I think it is a good news to HKSME which wants to expend their brand name in China. Even HK$500,000 is little money to promote brand name in China. (As our last dairy stated, JDB has spend 12 billion on their brand name building), However, it is also an incentive to HKSME and HK advertisement & PR agents.   

I think if HKSME wants to expend or build up their brand name in China. They need following steps: 

1) Trademark or patent registration in China 

2) To build up the sales channel 

3) To proceed promotional campaign

By the way, HK$500,000 is maximum and support half of the promotional campaign. That means HKSME need to prepare another HK$500,000 or even more for promotional campaign and more fund for operation budget such as building up sales channel, etc. 

There are 2 difficulty for building up brand name in China. One difficulty is to handle the imitators. Another difficulty is to handle large size of map. Actually, Trademark or patent registration in China is 90% successful to protect their brand name. Surely, there are some small imitators may take risk to do the one-time copying. However, at that time, that means the brand name is famous enough. 

Some may misunderstand that patent applications take few days only. Actually, it needs around few years.  

Even size of China Shenzhen region is many times of HK region. Therefore, it is another challenge to a company for how to make promotional campaign to contact their target customers.

Check out details here.

Recently, when I was eating in Chinese restaurant and a waiter gave me a Herbal Tea printed in red and called "加多寶“ (JDB Herbal Tea), it made me curious what was the story behind this red package renamed. Actually, JDB Herbal Tea was called Wong Lo Kat Herbal Tea before. Since in my childhood, it had many advertisements covering all printing and TV advertisement. It was famous in HK in a period then suddenly disappeared in HK supermarkets and convenience stores. However, it has silently covering all restaurants and supermarkets in China. From historical record, the JDB group had purchased the trademark of "Wong Lo Kat" since 1990. Around 20 years, It had over 100 billion revenue in 2008 and it had 150 billions revenue in 2010. The trademark of "Wong Lo Kat" was worth 22 billions in 2006. There were some other similar drink brands from HK to enter China market but they had no such bright result. This legend was ended in 2011 when guang yao group (廣藥集團) had no more authority of this trademark to JDB group. 

We are not commenting from the legal aspect. However, from the economic side, we can find some implications: 

1) Trademark can be cost unbelievable worth or cost nothing. Around 1990, guang yao group (廣藥集團), JDB group and everybody believe "Wong Lo Kat" worth 600K only. However, it is worth 22 billion in 2006. Surely, nobody knows how much it costs after 2020.   

2) JDB Group CEO is smart and brave to buy the trademark of Wong Lo Kat Herbal Tea and promote it to number one drinks in China. However, can he makes another legend by JDB Herbel Tea name? With the old and same equation of Herbal Tea and heavy promotional strategy, some still guess their sales revenue will decrease from 150 billions to 100 billions. There are some critical points to be considered. 

a) JDB Group is still holding the trademark of "Wong Lo Kat" in HK. Even "Wong Lo Kat" faded out in HK market. However, if they keep same name selling in HK market. It makes inland customers confused. The worst situation, when a customer is confused by both name, they will choose the third brand in market. Even the HK market is small, however, it affects those inland customers who always travel between HK and Guang Dong region. 

b)  The sales channel is critical to market share in China. Actually, guang yao group (廣藥集團) has more than thousand medical retail store. Furthermore, it has signed contract with another group for nearly 13K retail selling points in China. That's why they have confidence to collect the trademark of "Wong Lo Kat Herbal Tea" back. With the free rider on strong promotional strategy many years, they only provide enough selling point, then customer will pick them up. Therefore, they spent 7 millions promotional budget only in 2012.

c) The cost of JDB group is heavy when the cost of guang yao group (廣藥集團) is little. Compared to 7 millions promotional budget, JDB group has already spent 12 billions (50% increase compared with last year) to build up their new own brand drink. It does not include other costs such as renew packing, stocks replacing, etc. JDB group has fixed factories for Herbal Tea production while guang yao group (廣藥集團) is contract working with different factories for production. JDB group needs large amount of sales to keep their factory for running. Therefore, they need customers replace JDB Herbal Tea instead of "Wong Lo Kat Herbal Tea shortly. Otherwise, it will make their annul revenue decrease much continuously. 

d) Some believe it is lose-lose situation. When guang yao group (廣藥集團) suddenly diversify its business to drink industry. Actually, guang yao group (廣藥集團) has no production lines but give authority to more than 4 factories for production. It means the quality and taste is a little different. In worst situation, guang yao group (廣藥集團) will make Wong Lo Kat Herbal Tea become no more welcomed by Chinese. and JDB group is also been kicked out from the market. Surely, Guang yao group (廣藥集團) will think it is win-lose situation, Guang yao group (廣藥集團) give up the choice to arise the trademark fee but choose to add this 150 billion side revenue to their 450 billion core business revenue. Compared to JDB group's core business is Herbal Tea, Guang yao group (廣藥集團) still wins in case they get 1% market share only.

The story is totally different in case JDB group keep "Wong Lo Kat" trademark but Guang yao group (廣藥集團) starts their own brand name Herbal Tea. Therefore, we can see the value of trademark is hard to measure.

Related news in Chinese:

news reference 1: http://big5.ce.cn/gate/big5/district.ce.cn/newarea/roll/201207/17/t20120717_23497293.shtml

news reference 2: http://www.singtao.com/yesterday/chi/0821eo02.html

news reference 3: http://big5.jrj.com.cn/gate/big5/finance.jrj.com.cn/industry/2012/09/04031314342020.shtml

history record reference: http://zh.wikipedia.org/zh-hk/王老吉涼茶

1 Oct 2012 was a difficult day for Hong Kong

In a fatal accident, 39 lives were lost. We share our sorrow for lives lost.

