Brand stand

Great Wall wine, Fortune cooking oil and Le Conte chocolate are famous brands in China owned by COFCO Ltd, the nation's largest agricultural company and maker of food products, which learned the importance of protecting its trademarks after a joint venture founded in the 1980s went awry and it lost one of its important brands.

"Establishing and fostering brands with our own intellectual property rights (IPR) has always been a long-term strategy for our company," Liu Liedong, general legal counsel of COFCO, tells China Business Weekly.

The company has been paying close attention "to improving trademark registration and restraining infringement", he says.

COFCO now has 1,243 registered trademarks in 34 product categories and eight kinds of services. Among them 399 are domestically registered trademarks and 844 are overseas registered.

"Our company now has trademarks in over 60 foreign countries. In Europe alone we have trademarks in 22 countries," says Liu.

To further protect some of the company's famous names, such as Great Wall, Fortune, and Le Conte, it has also registered trademarks for similar names. To protect the Le Conte brand, it registered other names, including Yin Di and Golden Land.

COFCO has a long history in trademark management, says Liu. In the late 1950s the company appointed specialists to manage trademarks, one of the earliest domestic companies to do so.

The legal department took charge of trademark issues in 1996. In 2003, COFCO established its IPR division under the legal department to manage its trademarks.

"With the new IPR division, we can provide more professional services to protect our hundreds of trademarks. It is important for not only the development of our multiple brands, but also for the future growth of our company," says Liu.

According to COFCO President Ning Gaoning, the company will integrate its resources to better manage its brands.

Ning cited other two companies - Archer Daniels Midland and Cargill from the US - as good business models. "They have set a good example for us, in both brand building and business development strategies," he says.

Trademark infringement

Although COFCO made strong efforts in its trademark management, it is inevitable that the company faced some IPR issues. The Arawana cooking oil dispute is one case.

In the late 1980s, COFCO entered in to a joint venture with a Singapore-based company for the production of cooking oil. Because the partner owned a controlling stake in the venture, it took full charge of the design and application for a trademark.

But the company did not file for a new trademark. Instead it brought one that it already owned in Singapore, which it alone owned, not through the joint venture.

Cooperating in the venture, COFCO did not contest of the trademark. But after years of development, when Arawana had become a famous brand in China, the Singapore firm then gave permission to two other Chinese companies to use the name.

"Although it resulted in great loss for us we could do nothing, as we did not own the trademark," says Liu.

COFCO withdrew from the venture and started to produce its own cooking oil under the Fortune trademark. Although Fortune has now become one of most popular brands, Arawana remains its main competitor.

"What we learned from the Arawana case is that IPR is not only a tool to protect their products, it can also help enterprises to increase their market presence," says Liu.

An example is China's largest consumer appliance manufacturer Haier, which has divided its IPR strategies into three periods, trademark registration, patent protection and establishing standards, which all became drivers for business at different stages of development.

After the Arawana case, COFCO further enhanced its trademark protection. In 2004 the company filed lawsuits against two domestic companies, Beijing Jia Yu Dongfang Wine Co Ltd and Jiangxi Kaixin Sugar, Wine and Food Co Ltd for infringement of the Great Wall trademark and logo.

COFCO said it registered the Great Wall trademark in 1974 and has made decades of effort to build the brand into the leading wine in China.

The court ordered the defendants to cease producing and selling their product using the Jiayu Great Wall trademark and to pay COFCO over 10 million yuan in damages.

The case is one of the largest IPR cases in the nation's wine industry in the recent years. "Through the case we not only improved our IPR protection awareness and experience, but also promoted our brand and business," Liu says.

(China Daily 09/10/2007 page9)