection and used the media to raise awareness of its enforcement actions and policy positions. Louis Vuitton is also vigorous in its IP protection but in a discreet manner. Being flexible helped me to adapt to a different corporate culture and industry. I also had to consider how to be strategic in litigation in order to make an impact. Practitioners should make time to reflect, gather different views and take prudent risks. Being assertive, flexible and pragmatic can help you to manage enforcement issues in China and elsewhere.

Shanghai has a pool of corporate brand protection professionals who share best practice and operate collegially. How does peer engagement and knowledge sharing assist in individual development?

By engaging with peers you can learn about the different priorities of other brands and how other professionals handle similar cases and initiate joint actions. Knowledge sharing contributes to professional development by helping you to reflect on your IP enforcement programme and methodology, while spurring you to do better. From a personal perspective, there is a shared sense of purpose and camaraderie in the continuous battle for brand protection in China.

What are the main brand enforcement challenges for a company in the luxury goods industry in China and how are these best overcome?

The Chinese market is enormous in terms of geography and the number of consumers, producers, exporters and sales channels. China has the world’s largest trademark registry and with record annual increases in the number of applications, there are also increasing numbers of bad-faith applications and trademark squatters.

For a luxury brand, the challenge is to reduce the visibility of counterfeits and imitations, online and offline, while protecting the image of the brand.

The desire for the Louis Vuitton brand extends beyond handbags and clothing. We must fight infringers who ride on the reputation of the brand and use our well-known trademarks on dissimilar goods or services (eg, auto accessories, mobile phones, karaoke clubs and bars).

To do so, we must be aggressive and strategic in enforcement. We initiate civil actions to obtain judgments recognising the well-known status of our core trademarks and obtain cross-class protection against goods and services that are unrelated to Louis Vuitton. These judgments in turn support administrative opposition and invalidation actions against bad-faith trademarks and design patents. We sue criminally convicted manufacturers to impose maximum costs. We also pursue infringers using new sales channels (eg, e-commerce apps) to obtain precedents and create a deterrent.

In what ways do you think the brand protection landscape will change in the next five years, and how should rights holders prepare?

Infringers will become more sophisticated in using new apps and technology. At the same time, I believe that the Chinese government will take strong measures to improve IP protection for domestic and foreign rights holders. Under the amended Trademark Law, bad-faith applications filed without intent to use should be rejected. For wilful or malicious infringement, the maximum punitive damages will increase by up to five times the actual loss, the infringer’s profits or the reasonable royalty rate. Maximum statutory damages will also increase from Rmb3 million to Rmb5 million.

I am optimistic that the Chinese courts will be strict against infringers, be more willing to grant investigation orders and asset preservation orders for rights holders, and award higher compensation. The compulsory enforcement of judgments has improved in the past few years and this trend should continue. Brand owners should prepare to use the IP system to enforce their rights, learn lessons and move forward.

Louis Vuitton (China) Company Ltd

4001, Plaza 66, Phase 1

1266 Nanjing Xi Lu

Shanghai 200040

China

Tel +86 21 6133 2888

Fax +86 21 6289 2701

Web https://www.louisvuitton.com/

Peter Chong

Director, Civil Enforcement, IP Department, Greater China

[email protected]

Peter Chong obtained a BA from the University of Toronto and an LLB from Queen’s University, and was admitted to the Law Societies of Hong Kong and Ontario.

Mr Chong joined Louis Vuitton Hong Kong in 2007. Based in Shanghai since 2010, he handles civil litigation and IP contracts. He was director of corporate affairs, interoperability and standards, Asia-Pacific at Microsoft Hong Kong, joining as a corporate attorney for anti-piracy and government relations, North Asia.