Chinese experts in intellectual property right (IPR) have called
on the government and enterprises to be more aware of their IPR
protection to avoid losing control of domestic brands when
cooperating with overseas investors.
At the Summit of Independent Innovation and Domestic Brand
Development Strategy held in Hohhot on Thursday, IPR experts and
entrepreneurs expressed their concerns about the lapse of home
brands resulting from mergers and acquisition between Chinese and
overseas businesses.
Statistics from the summit show that seven of China's top eight
beverage companies have been merged by Coca Cola or Pepsicola, and
foreign brands account for over 90 percent of the market share of
the country's carbonic drinks.
In cosmetics industry, foreign brands make up 75 percent; in
food and medicines, 30 percent to 40 percent. And three of the top
four laundry detergent producers have been acquired by foreign
companies.
Wu Handong, president of Zhongnan University of Economics and
Law and an IPR expert, said that some domestic brands with unique
techniques and reliable quality are fairly competitive in both
domestic and international markets, but when they join hands with
foreign enterprises to seek either financial or technological
support, they are gradually edged out of the market and finally
disappear.
Liu Liedong, general legal consultant of the China Oil and Food
Corporation (COFCO) which is a leading grain, oil and foodstuff
trading conglomerate in China, said that the fundamental purpose of
international companies in China is to raise their market share and
promote their trademarks, with capital, technology and brands
acting as their most powerful weapons.
Attracted by foreign capital and technology, many Chinese
enterprises do not pay due attention to the handling of their
brands when cooperating with foreign investors.
He said Chinese enterprises usually put their trademarks into
joint ventures. With the development of the new company, foreign
investors will gradually get a controlling position or just replace
the Chinese brands with their own.
Senior brand expert Yang Xingguo said that many Chinese
enterprises mean to take advantage of foreign technology and
management experience to develop their own brands, but they often
turn out to be going toward the other way -- their foreign partners
use the opportunity to root out competing Chinese brands and get a
monopolizing position in the Chinese market.
"You can just count, how many famous domestic brands have
disappeared just because of cooperating with foreign investors?" he
said.
The experts held that the main reasons leading to brand lapse
are that enterprises are not conscious enough to the importance of
brands, the existing brand appraisal system is not sound enough,
and some enterprises with capital or technological difficulties
tend to sacrifice their long-term interests to resolve problems at
the moment.
(Xinhua News Agency August 4, 2007)