Tuesday, June 7, 2016

Fashion Legallaire Takes China: Doing Business in China

Hello everyone and welcome back to Fashion Legallaire Blog.

 On this edition of Fashion Legallaire takes China, we will focus on doing business in China. My most recent development in the fashion law industry was moving to China and becoming an international business consultant because I wanted to learn and experience more about the business of fashion. Further, one of the advantages of living in China, specifically Guangzhou, is that I have access to various of the markets and manufacturers in various industries. 

In America, when learning about the business of fashion, I would usually learn about the designer, see the finished product and research its intellectual property. I frequented BOF.com to keep abreast on the financials of the market and stay on top of market and fashion trends. In China, however,  I am involved with the more technical side of fashion- raw materials, accessories, factoriy and market visits, and logistics (think shipping, quality control). It has been fun so far, but this part of the business of fashion has its challenges. 

1. What's the hardest challenge when doing business in China? 

The language and culture barrier. Doing business in China is unlike any other business experience I have had. Understanding the culture and learning to work with it in China in order to be successful is ongoing. Building business friendships and relationships here takes time and catering to because once you have the "guanxi," you are good; but sometimes, for some people, you will never be more than a foreigner doing business in China. Consequentially, the foreigner tax is real when doing business so it helps to have a trusted Chinese business partner to help you overcome that hump. 

It is imperative that you speak Chinese or work with someone who can speak Chinese when doing business here. Within the last 15 years, China became more open to foreigners permanently living and doing business here, so there is a huge language gap. Also, many of the manufacturers, market vendors only speak Chinese, and or a local dialect. Therefore Learning Chinese or having a trusted business partner who is Chinese and or can speak Chinese is imperative. 

Hand signals, and I'm not talking about sign language, and other western non verbal cues that I have learned in my life, do not work in the place of actual communication here in China. It is quite interesting and sometimes funny, but can be frustrating when trying to articulate particular instructions and specifications about manufacturing and shipping. 

2. What are the advantages and disadvantages of doing business in China online?

When it comes to the internet and technology, China is a global leader and does a great job at making most conveniences in life available online and or with the scan of a Quick Response code (QR code), a two-dimensional barcode that is machine readable, and stores information about the item to which it is attached. QR codes seemed to have come and plateaued in America but China is the future, especially when it comes to international business, so this may come alive again there. 
My QR code: The LifeStyle Buyer
available on Wechat

              When it comes to doing business online think Taobao, Alibaba, Aliexpress, which are akin to Ebay and Amazon. These are giant online vendors who supply the world with almost everything it needs when doing business virtually, but there in lies the blessing and the curse. 

Not being here to see the product or inspect the quality leaves the average buyer open for the ultimate scam- not getting what he or she paid for in quality and realia. No res ipsa loquitur because the thing does not speak for itself- it's an imposter. I have ordered from Taobao, and still received products that looked nothing like what was advertised and I live here. Therefore it is important to connect with someone who can actually speak to the vendors, see and feel the products and make sure it is up to par with the buyer's expectations. Insert Me, the international business consultant here in China. 

3. Is there intellectual property protection in China? 

I answer this question with a question. "What's a copyright China?"  I wrote about the lack of intellectual property protection (IPP) in China and it's lack of incentive to respect global intellectual property rights. Click the hyperlink to learn more about it.  China has IPP in theory. You can and should file for IPP if creating and manufacturing in China so that you put people on notice. 

China has IPP courts, however IPP in practice is a day to day challenge and when I go to the markets, I question the implementation and strength of IPP here. 

I saw these Gucci flip flops outside of a market, but I was not at the Gucci store. 
And it is not just high end designers that get their work stolen, start up designers as well. I spoke with 2 designers living and working in China and they each told me the horror stories. In both instances, after they designed their creations, they took it to the manufacturer. Both designers saw their designs being sold around in China various colors without their logo. One of them has even stopped designing, at least while he is in China because he does not ever want to experience such theft again.  I must say, it is one thing to research and study China's plight with global intellectual property laws but it is eye opening to see it in person. 

4. What does Business Consulting Entail?

From start to finish, a typical consultation includes speaking with the client to understand their needs and wants. Then further research is done to find out where I can find the item or manufacture it. Once there, I relay all the specifications to the vendor or manufacturer and negotiate pricing. This can take a few hours. Samples may need to made and verified by my client. After the item comes in, I conduct a quality control inspection to make sure that it matches my client's request. Lastly, I ship the item out. 

