The Hong Kong Toys & Games Fair, Asia's largest toy exhibition, is the place where the factories of China meet the Western companies filling up their retail shelves.
It's also a place where China and the West confront sometimes very different ideas about intellectual property, as American plastic yo-yo maker Duncan Toys recently learned first-hand.
Duncan, which makes some of the world's best known yo-yos, was exhibiting at its first Hong Kong toy fair and found a Chinese competitor with products it believes violates Duncan trademarks, said Mike Burke, national sales and marketing manager, in a Jan. 14 interview at the show.
Duncan is a division of Middlefield, Ohio-based plastics processor Flambeau Inc.
Burke said the Chinese firm, Shantou Chenghai Hanye Toys Factory, was displaying packaging for its yo-yos that Duncan said copies its red, hot-dog-shaped logo design and its well-known Duncan Boy image of a tousle-haired kid doing yo-yo tricks.
So Duncan filed a complaint with the trade show organizers, the Hong Kong Trade Development Council.
TDC's intellectual property specialists looked at Duncan's Hong Kong registered trademark and other evidence, and agreed with the American firm, ordering Hanye, located in Shantou, China, to stop displaying infringing merchandise.
As trademark disputes go, it's a pretty minor one, nothing likely to generate much attention beyond the two firms.
But the case and its resolution provide an interesting look into the sometimes Wild West nature of intellectual property at trade shows in China, where about 70 percent of the world's toys are made.
Duncan, for example, could arguably claim a victory with the show organizer's decision. But the company was unhappy with the solution adopted by Hanye, and felt the trade show organizers did not go far enough.
The Chinese firm put small pieces of white tape over the image of the Duncan Boy on its packaging, but continued to display the products at its booth.
I'm not happy with [the trade show organizers] allowing that, said Brent Bellini, import buyer and planner with Duncan. They should have removed it. In the U.S., they'd have to remove the product, just get rid of it. Here they let them still have it, which is not good.
Trade council officials declined to comment on the specific case, but said in an e-mail summarizing their policy on intellectual policy rights that companies found to be infringing may be asked to remove the product or material from display.
The statement did not elaborate and said the handling of each case can vary based on the judgment of TDC's legal adviser.
Hanye, for its part, said it was not aware of Duncan's logo or its Duncan Boy image, or that it had been registered in Hong Kong.
Hanye General Manager David Wang said his company developed the logo after hiring a Chinese designer in 2008, who presented it to them.
In an interview in his booth amid yo-yos with logos for Coca-Cola, Toyota and the Beijing 2008 Olympics, he said Hanye has since registered both its image of the boy and its own red, hot-dog-shaped logo in mainland China.
Wang said Hanye's design is different than Duncan's, pointing out that his logo has the word Hanye inside the red oval while Duncan's uses the word Duncan.
Bellini said he does not believe Hanye was not aware of Duncan's logos. He said a Duncan vendor in China supplied some logos as a sample to Hanye when Duncan was looking for potential suppliers, and he said a Duncan employee actually visited Hanye's factory as part of that process.
Duncan is an 80-year-old company with a well-known name in the industry, Bellini said, and introduced this particular Duncan Boy character in 2004.
To show that it is the same image, he said Duncan's trademark includes a visual signature put in by its designer, who shapes the boy's shoelaces into an S and an R, the designer's initials.
The Duncan Boy logo has since become standard on much Duncan packaging, even in non-yo-yo products, as minimal research would show, Bellini said.
If you are going to be in the yo-yo market, you know who the competitors are, you know all the top brands, Bellini said. If you are going to knock off something, you have to know your market and you have to do a little research.
He said the Hanye yo-yo's cover also includes a design very similar to that of another top brand.
Burke said Duncan was previously aware of Hanye's very similar packaging, after a friend sent him copies of Hanye's catalog from the January 2009 Hong Kong Toys Fair, and another friend sent a Hanye yo-yo purchased in Singapore, with the boy image.
Wang said Hanye does not directly export to Singapore, but he said a customer of the company may have exported there.
Duncan last year sent a letter from a Hong Kong lawyer to Hanye, telling Hanye to stop using the logo, but then the emblem showed up at this year's Hong Kong fair, Burke said.
Copying is very common in the yo-yo industry, Burke said, but use of a logo character so similar required action.
With yo-yos, there are knock-off companies that are knocking off the knock-off companies, Burke said. From that sense it's not right, but it's not unusual. But when you get something so blatant as to copy a character
It's not clear what impact, if any, this small trade-show tiff will have in the real market outside the show, which ran Jan. 11-14.
Duncan managers at one point went to the Hanye booth to discuss the situation, and when Hanye staffers later recounted that meeting to a reporter, one of them asked for advice on the situation, then said they had asked Duncan staff if the U.S. firm was interested in future cooperation.
In the same interview, one Hanye booth employee repeated that the company has trademarked the boy image and its logo design in mainland China, and will protect that.
If they use their logo in the Chinese mainland, we will give them a complaint, said the staffer, who declined to give her name. That statement was quickly echoed by a second Hanye booth employee.
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