Adidas On China IP: Just Do It
About a year ago, I did a post, entitled, "Nike On China IP Protection: Just Do It With Green Tea," on Nike's superior handling of its IP portfolio in China. I am now ready to provide Adidas equal time.
Just came across a short informative article in Fast Company magazine, entitled "Fast Talk: Adidas's Fake-Out Artist." Article is on Ray Tai, Adidas Assistant General Counsel out of Hong Kong, talks about Adidas' strategies for protecting its IP in China. The article starts out describing Tai as Adidas' "intellectual-property enforcer in Asia" and notes that as an Olympic sponsor, Adidas has the exclusive on Olympic-branded sportswear for the upcoming Games. The article also notes that "Adidas is the only major athletic shoemaker with IP attorneys based full time in China."
Tai sees the Olympics as "the ultimate test when it comes to counterfeit goods" because the Olympic sponsors are going to "get hit" hard by counterfeiters. Tai then boasts of how "if you go to any large or midsize city in China, you can't find any fake Adidas" and he details their strategy for keeping it that way:
Our strategy is to raid wholesalers, or even the retailers. Typically, companies raid the counterfeiting factories. That gets a big splash in the paper, but it's a waste of money. At the factory, shoes may be worth only a few dollars a pair. But at the wholesale and retail levels, they're worth a lot more. That's where you can make a much bigger financial dent. There's an incentive for them not to buy fakes anymore. We ordered more than 1,000 raids last year. We'll probably start seeing Olympic fakes surface six months or so before the Games. We'll be hiring extra security to watch for them. For now, we've found a way to deter the problem. I am a strong believer in prevention. Most lawyers are too bogged down with crime and punishment.
Tai is right. Lawyers are trained to view the law as the answer, but when it comes to IP protection, law is just a starting point. Prevention is the real key.
For more on protecting your China intellectual property, check out "Protecting Your China IPR -- The Best Offense Is A Good Defense", "Protecting Your IP in China," and "Update To China: Counterfeiting And Piracy -- The Issue And The Challenge."
Comments
The strategy of hitting wholesalers/retailers works only if you're also going after the factories. In any case, it hasn't worked that much because in Guangzhou and Shenzhen, its very easy to find fake adidas products at the main markets...
Olympics fakes? Even getting closer to the Games I don't see there being a lot of fake Olympic gear, over the past 6 years there has been plenty of time for fake stuff and in all the major markets, it is almost impossible to come across any fake stuff. The government has taken a very strict, protective line against these fakes and I don't think that's going to change.
Posted by: b. cheng | September 5, 2007 11:20 PM
Sounds like a good strategy, but how well is it working so far? Fake Adidas goods are very easy to find in Beijing.
Posted by: Anonymous | September 6, 2007 2:50 AM
Tai then boasts of how "if you go to any large or midsize city in China, you can't find any fake Adidas"
I find myself in Shanghai today and walking towards the bund i let myself be taken to look at the goods those "rolex! dvd! shoe shoe!" guys hawk all the way along Nanjing Rd. Seems like there were plenty of fake adidas to me. Id imagine Shanghai can be considered one of China's "large or midsized cities"
Posted by: warwick | September 6, 2007 3:32 AM
Warwick: "rolex! dvd! shoe shoe!"
Shoes? Really? That's a new one- to me, at least. Socks always seem to be a perrenial favourite at Xiushui/Silk Street here in Beijing. The funniest hawker I ever came across, though, was at Chaoyangmenwai. He shouted "CD, VCD, DVD, sex!" at me as I walked by hand in hand with my wife.
Posted by: chriswaugh_bj | September 7, 2007 2:28 AM
Adidas is coming out with a lot of good new sneakers and I appreciate that but I just cant see them surpassing what Nike has done and continues to do, particularly things like Nike Dunks are very popular and Adidas has not come out with a good premium shoe that can compete with the the Nike Dunks, at least thats why I continue to buy Nike.
Posted by: Bapes | October 1, 2007 12:46 PM
I like adidas better.
Posted by: Nike Dunks | March 21, 2008 7:44 AM