If you so wish to paying tribute to those lost, you may go to this site.

APPLE buy more patents for war

I think the great news of patents world in 2012 is APPLE win the lawsuit over SAMSUNG and make it compensation of 10 billion. Even this number cannot be compared with its core business such as iPhone selling. For world famous brand, the winner of lawsuit represents not only the money and the reputation. The result of lawsuit also affects the selling products and the image on customers mind. Therefore, SAMSUNG immediately declare 2nd round of patent war over APPLE once its iPhone support LTE4G. 

It is expected to be 2nd round of patent war soon because APPLE held nothing on LTE4G last year but they hold 318 patent until now. That means, Apple is preparing war and accept the declaration. While SAMSUNG hold 819 patents on LTE4G and lose the 1st round, they must start the war whether for the money or for their image on customer's mind.

News reference (in Chinese).

China trademark "Only if you are interested" 非誠勿擾

Jiangsu Broadcasting Corp was recently sued over a trademark used for one of its most poplar TV shows. Jin Ahuan, an e-business worker, said he registered the trademark 非誠勿擾 - or "only if you are interested" - for matchmaking and marriage services in 2010.

In the same year, Jiangsu TV started a dating game show with the same name, which Jin said infringed his trademark right. But attorneys for the defendant said the two marks "belong to different categories and look different".

As a matter of fact, the movie 非誠勿擾 (translated as If You Are The One in IMDB) was shown in China and all over the world in 2008! The story was about match making that a Chinese man and woman trying to find the right person. So who is infringing whom?

The problem of trademark protection in China

Everybody read about Apple settles iPad trademark case in China with payment of USD60 million to Proview. If you missed this news, you can check this out in New York Times.

This is only a reflection to what is happening in China related to 'well known' foreign trademarks. As we wrote earlier, we are getting cases related to trademark squatting in China. Individual, not a business, registers hundreds of foreign trademarks waiting to sell it. The iPad cases just proved that it can be a good business. Recent cases also demonstrated that posting a registered mark for sales is not a good reason for 'applicant with bad intention', the real trademark owner still have a hard time to fight back. All these combined, actually let the Chinese 'seller' set a higher price to sell the registered marks.

The bad things is, trademark squatting is spreading to Hong Kong. What we can tell is, if you value a name or symbol that your business had been using for a long time, and you have intention to coming to China or Hong Kong, do the mark registration ASAP.

Of course, we do trademark too.

Trademark registrations in China

The latest number of trademarks applications reached 10,000,346 in China as of 29 March 2012. The cumulated number of trademarks granted was 6,892,999.

The annual number of applications reached 1.41 million in the year 2011, a growth of 32% over 2010.

This is a big number, but how many of them are squatters?

Trademark squatting in China

We are surprised by the depth of trademark squatting until we see one.

We came across a case whereby a trademark registered in Australia for the sales of fashion clothing. The lawful owner then applied for registration of the same mark worldwide. But the registration of the mark failed in China, as it was already registered. We were then asked to provide our opinion on the subject.

We search a few Chinese web sites and found that the goods were sold in www.taobao.com (something like eBay) That is, they are being sold on a small scale in China and the manufacturer does not have a presence in China

When the "lawful" owner of this mark wanted to apply it in China, it was rejected as the same mark was registered a few years back. When we were asked to provide opinion on the subject, apart from the normal thing, we also found out that the Chinese trademark owner was an individual instead of a company that also applied another 50 trademarks under the same class 25. Some succeed and some failed.

This person had yet to apply any mark for Chinese products, what an individual with international prospective.

What it takes for his attention to apply for a mark registration? All these marks are national or international brand that have yet to have a presence in China. So that good citizen of China is creating brand awareness before their lawful owner.

We were thinking should we start an anti-squatting action to call each lawful owner to instruct us to get back the trademark from these Chinese squatters. To be or not to be, that is a problem when we have spare resource. Advert time: For those foreign trade mark agent or trade mark owner, you can have us to do some search, may be something interesting may pop up.

Google buys patents from IBM

As far as I know, patents were meant to encourage innovation, but lately they are being used as a weapon.

Google has gained hundreds of patents from IBM as it continues its intellectual property spending spree. It has acquired 188 patents and 29 applications, adding to the 1,000 it purchased from IBM last summer.

The spokesman of Google expressed that acquisition those patents can enhance its patent portfolio and increase its competition in the market, even Android would not been threatened by anti-competitive of Microsoft, Apple and other companies easily.

If you desire your innovation to become stronger, prepare more weapons for it now!!

And here is the news: http://hk.news.yahoo.com/google買ibm專利-025003364.html

Copyright protection as the reason to stop pedestrians from taking pictures

As a headline in a local Chinese newspaper (Apple Daily Hong Kong), Dolce & Gabbana stopped pedestrians from taking pictures of their shop in Canton Road, Kowloon and the explanation offered was 'copyright protection'. According to the newspaper, these pedestrians were walking in the sidewalk about 4 metres away from the shop, and whenever they pointed their camera towards the shop, they were stopped and the staff or the security guard blocked the view of the cameras.

The reporters of the newspaper had further tested out other shops selling luxury goods in the area and only Dolce & Gabbana really watched out for anyone with camera near their shop.

Local lawyers were quoted that display of a shop facing the street are subject to photographic snapshot by pedestrians in public area, such as the sidewalk of Canton Road.

Actually this is a very innovative way to use 'Copyright Protection' and 'Protection of Intellectual Property' to restrict the right of those walking in the sidewalk of a busy street in Hong Kong.