China Cracking Down on Olympic Piracy
By CHARLES HUTZLER
The Associated Press
Sunday, October 30, 2005; 3:20 PM
BEIJING -- When the Xi'ao Center office complex went looking for tenants, it hung out a 10-story-high banner boasting bookings by corporate sponsors of the 2008 Olympics: "The Choice of Olympic Organizing Committee Partners."
Chinese Olympic officials were livid. The company found itself pilloried in the media, ordered by Olympic and government officials to remove the 10-story-tall banner and fined an undisclosed sum.
Normally a haven for pirated products and trademark rip-offs, China has mounted an unusually aggressive campaign to prevent unauthorized use of Olympic symbols. The communist government is devoting money, manpower and political capital to the effort, treating it as a national priority.
"If the government fails in this, the International Olympic Committee might feel it was a mistake to let China hold the Olympics," said Huang Yaling, a professor at Beijing Sports University and consultant to the city on the 2008 Games.
The result isn't perfect. At Beijing tourist landmarks, peddlers sell knockoff caps bearing the five-ring Olympic logo for a dollar. An adult Chinese Web site offers male potency pills brand-named "Olympic Male Treasure."
But China's vigorous effort to defend Olympic wares contrasts with its poor record in protecting foreign companies' brands. Chinese manufacturing pirates have gone beyond DVDs of Hollywood movies and are becoming sophisticated enough to turn out industrial pumps and even runs a global export industry of copycat auto parts centered in the eastern port city of Ningbo, Chinese officials say.
The scale is such that Chinese piracy costs American businesses an estimated $2.5 billion-$3.8 billion a year, according to the U.S. Trade Representative. It is further complicating trade relations at a time of tensions over Chinese currency controls and a swelling trade surplus with the United States.
Officially, the government maintains that after years of building a legal framework to safeguard intellectual property rights, it is now making progress in enforcement, a chronic weak spot. Privately, a Chinese trade official involved in intellectual-property policy says the trends are bad and China is feeling the pressure in trade negotiations.
Against that dismal backdrop, the Olympic protection campaign shows what China can achieve when it wants to, but also raises questions about why the success isn't replicated elsewhere.
"The perception is that there's a lack of political will," said Christopher Smith, a lawyer in the Beijing office of the American firm Baker & McKenzie.
From the outset of its bid for the 2008 games, the government knew that stewardship of the Olympic brand would test its mettle.
The International Olympic Committee and host cities of the Games rake in hundreds of millions of dollars selling sponsorships, broadcasting rights and authorized knickknacks, and in its bid proposal, Beijing promised they would all be "fully protected, and the marketing of Olympic products free from infringement violations." Within a year of being awarded the Games in mid-2001, the city and national governments issued special regulations on Olympic intellectual property.
Explicitly banned were the unauthorized use of phrases such as "Olympiad" and "Beijing 2008" and the motto "Faster, Higher, Stronger." Handbills were distributed with pictures of the logos of the Olympics and the Beijing Games, the Chinese character jing in the name Beijing drawn like a dancing stick figure.
In Beijing and elsewhere, local commerce regulators followed suit, circulating warnings to retailers. Authorized shops, 16 of them in Beijing so far, are being set up to sell approved Olympic
Action and inaction are evident at two Beijing markets known for their pirated name-brand clothing. Few Olympic-branded products are on display. Market employees inspect stalls every morning and confiscate any illegal Olympic products, but ignore the copycat Louis Vuitton handbags and North Face parkas, shopkeepers said.
Selling Olympic products is "just not permitted," said a stall-keeper, so she hides her $6 Olympic T-shirts behind display racks of fake Columbia sportswear.
The Xi'ao Center _ twin glass and steel towers located near many of the venues under construction for 2008 _ got its promotional idea because two tenants, the Bank of China and China National Petroleum Company, are official partners of the 2008 Games, said Ma Hui, a spokesman for the center's developer, Beijing Shengshi Zhaoye Real Estate Development Co.
Such partnerships cost tens of millions of dollars and permit the paying sponsor to put the Beijing Games logo on company products. "We tried to be very careful in choosing our words," said Ma. "It was really hard for us to do so." And it failed. By using the term "Olympic Organizing Committee," the company violated the regulations on protecting the Olympic brand, the Beijing Organizing Committee for the Olympic Games said in a statement.
Neither side would disclose the amount of the fine, reported by official Web sites as 50,000 yuan ($6,000).
About 370 cases of infringement are reported to the organizing committee, known as BOCOG, every year, said Liu Yan, deputy director of BOCOG's legal department. But the actual number is perhaps 10 times higher, he said, because local authorities do not report many cases.
Crucial to keeping officials and merchants on their toes, said Liu, is a government propaganda campaign that places news stories about protecting Olympics in the media every month.
"It's like a game of cat and mouse," said Liu. "If there are a lot of cats about, the mice won't dare come out."
But broadening the net to other pirated goods isn't easy.
Huang, the sports university professor, said the government excels at keeping a sustained focus on one well-defined issue at a time _ right now the Olympic brand. But it designates only one week a year to fostering public awareness of other intellectual property rights.
Moreover, said the BOCOG's Liu, the Olympics logo is easy to protect because it's perhaps better known even than Coca-Cola or Kodak. "The Olympics have such impact the world over," said Liu. "No single business can match it in leaving an imprint on people's minds."
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