South Korean Food Companies Join Forces to Sue Chinese Copycats

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China is infamous for its rampant “copycat” culture. Counterfeit and knockoff products continue to dominate China’s domestic markets despite the ongoing CCP (Chinese Communist Party) virus pandemic. Being fed up with losses, several South Korean food producers have recently joined forces to address the growing distribution of counterfeit products in China.

According to Korea Bizwire, the Korea Food Industry Association established a consortium of food producers to file a lawsuit against the two largest Korean food imitation producers in China—Qingdao Taeyangcho Food and Zhengdao Food—for violating intellectual property (IP) rights.

The consortium includes four South Korean food giants: CJ Cheiljedang, Ottogi, Daesang, and Samyang Foods.

To effectively advance the lawsuit, the companies acquired the assistance of the Korean Intellectual Property Office (KIPO) and the Korea Intellectual Property Protection Agency, according to Asia Business Daily.

While there have been many attempts by South Korean companies to sue Chinese imitators, this is the first time multiple companies have joined hands to launch a trademark lawsuit. As Korean food becomes more popular internationally, there is now a shared interest in addressing the growing number of trademark violations in China, especially as counterfeit cases have multiplied during the CCP virus pandemic.

CJ CheilJedang’s Dasida soup stocks, Daesang’s Miwon seasoning salt, and Ottogi’s vermicelli noodles are among the many products under the trademark litigation. These knockoffs are being sold online and in stores across China.

According to the Bizwire report, the Chinese imitation of Samyang’s “Buldak Bokkeummyeon” instant noodles is nearly identical to the original product, clearly intending to deceive consumers.

The loss of customers caused by the circulation of counterfeit products could severely damage these South Korean companies’ image and reliability as they all have registered legal entities in China.

According to a Korea Herald report citing South Korea’s national assembly member Lee Joo-hwan, the cases of corporate trademark theft in China increased from 977 in 2017 to 3,457 in 2020, a 3.5 times increase, citing the statistics from KIPO. Lee added that thefts of South Korean trademarks by Chinese imitators have surged since the CCP virus pandemic.

Lee said that stolen trademark examples include South Korea’s domestic chicken franchises such as “Goobne Chicken,” “Hosik I du Chicken,” and “Don Chicken,” as well as dessert cafe chain “Sulbing” and the dairy product “Seoul Milk.”

According to the report, from 2017 to August 2021, South Korean companies suffered about $27.8 million in damages due to the unauthorized use of trademarks by Chinese imitators. However, this amount does not include all cases of suspected trademark misappropriation, only the calculated loss based on the Chinese counterfeit trademarks preemptively registered in bad faith, suggesting an even greater loss.

Many major international brands have encountered cases of malicious trademark squatting in China, and some have even lost to their imitators in Chinese courts. Classic examples include Apple, Tesla, Toyota, and the recent court case of Japanese retail giant Muji.

In November 2019, the CCP amended its trademark law to strengthen protections against bad-faith trademark filings. As a result, it enabled a small number of foreign companies to win trademark infringement lawsuits in China, such as American sports apparel brand New Balance and South Korean sandwich brand Egg Drop and dessert cafe franchise Sulbing.

The Korean industry expects this consortium lawsuit to boost Korean food products’ IP value and warn potential Chinese imitators.

Chinese current affairs commentator Wen Rui told The Epoch Times that the copycat industry in China is large and systematic, involving a long chain of employment opportunities, as well as interests and participation of Chinese government officials.

“Just relying on the trademark law won’t solve the problem. Some foreign companies sued their Chinese imitators and won the case. This can only be an individual case. The Chinese government is under international pressure to protect intellectual property rights because lots of foreign capital is withdrawing. To improve the environment for foreign investment, they have to do it or at least make it look like they are doing it. But [the copycat industry] as a whole, it is impossible to change,” Rui added.