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Traders sue market over closures

By Cui Jia (China Daily)
Updated: 2009-04-10 07:41

Traders in Beijing's famous Silk Market have filed a joint lawsuit for more than $70,000 in lost earnings after being temporarily shut down during a clampdown on the selling of counterfeit goods.

Beijing Silk Street Market Co Ltd (SSM), which runs the mall, previously well known as a place to buy cheap designer knock-offs, imposed seven-day closures on 29 stalls this year.

But the company is now being sued for compensation, along with Hu Qi, president of Beijing-based intellectual property rights firm IntellecPro. A hearing started at the capital's Chaoyang People's Court on Wednesday and the case was adjourned.

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The closures followed a court-mediated deal between the market administrators and several luxury brands, represented by IntellecPro, in which the former vowed to deal with vendors who sold counterfeit clothes or accessories.

But the traders' lawyer claimed a report highlighting the alleged offenders by IntellecPro, which represents Burberry, Gucci, Chanel, Louis Vuitton and Prada, lacked the evidence to prove vendors were selling fake goods, reported the Beijing Daily.

"They could have been sold by street vendors who just happened to be in front of the traders' stalls," he said.

Wang Zili, general manager of SSM, also welcomed more proof of the transactions from IntellecPro, but added: "We need more evidence to convince the vendors fair and square." The market traders have demanded 19,000 yuan ($2,700) each in compensation to cover their losses during the closures, including 5,000 yuan for the damage to their reputations.

Their lawyer claimed the market did not have the proper authority to shut down the stalls, adding the order must come from the China Administration for Industry and Commerce. However, SSM say they took the action to prevent further lawsuits from luxury brand manufactures and that the penalty is clearly stated in the Silk Street Market management regulations.

"The market has a major responsibility to stop vendors selling counterfeit products," Mark Cohen, an expert in intellectual property rights, told China Daily. "The management has a right to make sure vendors' activities in the market are legal."

The famous market moved to the five-floor mall from a shabby alleyway in 2005 as the administrators wanted to clear out fake goods and build it into a center for Chinese specialties before the Beijing Olympics last summer.

"There were no fake goods in the 1980s when the street came into being naturally," Wang told Xinhua News Agency. "The infamy came after the huge demand for fake brands from the Americans and Europeans, and later the Chinese locals.

"As long as the demand exists, there will be fake goods for sale. Many people come to the market especially for the fake brands."