Gucci recently clamped down on Chinese shops selling paper versions of their products as offerings for the dead. As per Chinese tradition, relatives can appease the dead by offering items that they were never able to enjoy when they were alive. This can include sports cars, branded clothing or luxurious villas. The demand for these items surges particularly during the annual tomb-sweeping festival. Gucci issued a statement saying, “We want to prevent the public thinking mistakenly that Gucci is selling funeral products. As a brand we have to defend our intellectual property.Gucci’s action evoked criticism from all sorts and one particular scathing but honest comment, “Living people cannot afford (Gucci products), and they still do not let you own Gucci products after death!”

The Chinese obsession with designer products is well known, so it comes as no surprise that they would be interested in making offerings of coveted branded goods. While there are festivals to celebrate the dead around the world, I’ve tried to dig around and find similar instances in other cultures but have drawn a blank. This incident however gives us a reason to revisit the incessant tussle between high-end designer products and their fake counterparts. Countries like China and India have a roaring grey market for luxury goods. It is well known that rip-offs of designer brands and commonly sold at markets in Delhi and Mumbai. And if one fancies shopping online there are a number of websites claiming to sell Louis Vuitton, Gucci etc. at a fraction of their cost. Gucci is currently involved in litigation with Alibaba in New York for selling knock-offs of its products on its ecommerce platforms. Gucci contends that, bags worth $795 are allegedly being sold for as little as $2 to $5 through Alibaba’s platforms. Closer home, Hermes has been fighting a case against the Indian leather goods retailer, Da Milano over the similarity of Da Milano’s handbags to the Birkin bag.

From an IP lens, fake products infringe the trademark and copyright of the designer brand and have potential for creating confusion in the eyes of the public. However, most consumers of this grey market aren’t really deceived into believing that the replicas are in fact original. The only reason consumers resort to buying off the grey market is cost and not because of naivety of the product being genuine. Knock-offs often serve as effective advertisements and spur demand for the real product by enabling products to filter down to the average person. They in fact attach an aspirational value to the original. Consider these figures, even though China is the largest producer of counterfeit products, it is the world’s largest consumer market for luxury goods accounting for 31% of market share.

Gucci has since publicly apologized for its warning. Gucci’s Chinese parent company, Kering issued a statement “We regret any misunderstandings that may have been caused and sincerely apologise to anyone we may have offended through our action.” Perhaps Gucci understands that this is a culturally sensitive issue or perhaps Gucci’s slowing growth in China brought about this contrition. Whatever be the reasons, Gucci no longer feels that the Chinese shops were trying to infringe their trademark and has decided not to pursue any further legal action.

KEYWORDS: copyright , trademark , intellectual property , legal action, infringe, replicas.