BIZCHINA / Trademark
Crocodile rock
By YIN PING (Business Weekly)
Updated: 2006-02-13 09:41
SHANGHAI: Ang Boon Tian coughs in a meeting room at Beijing's Kunlun
Hotel. It is clear that he isn'
BIZCHINA / Yang Yuanqing
Lenovo goes global with new PCs
By Andrea Tan (Bloomberg)
Updated: 2006-03-01 08:33
Lenovo Group Ltd said costs will increase this year as the company begins
selling computers under its own brand to grab share in the small-business
market from larger rivals Dell Inc and Hewlett-Packard Co.
"There'll be an increase in marketing costs, but there's going to very
little cannibalization" on our sales, Andrew Sotiropoulos, vice-
president for Asia Pacific, said at a media briefing in Singapore on
Monday. "We are driving more revenue through the increase in spending."
Sotiropoulos declined to provide specific figures.
A Lenovo employee displays a laptop at the China International high-tech
exhibition in May 2005. China's largest computer maker launched its own
brand of computers in the Asia Pacific region, signalling its intentions
to grow the Lenovo name outside its home base. [AFP]
Lenovo, the world's third-biggest personal-computer maker, last week
started selling its own-branded computers outside China to gain market
share, the first time since buying International Business Machines Corp's
(IBM) PC unit.
The Purchase, New York-based company is also building name recognition
through an Olympic sponsorship until the 2008 Games in Beijing.
"Pushing into the consumer space is pricey, with costs associated with
marketing and brand awareness," said Bryan Ma, a Singapore-based
associate director at researcher IDC. "The challenge is compounded for
Lenovo as it's not widely known outside of China."
A security guard walks infront of the Lenovo headquaters in Shanghai,
August 10, 2005. - Lenovo Group Ltd., the world's No. 3 PC maker, will
soon start selling low-priced computers targeted at small U.S.
businesses, taking the Lenovo brand outside China for the first time,
said an analyst familiar with the matter. [Reuters]
IDC expects computer shipments in Asia's small-business market to gain 11
per cent annually until 2009, from an estimated 6.7 million units in
2006, Ma said.
Lenovo had a 4 per cent share of the small-business market in Asia in the
12 months ended September, Sotiropoulos said. Small businesses account
for about 40 per cent of PC shipments in Asia, he said.
"You don't have to be a mathematical whiz to know that if we do well in
the small-business segment, we do well overall," Sotiropoulos said in an
interview.
Before February 23, Lenovo sold only products inherited from IBM, such as
the ThinkPad notebook targeting large and mid-size businesses, outside of
China.
"In its legacy as IBM, we did not do very well" in the small-business
market, Sotiropoulos said. "For very practical reasons, we need and want
to do better" in this market.
Lenovo bought IBM's PC unit for US$1.25 billion in May 2005 to stave off
competition from Dell and Hewlett-Packard, the world's two largest PC
makers.
(China Daily 03/01/2006 page11)
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t enjoying the capital's notoriously cold
winter weather.
The second generation Malaysian-Chinese chairman of Singapore Crocodile
International Private Ltd travelled to these colder climes in early
January to speak to the Chinese press about the company's presence in
China.
Singapore Crocodile continues to face the longstanding question of
whether it's even worthwhile staying in China and co-existing with French
rival Lacoste, which sells clothing with a similar crocodile logo. The
decisive factor is whether Singapore Crocodile can continue using its
trademark logo, which it has used for 12 years, albeit illegally until
recently.
A Beijing court will reach a decision on this matter soon. If Singapore
Crocodile loses the case, the company could face catastrophic losses.
"The 350 million yuan (US$44 million) we paid for our brand will go to
waste, our 20 plants and 1,500 shops will close and 16,710 workers will
be jobless," Ang says.
The company's new 120 million yuan (US$15 million) building, Cartelo
Plaza in Shanghai, will be completed by the end of the year. As planned,
it will move its global headquarters from Singapore to Shanghai next year.
Over the past 12 years, Singapore Crocodile has built one-third of its
global business in China, capturing a much larger market share than
Lacoste. If the company loses the court case, these efforts will have
been in vain, Ang says.