5. What have I learned doing business in China?

From this experience, I have learned so much about manufacturing, logistics, business, importing, exporting, and the surrounding laws. I love that I have the opportunity to meet people from all over the world everyday. The one lesson that I find very essential is the importance of emotional intelligence. Emotional intelligence is the capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and empathetically. 
Emotional intelligence is key to having relationships with people whether in business, family, or love. At the end of the day business is business, but people are people and it is key for me to be in control of my emotions so that I handle my interpersonal affairs judiciously and empathetically. 

I focus on beauty and eyewear but if you are interested in buying from China, contact me:

email: bejustpeachy1@gmail.com
Wechat: Liftestylebuyer or scan the code above
Twitter: fashnlegallaire

Saturday, August 1, 2015

Fashion Legallaire Goes to China: Michael Jordan Lost the Rights to His Name in China


Business Insider
Michael Jordan lost the rights to his name in China in a recent trademark lawsuit he brought to a Beijing Municipal High People’s Court against a company using a similar name and logo for his Nike in April 2014.

China is home to lax protection of intellectual property rights, many counterfeit goods and brands and Jordans by Nike is no exception. The chinese imitator is Qiaodan Sports, a Chinese sportswear company based in Fujian province.

Since 2012, Jordan has unsuccessfully sued Qiaodan Sports for  misappropriating his name and likeness. In this lawsuit, Jordan asked Qiaodan Sports to deregister 78 trademarks.

China Wire reports that Qiaodan Sports, pronounced “chew dahn” sounds very similar to Jordan. In fact, it is a Mandarin transliteration of “Jordan” used to refer to Michael Jordan. Also, Qiodan uses the number 23 and a jumping man logo to sell basketball shoes and jerseys. Which would naturally mislead any consumer in China that Michael Jordan was behind the brand.

In the U.S. legal system, it is clear that Qiaodan infringed on Jordan’s trademark rights. However, after a series of countersuits, it is clear that Chinese law backs it national companies even when it is clear that their success derives from the creations of others. In a June 18th verdict, the Beijing court ruled that “Qiaodan” is not only the name that corresponds to “Jordan,” and “Jordan” is only an ordinary surname of American people, not a full name.  Also, the logo is in the shape of a person with no facial features, so the current evidence is not enough to prove that Qiaodan” determinedly points to Michael Jordan.

The six time NBA champion plans to appeal to the Supreme People’s Court for a retrial.

Sunday, March 22, 2015

Fashion Legallaire Goes to China: What Copyright, China? No Incentive for IP in China

As a recent expat to Guangzhou, China, the biggest manufacturing city in the world, I see firsthand the beginning and end of many counterfeited goods. Seven days a week, Guangzhou's factories produce manufactured goods for branded and non-branded companies alike.  For example, Louis Vuitton has a manufacturing company here, so naturally the art of making precise counterfeit LV products is perfected here. Sure there is pride in buying the real deal, but a $7 counterfeit in a subway station, just may be your dirty little secret.

As an American fashion law enthusiast, I learned that intellectual property is the crux of commercializing creativity. Before coming to China, I further learned that China is the worst country when it comes to abiding by international intellectual property laws.  But now that I am here, I think I see why there is no incentive for many Chinese manufacturers to follow intellectual property laws.  It begs the question, "what copyright, China?"

So countdown the ways with me....

1. Most of the branded imported textile goods are manufactured in China so it is very easy to not only make items for export, but to keep the manufactured items to sell in the local markets.

2. Factories mess up sometimes. A wrong stitch here or there means that the item needs to be tossed- usually right out to the street or local market.

3. Even if a Chinese manufacturer does follow ip laws here, there are many more people here that do not follow it, so it may cost more financially to abide by the rules in the long run.

4. In China the labor is cheaper and fashion companies take advantage of this fact at their own expense. The cost of production for manufactured goods is so low that branded companies choose not to move its manufacturing out of China.

5. While the supply for counterfeited goods is high, the demand is even higher. Counterfeited goods is a billion dollar business. *Think Louis Vuitton in the subway*

Counterfeited products manufactured in China range from pharmaceuticals, beauty products, technology, to fashion. It has been very amusing guessing whether something is real or fake here; but usually, the price determines that.

Until next time...

