Counterfeit Disney products target of trademark campaign
By Wang Hongyi In Shanghai (China Daily)
Updated: 2016-01-13

As the US-based Walt Disney Co prepares to open a new theme park in Shanghai this year, China is carrying out a trademark protection campaign specifically designed for the iconic company.

According to the State Administration for Industry and Commerce, the special campaign to crack down on Disney counterfeits will help promote the development of a fair and competitive market, and protect the country's global image for safeguarding intellectual property rights.

The campaign, which started in October 2015, will not only establish a special team for Disney trademarks protection, but train law enforcement officials to spot illegal behavior and enhance the inspection of Disney products online.

The SAIC has listed the core area of the Shanghai Disney Park and Resort and the surrounding area as a key area for Disney trademark protection.

Cities across the country have also cracked down on Disney counterfeits.

In Shanghai, the local industrial and commercial authority has stepped up its crackdown on illegal behaviors and enhanced its inspections, especially in the fields of production, circulation, trademark printing, advertising and online sales of Disney souvenirs and derivative products.

Inspections have been strengthened with a combination of online and offline supervision, in cooperation with surrounding cities.

In Hangzhou, Zhejiang province, the local market supervision department seized nearly 2,000 sets of children's wear that infringed Disney brand rights on Nov 18. The fake Disney clothing was mainly sold through e-commerce platforms at low prices. The seller was ordered to close the illegal online trading links, and the case is under further investigation.

"I once bought some clothes online for my son printed with classic Disney cartoon characters, such as Mickey Mouse and Winnie the Pooh," said a Shanghai mother. "But it's difficult for us to tell if they are counterfeit. I think the country's move will better protect consumers' rights."

In Zhuzhou, Hunan province, an English education provider was found to be illegally using Disney trademarks on its office desks, bulletin boards and textbooks. The institution was ordered to correct its logo and signs within three days.

Beijing industrial and commercial authorities have also taken measures to protect the Disney trademarks. They have enhanced their daily inspections with increased scrutiny of the use of Disney trademarks.

The $5.5 billion theme park in Shanghai is being jointly developed by Disney and the State-owned Shanghai Shendi Group.

The city is also home to Walt Disney's largest store by floor area. The store, which opened in May, has an indoor floor space of 860 square meters and covers 5,000 sq m in total in the landmark financial area of Lujiazui in Pudong.

The company's first store on the Chinese mainland sells more than 2,000 products, with more than 90 percent of them exclusive to the site.

Money in merchandise

In 2012, Walt Disney Co spent $4 billion buying Lucasfilm Ltd and the copyright to Star Wars from the movie series' creator George Lucas, a deal it looks unlikely to regret.

Star Wars merchandise earned Disney $4.6 billion in revenue between 2013 and 2014, and are the most profitable products in the Disney portfolio.

A toy droid based on the BB-8 model in the most recent Star Wars: The Force Awakens is the "best Star Wars toy ever made", according to Forbes magazine, as it is "fun, fast and the most adorable".

Although the toy costs as much as $150, 22,000 units were sold in the first 12 hours after its launch worldwide on Sept 4, 2015.

A report from China National Radio said that some international movie and animation giants, such as Walt Disney and Marvel Comics, have only 30 percent of their income from the box office, and the rest is from derivatives sales.

Senior movie producer Gao Jun said that most Chinese movie companies lack the awareness to develop derivatives when they begin creating movies.

"Many classic cartoon characters, such as Mickey Mouse and Donald Duck, were designed to serve not only movies, but also all kinds of derivatives since the very beginning," he said. "Since Hollywood was started, it has never relied heavily on box office, but focused on the development of a full industry chain."

Many cartoon series, such as Transformers and Astroboy, entered China decades ago without asking for licensing fees, but sales from toys and other merchandise made up for that loss after they became immensely popular.

Gao said although China's movie derivatives development lags behind in business model and market operation, it has made some initial progress. One example is the merchandise for Monkey King: Hero Is Back, a 3D animation released last year, which has so far achieved revenue of nearly 20 million yuan ($3 million) from Alibaba's shopping website.

 Counterfeit Disney products target of trademark campaign

A shopper kisses a Mickey Mouse doll at the Disney fl agship store in Lujiazui area of Shanghai, the largest Disney store in the world. China has launched a campaign against counterfeit Disney products. Tang Yanjun / For China Daily

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