It will also have to compensate its dealers throughout the country. The
company has signed contracts with four dealers that have been sued by
Lacoste for selling Singapore Crocodile sportswear, and has promised to
compensate them for their losses if it loses the case.
"If we lose the case, we can't continue our business in China," says Yi
Qianru, managing director of Shanghai Cartelo Garments Co Ltd, the
company's China office.
Tit-for-tat
The case between Lacoste and the State Trademark Evaluation Commission
opened on November 28, 2005. Lacoste took the commission to the Beijing
No 1 Intermediary People's Court last July, and demanded that Singapore
Crocodile be prevented from registering its trademark in China. Singapore
Crocodile's logo faces the left while Lacoste's faces the right, but
Lacoste does not believe this difference will be noticed by consumers.
Even with 'Cartelo' written next to the logo, Lacoste insists that
Singapore Crocodile's trademark looks no different from its own.
"You can't just add some letters and give the crocodile a different
direction, then say your logo is different from mine," says Huang Hui,
Lacoste's acting lawyer.
"If so, anyone could easily make different trademarks and abuse the
crocodile logo. That's unimaginable."
The only possible path to reconciliation, Huang says, is based on the
condition that Singapore Crocodile recognizes Lacoste's exclusive rights
to the crocodile logo. This has happened in several disputes with other
companies over the past year. Hong Kong-based Crocodile Garments Ltd and
Zhejiang Crocodile Garment Co Ltd both agreed to give up their crocodile
logos within an agreed timeframe, but Singapore Crocodile will not accept
these conditions.
"That won't work," Yi says, adding that the exclusive rights to the
crocodile logo should be decided by the court, rather than by Lacoste or
another company.
If Singapore Crocodile demanded the same conditions in Japan, where it
first registered its crocodile logo, Lacoste would never be able to enter
that market.
Looking back
Both sides say they did not know about each other when Lacoste was
expanding its sportswear business in Europe and Singapore Crocodile was
registering its crocodile trademark throughout Asia. They realized they
had similar logos when Lacoste started expanding into the Asian market in
the 1960s.
When Lacoste tried to register its trademark in Japan, it found Singapore
Crocodile had already registered a crocodile logo. The Singapore company
objected to Lacoste's registration at first, but the French firm fought
back by saying the two trademarks were different enough for customers to
distinguish between them. After three years of lawsuits, the two reached
an agreement.
Ang says the Singaporean side believed competition was inevitable and
that both sides should be given room to grow. Lacoste then registered its
trademark in Japan. The company later proposed that the two sides sign an
agreement covering the use of the crocodile logo in other Asian markets.
In 1983, they agreed to co-exist in Singapore, Malaysia, Indonesia,
Brunei and Taiwan. In return for permission to register its trademark in
these markets, Lacoste paid US$1.5 million to the Singaporean company.
Singapore Crocodile later also allowed Lacoste to register its trademark
in other markets where it had registered first.
Ang and Yi have long been upset that Lacoste did not reveal when it
signed the agreement in 1983 that it had registered the trademark on the
Chinese mainland in 1980. This was not known until 1993, when Lacoste
objected when Singapore Crocodile tried to register its trademark on the
mainland.
The State Trademark Evaluation Commission ruled in 2003 that Singapore
Crocodile's Cartelo crocodile trademark was distinguishable from
Lacoste's and could therefore be registered. Lacoste objected to the
ruling and asked for a re-examination, but a May 2005 ruling reinforced
the decision.
It took the Singaporean company 12 years to register its trademark on the
mainland, but the battle is still not over.
Lacoste filed a suit against the commission two months later, asking it
to cancel the ruling.
Up in the air
"I don't know why Lacoste insists that our crocodile trademarks are
similar in China while it agrees in other countries that they are
different," Yi says.
Both sides are confident, and Lacoste says it was simply the first to
have the trademark registered on the mainland.
Wei Yanliang, a researcher from the Research and Development Centre of
the State Intellectual Property Bureau, says it is difficult to predict
the outcome.
It is still rare for Chinese courts to handle intellectual property
disputes when with both sides are from foreign countries.
Wei says these kind of cases will become more common in the future as
China further integrates into the global economy.
(For more biz stories, please visit Industry Updates)
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