A State-owned firm was ordered to compensate Nike 165,000 yuan (US$20,000) in Shanghai on Wednesday for attempting to export thousands of fake products to Russia.

"The company was asked to apply for export permission for some goods by the Beijing Office of DHL Russia," said Jin Xiaobing, lawyer for Beijing Metals and Minerals Import and Export Co, "My client was not responsible for checking whether the products are genuine or not."

Shanghai No.2 Intermediate People's Court heard that local customs had discovered over 123,000 sportswear items with suspicious Nike marks and tags.

Nike's lawyer, Wang Huixiang, said, "Under questioning, the defendant failed to prove itself an authorized user of the trademark. Customs then impounded the products."

Jin claimed the Beijing firm was innocent, but agreed to the compensation.

According to the law, the owner of the trademark is obliged to pay customs to impound disputed products and then claim the costs back from the person or company at fault.

"Nike paid more than 140,000 yuan (US$17,000) to Shanghai Customs to keep the products from July 2001 to August 2002," said Wang, "We tried many times to negotiate with the defendant over the costs, but were refused."

According to Jin, the products came from the old Silk Market in Beijing, a famous outdoor clothing market closed in January where many counterfeit products could be bought.

"Foreign tourists would purchase clothes at the market and then sell them in their own country," said Jin, adding that his client would be claiming compensation from the Beijing Office of DHL Russia.

The verdict came as the government launched another campaign against fake products produced and sold in the country.

(China Daily April 21, 2005)