Thursday, January 22, 2015

Britain's Court of Appeals Confirms Rihanna vs Topshop (1-0)

Remember in 2013 when Rihanna sued UK fashion brand Top Shop for using her image on one of their t-shirts (read it here) and won  $5 million in damages? Well Brittain's High Court of Appeals confirmed the "passing off" ruling in her favor.

 As WWD reports, "last November, Topshop appealed a decision by a judge at Her Majesty's High Court in London prohibiting the retailer from selling T-shirts featuring a particular image of Rihanna." 

Other interesting observations: what British law calls "passing off"  U.S. law calls  "trademark infringement." And apparently, Topshop failingly argued that it had the right to pass off Rihanna's image arguing that it had used the likes of famous artists before. 

Sunday, November 30, 2014

Land Rover Calls Chinese Auto Maker a Knock-Off

We usually highlight knock-offs as it relates to fashion, but this story was too good to not share with you. Once again this particular knockoff involves China, the king producer of manufactured goods and knockoffs.

LandWind, an automotive company based in Guangzhou, China has released an SUV that looks very identical to the Range Rover Evoque.  It is called LandWind X7 and Jaguar Land Rover (Range Rover's parent company) is not happy about it at all.

At first glance, the LandWind's outer appearance is strikingly similar to the Evoque. Not only does it have the same body style, but the position of LandWind's name and emblem is very similar to the Evoque despite the $60,000 price difference. Not only is the Land Wind the same design, it is $20,000 whereas the Evoque starts at $80,000 at Chinese dealerships.


Two key parties from Jaguar Land Rover have spoken out. As reported on AutoCar,  Dr. Ralph Speth, Land Rover's Chief Executive Officer said, "the intellectual property is owned by Jaguar Land Rover and if you break that IP then you are in breach of international regulations that apply around the world."  Also, Ian Callum, Jaguar's chief designer tweeted photos of the LandWind.

But will Land Rover have a meritorious case, if any case at all against LandWind? Let us analyze this automobile knock off through our knowledge of intellectual property infringement.

    • When it comes to U.S. law fashion, A KNOCK OFF IS NOT ENOUGH TO SUE for infringement but A COUNTERFEIT IS . A knock off design merely means one item looks like another one. It is legal under u.s. law because it could mean that one the look and design of one item inspired the design of another item. However a counterfeit design takes it a step further and means, not only does my one item look like another, it is design in a fashion as to deceive the consumer into believing that it is the item that it looks like. You can learn the difference between a knockoff and a counterfeit here at the Preponderance of Fashion Blog. 

    • Analysis: Land Rover correctly called the LandWind a knockoff because the latter only looks like the Evoque. Since LandWind uses the word LandWind and the LandWind emblem to decorate the car, it is not a counterfeit, and therefore is legal in the United States. However, if Chinese IP law makes knockoffs illegal (We seriously doubt it), then LandRover may have a successful chance bringing an infringement suit in Guangzhou. 
    • Caveat: 

    • Nicole D. Galli says, “patent litigation in the auto industry dates back to the first days of cars” and discussed patent attorney George Selden, who sued all the early auto makers, including Henry Ford, for infringing on his patent, which was granted in 1895. You can check out a recent case on auto litigation here

    • As we discussed before in our post on patents there are three types- one for designs, one for utility, and one for plants. We will only discuss the design and utility patents. "A design patent is granted to anyone who invents a new, original and ornamental design for an article of manufacture. A utility patent is granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvements" says the U.S. Patent Office. Think of how it looks (design) vs how it functions (utility).

    • Analysis:  We cannot imagine Land Rover not having a design patent for the Evoque because its design makes it unique in how it looks. And although we are not sure, we cannot imagine Land Rover not having a utility patent for the way the Evoque functions - especially if the design (the way it looks) cannot be separated from it's utility (the way it functions).  Cars are computers designed with many codes that relay to its aerodynamics and safety technology. Think speed, seat belts, airbags, and mechanics under the hood. Therefore Land Rover has a strong case for design patent infringement under U.S. Law; and our bet is they have a strong case for a utility patent as well. 
    • Also, The specifications of the Land Wind are very similar to the Evoque. This will definitely help Land Rover's case. 

We will definitely keep you updated on this case. 

