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In recent decades trademark squatting has been one of the most common issues that foreign brands face in China. This became commonplace because Chinese trademark protections prioritise whoever registered for a trademark first — unless no party registers, in which case rights go to whoever can prove first use in the case of a dispute. This principle often resulted in losses for those who technically used a name first, simply because they didn’t register first.
Today, however, the main issue for designers is how to protect against plagiarism of the clothing designs themselves. The China Fashion Industry Intellectual Property Conference survey released last year showed 60 per cent of designer brands said they had been plagiarised, and 25 per cent were aware of counterfeit versions of their work. In China’s legal system, fashion brands’ intellectual property rights are protected by China’s copyright law, trademark law and patent law, as well as anti-unfair competition law. However, lawyers and brands say the protection is limited and outdated.
Luo Yucheng, founder of Chinese designer brand Calvinluo, which participated in Paris Fashion Week in 2020, describes the different infringements the brand has faced: “One kind is a product that uses our design, but doesn’t use our label; one kind we didn’t design or produce at all, but does use our label; and one kind is products with similar styles and prices, which misled consumers into thinking they are products we produced and sold.”
Lei Liushu, one of the founders of designer label Shushu/Tong, has faced similar plagiarism: “Sometimes internet influencers end up wearing clothes they think are ours, they even tag us on Weibo — but in fact the clothes they bought are fake.” This is especially likely when a designer creates something that really blows-up with consumers — it’s the norm for e-commerce platforms to explode with imitations and counterfeits of variable quality, sold to consumers at lower prices than the original.
Chen Xuzhi, founder of the label Xu Zhi, believes that it’s about more than just financial loss, and that behind every piece of clothing that moves someone is a designer’s devotion to work and deep thinking: “To speak a bit more seriously, [an imitation] first of all tramples on the original design; secondly, it takes profit from the brand that should be getting it.”
The legal system
When a designer creates a piece, they can protect their rights by applying for a design patent. In China, however, the time it takes to apply for the patent naturally conflicts with the life cycle of the vast majority of fashion items. It can take between six and eight months to apply for a design patent, with an application fee of RMB 500 (around $70), and as in the US, the item is only protected after the application is granted. “Because the clothing cycle basically lasts a quarter, maybe four months, having to go through a six-month process is very challenging for us,” says Luo Yucheng.
To address this issue, Shanghai-based creative platform Tube Showroom, under the banner of DIA Creative, held the “Roundtable Discussion on Intellectual Property Protection for Independent Designer Brands”. In this forum, Zhang Yanwei, the resident guest lawyer of the forum, called for brands to apply for patents on the classic styles they return to, as well as frequently used fabrics, decorations and other elements to protect future designs.
In France, the Intellectual Property Code includes a stipulation for “creations of the seasonal industries of dress and articles of fashion”, therefore automatically protecting it as a type of work. China’s copyright law does adopt this automatic system — but without more specific legal provisions, the meaning is only interpreted as protection for drawings of clothing designs. When the drawings are taken from 2D into 3D space, turned into a factory prototype or ready-made item, the law regards it as something needing separate protection. In order to achieve legal protection, therefore, the law requires new details and analysis of the 3D item.
Without clear provisions to protect clothing, designers encounter situations in which one party accuses a second of copying their design, only to have the so-called plagiariser argue that they merely referenced the design in question. Without lawyers’ assistance throughout the process, the road to rights protection can be an onerous one. Lawyer Huang Zhengxue, of the Hongqiao Zhenghan Law Firm in Shanghai, who has worked in IP legal services for 16 years, suggests “protecting clothing design by splitting it into constituent elements — such as specific patterns, cartoon characters, artistic text design, et cetera — that is, expressing the elements of originality in clothing design may also achieve the effect of safeguarding rights.”
Another issue is that the cost of protecting IP rights is higher than the cost of infringing on them. Take a typical case of design infringement — if someone steals a brand’s image for commercial profit, the court may only award the infringed claimant compensation ranging from a few hundred to a few thousand RMB. However, for a copycat, the amount they’re ordered to pay is far less than the profits they obtain from copying.
Chen Wenjun, of the Shanghai branch of Long’an Law Firm, says brands often have to weigh up whether pursuing legal action is actually going to benefit them: “In clothing infringement cases, it’s difficult to determine the amount of profit made by the infringer, making it difficult to prove the losses to the rights holder,” he says. “When profit and loss cannot be accurately calculated, although the copyright laws stipulate a maximum compensation of RMB 500,000 (around $70,400), under normal circumstances, the court will calculate the compensation based on the categories of items infringed upon, thus lowering the amount of compensation significantly, even to the point of not being enough to cover attorney fees.”
Some Chinese designers have subsequently taken to social media to express claims by publishing their own findings, via Weibo, Wechat and other platforms. However, lawyer Zhang Yanwei says when designers discover a rights infringement it’s best to keep a cool head, collect and preserve relevant evidence and then seek the assistance of a legal professional as soon as possible. This avoids missing the best window of time for gathering evidence and prevents complications of hasty accusations that the accused could frame as slander.
Zhang followed this advice with specific suggestions for safeguarding rights, which include: investigation and evidence collection, platform complaints, letters from the company or lawyer, administrative complaints, criminal reports and civil litigation.
Investigation and evidence collection is the first step to take before introducing any other measures. She suggests different responses depending first of all on whether the infringer’s sales are low or high. If they’re low, and are an online store, she recommends following the initial evidence collection by submitting a platform complaint, using platform rules to delete links, deduct points or even possibly institute a ban.
If sales volume is low and the store is offline, on the other hand, it may be time to send a letter from the company or company’s lawyer. If the infringer has a large sales volume, and if it’s possible to find a warehouse or factory, brands can choose between platform complaints, administrative complaints or criminal reports, with each of these three paths having their own considerations.
Lastly, if sales volume is high but it’s difficult to find a warehouse or factory, the first step can be followed by submitting a platform complaint, then sending a letter from a lawyer. Zhang says only if negotiation fails should brands proceed to file a civil lawsuit.
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