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Here’s Why Brand Protection in Emerging Markets Matters

Estimated reading time: 3 minutes, 21 seconds

When one thinks of “counterfeit goods,” some may associate with street side peddlers and shady, dimly lit back rooms found off of NYC’s Canal Street, or what was once Beijing’s silk market. Few would think of chain supermarket distribution or even franchised store-front businesses. According to a 2016 World Trademark Review article, “Counterfeiting, piracy and IP infringement have assumed epidemic proportions, largely due to technological advances and globalisation.”

Take, for instance, India’s “Woodland” footwear brand and the “Cocoberry” frozen yogurt chain which resemble “Timberland” and “Pinkberry” in a multitude of ways, notably either brand’s logo and their product. Predictably, neither Timberland nor Pinkberry think imitation is the highest form of flattery: the similarities have prompted Timberland to speak out against this perceived infringement of its intellectual property.

True, there are uncomfortable similarities, including Woodland’s 1993 launch in India which coincides with the reinvention of Timberland as a lifestyle brand in the West. Still, confrontations on doppelganger branding, when it happens under a separate brand name – are rare, with the notable exception of Gucci’s recent suit against Walmart over luggage with a similar insignia associated with the iconic luxury brand.

Between companies where the similarities are more nuanced, as with Cocoberry and Pinkberry, says the NYT, some argue protests of infringement are a veiled attempt for Western brands to gain competitive control over India’s emerging market. The article claims that, though Pinkberry faces competition from other frozen yogurt brands such as Red Mango in Korea and the U.S., Pinkberry only seems concerned with product similarities between itself and Cocoberry, which has a foothold on the growing Indian consumer market. However, the claim that Pinkberry is solely concerned with protecting its brand in an emerging market that it hopes to capture is false, evidenced at least in part by Pinkberry’s series of lawsuits against “copy-cat” competitors in the U.S.

Whether these Indian brands copied or otherwise infringed on other brands’ property is hard to determine, but Western companies tread a fine line in confronting similar brands in emerging markets, as blatantly seeking vengeance or legal retribution may actually jeopardize their future in that market, as consumers may support their national brands over unfamiliar Western ones.

Companies have also struggled to protect their brands in China, a global capital of counterfeiting and IP infringement. China has become “a Mecca for cheap knockoffs;” Charles Scholz, Asia director of the security consulting firm Kroll Associates, claims that as much as 70% of Chinese consumer goods are counterfeits, costing foreign firms an estimated $20 billion in lost profits.

This year, Nestle fell victim to copyright infringement in China. In January, Chinese authorities raided several factories that were producing condiments and seasonings that were then branded as Nestle products. Further, soy sauce was made using dirty tap water and industrial spices unfit for human consumption.

In 2016, Chinese e-commerce giant Alibaba was added to the U.S. “notorious markets” list due to the prevalence of counterfeit goods sales.

According to some, brand protection attempts may be futile given the prevalence of piracy and IP infringement in emerging markets and the refusal of the Chinese and Indian governments to effectively crack down. However, there are measures that businesses can take to protect their brands.

Businesses can start by registering for trademarks in China, a process that adheres to global standards, thanks to both China and India’s inclusion in the World Trade Organization. Many foreign businesses neglect this crucial step. Chinese and Indian IP laws have seen considerable improvements in recent years but cannot be enforced if businesses do not register for trademarks. Businesses should then register their trademarks with Chinese and Indian Customs, which can regulate the shipment of goods from China and notify businesses if they have discovered counterfeit goods. While taking these steps can help deter IP infringement, it is worth noting that it typically takes 15-24 months for businesses to obtain patents in both China and India.

Both the Chinese and Indian cases have demonstrated the importance of prioritizing brand protection in emerging markets.

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