Report highlights counterfeit food threat in China

The rapid growth of foreign food companies operating in China is driving the increase in the number of counterfeit goods in the country, says a new report.

In findings published this month, the United States Department of Agriculture (USDA) estimates that about 20 to 30 per cent of all US food products sold within the country are counterfeit. 

The problem stems from some local companies and individuals looking to tap into the popularity of branded products. The report is likely to make critical reading for foreign food groups, who wish to prevent losing revenues through products infringing on their brand reputation.

Some major companies in the past have already come under threat in the market from so called "copycat" versions of their products, despite growing cooperation from the Chinese government over the issue.

If businesses are therefore to protect there interests and property within the country, they will need to ensure their property rights are fully covered, the USDA warned.

Though the USDA praised the Chinese authorities for being active in protecting intellectual property under international law, it highlighted some problems still facing companies looking to register patents and trademarks.

The USDA blamed these problems on a government delay in bringing together the country's patent, trademark and copyright offices under the State Intellectual Property Office (SIPO).

Though the proposed merger was suggested following the formation of SIPO in 1998, the USDA revealed these changes still had "yet to occur."

In order therefore to ensure companies remain fully protected through Chinese law, the USDA highlights a number of steps that should be taken to prevent possible breaches of their property.

As well as registering with China's trademark office, businesses should also move to protect any related internet domain names, as well as Chinese language versions of their trade marks.

The latter measures are seen as being particularly crucial, due to the lack of a "first-to-file" system in the country that would require proof of prior use or ownership from companies who claim trademarks.

However, in certain situations the Chinese government has already been stepping in to repeal trademarks deemed as being unfairly registered.

Not all companies have been this lucky though, last year Italian chocolate maker Ferrero revealed that "copycat" products of its brands in China were hindering its growth in the country.

Despite having been operating in China since 1984, the group decided to take the copyright issue to the country's courts.

The move came over allegations that local confectioner Montresor had packaged one of its chocolate products identically to Ferrero's, Ferrero Rocher brand.

Lawyers for Montresor claimed that the Chinese firm uses its own original packaging design.