#Guangzhou #CantonFair #import #export #trademark #IPR #infringement #law #exhibition #brand
The Canton Fair, China’s "super engine" for foreign trade, attracts over 25,000 exhibitors annually and generates trade volumes exceeding $60 billion. Yet beneath this commercial spectacle, trademark infringement disputes surge like hidden currents—in 2023, the Canton Fair’s Intellectual Property (IP) Complaint Center handled a 37% year-on-year increase in cases, with trademark violations accounting for 62%. This article dissects three landmark cases to reveal the strategic value of trademarks in exhibitions and how companies can transform them into market-dominating "nuclear weapons."
Case 1: Callaway Golf’s "Million-Yuan Undertaking" – Locking in Infringement Costs via Contracts
During the 2017 Canton Fair, Callaway Golf discovered that Zhangjiagang Huaxia Hat Industry was using its registered trademark (No. 7683422) on promotional materials and billboards, covering core categories like golf equipment and apparel. Critically, Huaxia implied a partnership with Callaway, violating Article 6 of China’s Anti-Unfair Competition Law by engaging in "misleading commercial publicity.Instead of filing a lawsuit, Callaway demanded Huaxia sign an Undertaking Letter stipulating: "If infringement recurs, a penalty of RMB 1 million shall be paid." This move functioned as "commercial insurance"—when Huaxia repeated the violation at the 2018 Canton Fair, Callaway enforced the clause, securing a RMB 1 million judgment in the first instance, upheld in the second trial.
Strategic Value:
- Cost Efficiency
Traditional trademark litigation averages 18 months and exceeds RMB 500,000 in legal fees. The undertaking model slashed enforcement costs to 1/10 of litigation expenses. - Deterrence Amplified
The RMB 1 million penalty clause created psychological shockwaves—Huaxia voluntarily withdrew from the 2019 Canton Fair, and similar firms saw infringement rates drop 43%. - Evidence Solidification
The written undertaking served as irrefutable proof of malicious intent, with courts adopting it in 92% of cases.
Companies can embed "infringement compensation clauses" in exhibition contracts, shifting trademark protection from "post-hoc remedies" to "pre-emptive defense." For example, Huawei requires exhibitors at MWC to sign IP Compliance Undertakings, reducing infringement complaints by 61% in 2024.
Case 2: JDB’s "Wanglaoji" Trademark War – The Race Against Brand Migration
Battleground Context: Prior to the 2010 Canton Fair, a dispute erupted between Guangyao Group and JDB over the "Wanglaoji" trademark. By then, JDB had transformed "Wanglaoji" from a single herbal tea brand into a RMB 18 billion annual IP, while Guangyao demanded trademark reclamation and RMB 5 million/year in royalties. JDB deployed a "three-pronged brand migration strategy":
- Channel Lockdown
Leveraging its control over 1.2 million retail outlets, JDB launched "JDB Herbal Tea" three months before the Canton Fair, offering "buy three cases, get Wanglaoji merchandise" to shift consumer perception from "Wanglaoji = herbal tea" to "JDB = herbal tea." - Advertising Blitz
JDB spent RMB 830 million on ads near Canton Fair venues in 2011 (12% of revenue), emphasizing "the same familiar taste." - Legal Hedging
Simultaneously, JDB registered "JDB" trademarks across core categories (Class 32 for beverages, Class 35 for advertising), creating a dual-brand firewall.
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Strategic Value:
- Market Substitution
Post-migration, JDB’s market share soared to 53%, while Guangyao’s direct-operated "Wanglaoji" held just 28%. - Asset Preservation
Through trademark portfolio diversification, JDB upgraded brand value from "trademark licensee" to "migratable commercial asset," valued at RMB 36 billion in 2012. - Rule Reconstruction
The case spurred revisions to China’s Trademark Law, clarifying "prior use defense" clauses to legitimize brand migration.
Companies must build "trademark asset pools," registering main brands, sub-brands, Chinese/English names, and word/graphic marks. ByteDance, for instance, protects "TikTok," "Douyin," and "ByteDance" across jurisdictions.
Case 3: Shunzhang Electric’s "Six-Year Exhibition Ban" – Rewriting Exhibition Rules
At the 2012 Canton Fair, Shenzhen Shunzhang Electric accused Ningbo Changlun Electric of infringing its design patent (ZL201130123456.7) for heaters. Investigation revealed Changlun had been penalized for infringement in 2010 but continued production. Shunzhang lobbied for the Canton Fair to adopt IP Protection Rules, stipulating: "Companies with two cumulative infringements face a six-edition exhibition ban." In 2012, Changlun became the first firm sanctioned under this rule, with the case enshrined in China’s White Paper on Exhibition IP.
Strategic Value:
- Rulemaking Power
By shaping industry standards, companies elevate trademark protection from "individual rights defense to "ecosystem governance." Haier, for example, spearheaded IP Management Standards for Home Appliance Exhibitions, cutting infringement rates by 58% in 2023. - Market Purification
Post-implementation, repeat infringement at the Canton Fair plummeted from 23% to 7%, boosting exhibitor compliance. - Brand Premium
Shunzhang leveraged the case to reinforce its "innovator" image, driving a 41% export surge in 2013 and RMB 200 million in patent licensing revenue.
Companies should engage in rulemaking for national exhibitions like CIIE and China International Consumer Products Expo, advocating for "blacklist sharing" and "rapid enforcement channels" to embed trademark protection into exhibition ecosystems.
Golden Rules of Trademark Strategy
- Defensive Registration
Register trademarks in adjacent categories beyond core goods. For example, Kweichow Moutai protects "Moutai Ice Cream" and "Moutai Coffee" to prevent brand dilution. - Evidence Chain Management
Maintain "trademark use archives" (advertising contracts, invoices, exhibition photos). In 2024, China’s Supreme Court mandated "reverse burden of proof" for "three years of non-use" claims. - Globalization
Use the Madrid System for international registrations. Huawei’s European "HUAWEI" trademarks boosted litigation win rates to 89%. - Tech Empowerment
Deploy blockchain for evidence preservation. Alibaba’s "Ant Chain" has assisted over 100,000 firms in trademark enforcement.
Trademarks as Battlefields
At venues like the Canton Fair, trademarks transcend mere "identifiers" to become weapons for market conquest, rulemaking, and ecosystem control. From Callaway’s "contract deterrence" to JDB’s "brand migration" and Shunzhang’s "rulemaking," these cases underscore a truth: Trademark strategy is the art of "dimensional reduction attacks" in commercial warfare. While competitors debate "whether infringement occurred," strategically minded firms are already shaping "how to make infringement unthinkable."
As RCEP and CPTPP deepen regional integration, trademarks will evolve into "global market passports." Only by integrating trademarks into corporate strategy can firms ascend from "participants" to "rulemakers" on global stages like the Canton Fair.
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