Trendy International: IP Management Determines the Future of a Garment Business

By Zhou Yi, China IP,[Trademark]

Trendy International (Hong Kong) Limited, originally Guangzhou Ochirly Industry Co., Ltd., was founded in 1999. Since its inception, the company has installed a system of brand management and, and the same year introduced the Italian brand “OCHIRLY” in the same year.
Through ten years of development, “OCHIRLY” has grown into one of the most valuable Chinese fashion brands in women clothes. In the meantime, the company, based on development of the “OCHIRLY” brand, has expanded into a variety of brands, such as “FIVE PLUS” and “TRENDIANO”.
Trendy International along with its brands is a favorite of the fashion industry, and its office, a media delight, is something of a designer’s full inspiration. In this “huge” office, which covers an area of about 12,000 square meters, nearly 100 elite designers have gathered. They are good at capturing bright spots of fashion and seek perfection in every detail. Over the past ten years, Trendy International has never relaxed investment in the research and development of clothes.
However, not everyone here is a designer. In the place where creativity and inspiration converge, there is also a team whose work is extremely rigid and even tedious. They should stand alert twenty-four hours a day, ready to protect the creations of the designers and help fully demonstrate the best value of the designer’s creations of the designers. Zhao Hongxin is one of them and works as Director of Trendy International’s Legal Affairs Department.
Trademark management is a system
“The garment industry is unique in that the number of patents and copyrights is relatively small. Therefore, we focus our efforts mainly on protection of trademarks. The object is simple, but trademarks are equal to clothing brands which amount to an apparel company’s lifeline in the fashion world. Therefore, trademark management is very important,” said Zhao Hongxin to our Journalist.
Trendy International’s trademark management began in its early days. Its founder Xu Yu shifted to the garment industry ten years ago and his natural sensitivity enabled him to realize the importance of IP concerning a clothing brand. Although Xu Yu had much work to do at the start of the company, much of his efforts had been devoted to IP: he had registered the company’s existing brands both at home and abroad, and clearly stated that the company’s shareholders would be directly responsible for its related IP issues.
According to Zhao Hongxin, the company has been adopting “internal and external integration, effective promotion and reasonable prevention” in trademark management and planning over the past decade. The above three points mentioned above, “IP creation, utilization and protection” are repeatedly emphasized in the IP strategy.
“Internally, the company has hired professional legal personnel and put in place tailored trademark management measures to coordinate and manage registration applications and maintenance of everyday trademarks; in the meanwhile, the company has built up a trademark management database for daily inquiries and promotions; In addition, the company has been active in  cooperating with legal service organizations to jointly build a trademark and domain name monitoring system and a market monitoring system for infringement to crack down hard on various types of trademark infringement such as trademark squatting and “free ride on famous brands.” Zhao Hongxin said, “so far we have formed a distinctive IP protection system, namely, a three-dimensional protection mechanism combining ‘points, lines and surfaces’.”
For ten years, there has never been any internal dispute in Trendy International over the importance of IP work. On the contrary, as the company develops, it has attached increasing significance to it.
So far, Trendy International has not established a team specializing in IP. The Legal Affairs Department (comprised of four people) is responsible for IP management and the Vice President of the company coordinates the daily work. The legal staff simultaneously reports IP matters to the company CEO and other shareholders.
Zhao Hongxin said, “Now the company is actively working for a listing. As the company grows stronger and more branding strategies are implemented, we will dedicate more of our efforts to the building of the IP department.”
Required courses: Stop infringement for protection of rights
Apart from internal trademark creation and management, Trendy International has not relaxed protection of its brands. “A clothing brand is unique for the reason that it needs very huge R&D investments. But it is very easy to make counterfeits or pass off trademarks. Currently passing-off is the major act of infringement on the market, which includes identical styles with identical trademarks and different styles with identical trademarks. Of course, the above two types of infringement will have serious consequences on enterprises,” said Zhao Hongxin.
After monitoring for quite a long period, Trendy International found that infringing products were mainly circulated between major clothing wholesale markets that offered very low prices to attract consumers, which is a major act of infringement particular to the apparel industry. However, in the face of these infringing products, a clothing enterprise shall still fight counterfeits and protect its rights to the very end, because the major harm counterfeits do to the apparel industry is damaging purity and fame of brands. “Brands are the goodwills; low qualities, which may even harm consumers’ health, will undermine such goodwills,” said Zhao Hongxin.
Before 2008, Trendy International combated counterfeiting in a relatively simple way, mainly focusing on uncomplicated rights protection against individual shops. Nevertheless, from 2008, Trendy International began to go out in force and shifted from simple combats to “all-out offensive.”
Zhao Hongxin said, “Now our company has already put in place a relatively complete network and corresponding ‘strategies and tactics’ in combating counterfeiting and protecting rights. We have established a monitoring system on the network and the wholesale markets, and will zero in on key targets against infringers, in partnership with intermediary agencies, on the basis of dynamic monitoring and data analysis of key areas and key clothing wholesale markets or network marketing platforms.”
In 2009, Trendy International selected a total number of 29 wholesale markets in 12 cities as main objects of rights protection. During the one-year efforts, more than 40,000 pieces of counterfeit clothing were seized valued at more than 16 million Yuan.
Despite the achievements, there are some headaches for Zhao Hongxin. “How to tackle the increasingly worsening network infringement has become a serious headache for modern enterprises because online sales are virtual operations or adopting a mode of separation of production, supply and sales, and it is very difficult to combat such counterfeiting,” said Zhao Hongxin.
In January 2009, Trendy International found after several investigations that Gu Xin and others sold a large number of products infringing the “OCHIRLY” trademark on his website with monthly sales of up to 1,000 pieces. Regarding this issue, Trendy International entrusted the well-known domestic IP agency - Beijing Unitalen Attorneys at Law - to report the case to the Dongguan Municipal Public Security Bureau. After careful investigations, the criminal suspect Gu Xin was arrested in June 2009 and 13,686 pieces of clothing bearing fake “OCHIRLY” trademark, worth nearly 8 million Yuan, were also seized at the scene. In August 2009, another criminal suspect Hu Yuming, the boss of the manufacturing plant, was arrested. On December 1, 2009, Guangdong Dongguan City Intermediate People’s Intermediate Court adjudicated the case of Gu Xin and Hu Yuming selling clothes infringing the “OCHIRLY” trademark on the website and the accused were both sentenced to prison and fined accordingly.
During time off work, Trendy International has its own ideas on how to fight counterfeiting and the counterfeiting market. Zhao Hongxin said, “In fact, enterprises are born deficient in rights protection. Firstly, enterprises pursue profits, and it is preposterous for them to have too much effort distracted to maintain a normal market economy. Secondly, enterprises do not have functions as industrial and commercial administrations, to say nothing of legal rights of launching investigations to gather evidence. Due to deficiencies in their capabilities, enterprises can do nothing in the face of such infringement and are helplessly unable to fight back in the event of passing-off of products created through painstaking efforts in research and development.
Zhao Hongxin holds to the idea that eradicating counterfeits is not realistic, but all sides should do their utmost to create a fair and reasonable economic market order. He said, “I think the government should strengthen construction and improvement of legal systems in market supervision, while in the meantime enterprises should upgrade IP protection to equate development strategies. More importantly, consumers should voluntarily reject counterfeits and respect intellectual achievements of enterprises.”

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