In the Olympic Logo, China’s Double Standard

By November 7, 2005Trade

Beijing_2008_logo.gif As every US manufacturer can tell you, China has become a knockoff paradise, a near-lawless place when it comes to any kind of intellectual property (IP) protection: patents, copyrights, trademarks, you name it. It’s all just so much stuff waiting to be stolen by some enterprising Chinese manufacturer. It is the dirty little secret, an issue that is common to all manufacturers doing business in China, from the largest software companies to the tiniest machine shops. Many have tales of sending their products to China, only to have them “reverse engineered’ and copied exactly — and mass manufactured — without regard to any patent that might exist. In so doing, China has turned the law-abiding — and IP-respecting — world on its ear.

But now there’s new word of a thriving double standard in China. While they turn a blind eye to the wholesale piracy of US intellectual property, there is apparently one brand that they fiercely protect…

Anyone who’s been to China in the last twenty years can attest to the near-universal availability of pirated DVD’s by the score along with counterfeit Rolex, Piaget, Nike, Louis Vuitton, Gucci, and a host of other designer and universally-recognized manufacturing names. And, it’s not limited only to the “sexier” products. Bemis, the US toilet seat manufacturer, tells of crates of the product being offloaded in South America with their logo and name on the side, “Made in America” proudly stamped thereon. Only one problem: they’re all counterfeits from China. Former Commerce Secretary Don Evans used to tell the story about Wrigley’s’ Gum. The Chinese reverse engineered their recipe, stole the logo and went to retail outlets in China and offered a premium to stores that would sell the knockoff. It’s all part of what NAM President John Engler called, “Grand larceny on a massive scale.” Theft of IP is theft of our innovation, which is the life’s blood of our manufacturing.

What’s an aggrieved manufacturer to do? We have been pressing for a very long time to get China to join the world of law-abiding nations. (Here’s a link to a whole host of anti-counterfeiting efforts). The fight to get China into the World Trade Organization was, well, a fight. However, now that they’re in, it’s time they being acting like other nations who have respect for the rule of law, and for IP. Yet our entreaties to the Chinese have been met by so much hand-wringing. They listen sympathetically, nod, express great, great regret. Indeed they are serious about this issue, they assure us, as they know it is a stumbling block to trade. They are serious about it, yessirree, but somehow they just ain’t making much progress.

Actually, as it turns out, they are making some progress. There is apparently one logo that is inviolate: The 2008 Olympic logo. There was a great story on this topic last week by Wall Street Journal reporter Geoffrey Fowler. It ran in the Washington Post under the headline, “China Keeps Watch Over Olympic Logo“, subhead: “It Is One Knockoff That’s Not Allowed.”

According to the story — and corroborated by Commerce Secretary Gutierrez in his remarks to the NAM Board in September — the penalties for selling counterfeit items with the Beijing Olympic logo are several times higher than normal. Not only are the penalties higher, but the enforcement seems to be unforgiving. “It is the one brand”, says Fowler, “That peddlers can go to jail for stealing.” Recent visitors say it is virtually impossible to find any knockoffs with the 2008 Olympic logo on them.

The Chinese have consistently professed powerlessness to track down counterfeiters of US goods in a country as vast as theirs. We have seen in this morality tale surrounding the logo that they certainly have the ability to enforce the law, and have done so with a vengeance. But what this story tells us is that it is not a matter of power, but a matter of will. If they can crack down on counterfeits of the Olympic logo, they sure can crack down on the wholesale piracy of US logos, trademarks and patents.