Monday, October 27, 2014

The Business of Blogging: What the Federal Trade Commision Has to Say About Blog Endorsements (Part 2)

The Federal Trade Commission (FTC) is an independent agency of the US government in charge of preventing business practices that are anti-competitive or deceptive or unfair to consumers; enhancing informed consumer choice and public understanding of the competitive process. The FTC says its mission is to accomplish the aforementioned without unduly burdening legitimate business activity.The FTC is in charge of protecting consumers from fraud, deception, and unfair business practices in the workplace. Think: online counterfeit sellers and the like.

 The FTC recognizes that bloggers that work directly with fashion retailers and brands refer a lot traffic to the retailer website which turn into sales. Social media sites like Instagram, Facebook, and Twitter enable bloggers to endorse and advertise brands and retailer products. "This is done through likes, comments, retweets, replies, brand mentions, shares, and increases in in-bound and out-bound links," WWD reports.

First, let's explain how shopping through social media works. The old school way was seeing an item on a celebrity or blogger and going to find it by yourself. But now Instagram is shoppable through LiketoKnow.It, a daughter company of RewardStyle, a Dallas, Texas based company that monetizes blogs. Instagram sends users an email with the shopping information of the items inside the Instagram photos they like. Users then sign up with Liketoknow.it in order to buy the item. Think bloggers like Sincerely Jules and celebrities like Lilly Ghalichi and Lauren Conrad. Sites like LTK include startups like Soldsie, Chirpify, and Hashbag.
racked.com via liketoknow.it

So what rules and regulations do the FTC have in place for the business of blogging? Well, in March 2013, the FTC published specific rules and regulations in .Com Disclosure, How to make Effective Disclosures in Digital Advertising.
  • Endorsements and Advertisements
    • Bloggers must make all online endorsement disclosures must be clear and conspicuous.
      • considerations of "clear and conspicuous" include the placement of the disclosure and it's proximity to any claims, the prominence of the disclosure, whether the disclosure should be communicated repeatedly as consumers travel through the site; and whether there are audible and visual messages that will distract consumer's attention from the disclosure.
  • Fraud and Deceit
    • Advertising must be truthful and not misleading; must have evidence to back up their claims; and cannot be unfair. 
It is amazing to see the way that fashion increasingly evolves through technology. This concludes our series on the Business of Blogging.

Talk to us and let us know what you think on the business of blogging and the monetization of social media sites.

The Business of Blogging: Bloggers, Fashion Brands, and Retailers (Part 1)

Brian Grey-Yambao of BryanBoy Blog makes $100,000 annually
Today, there is a blog for just about anything from fashion and beauty to lonely Cheetos (random Cheetos left on the ground... no don't ask us and no shade from us either). It all starts with an interesting subject or hobby and some free time. But now, blogging is a full time gig and paying career for many people around the world. These bloggers form a relationship with retailers and fashion brands when they send the bloggers items to advertise, or send them to specific locations to blog on site and or make appearances. 

We even found some bloggers pulling in six figure incomes from so today's post is dedicated to the business of blogging. Now in fashion law form, we will definitely inform you of some of the laws that surround blogging such as defamation, endorsements, and advertisements- you can never be too careful. But we will leave that for part two of the business of blogging. Since blogging is a lucrative business for some of the one million blogs that exist, we want to highlight some of the highest paid bloggers.

 According to WWD, designers and fashion brands pay anywhere from $5000 to $50,000 to work with bloggers. 
  • First they choose a highly influential blogger, someone who's blog has major traffic and many followers and can drive millions of page views a month on the blog and on the brand's website
  • Then they send them the products in exchange for posting commentary and driving sales. Think: clothes, shoes, technology, and cosmetics.
    • Of course the blogger has to jazz up the look and is responsible for styling, hair, makeup, photography, art direction, retouching, copy writing, and posting, which WWD says takes a magazine 20 people to pull off. Therefore, it is going to cost the retailer or fashion brand.
    • Note: since the blogger is officially advertising products, they must follow FTC guidelines and make any and all endorsements "conspicuously and clearly" (found out more information in part two of our series).
  • Next is the optional stuff like hosting an event. This can cost up to $50,000. Think: airfare, hotel, and entertainment.
Now just who are some of these millionaire club bloggers? According to RewardStyle, a Dallas, Texas based invitation-only web tool that helps top tier style publishers find and monetize their content, the top five bloggers are:
The bloggers listed obviously do more than the "pay per click" advertisements. They are out and about making appearances at store openings and events. But there are rules and regulations that go along with endorsing fashion brands and retailers which we will cover tomorrow in part two of The Business of Blogging.