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Digital Asia: is your brand Internet-ready?

The first phase of the Internet revolution created a wealth of both opportunities and challenges for brand owners and legal practitioners. How will the continuing development of the digital economy shape the landscape in Asia and what do companies need to do to protect and develop their brands? Peter Leung reports.

Speakers on today’s panel “IP Issues in the Digital Era: Impact of the Digital Revolution” will discuss what the continued growth and development of the Internet will mean for brand owners, especially those looking to expand their presence in Asia. According to moderator Chander Lall of Lall & Sethi Advocates in New Delhi, many of the effects of digitization won’t necessarily be felt just within the confines of trademark law, but in how brand owners will structure their businesses in growing markets like India and China.

History will not repeat itself

While the World Wide Web gained mainstream acceptance in countries such as the U.S. and UK in the 1990s, the shift came a bit later in Asia. Because of this, Lall points out that the development patterns here will not be a rehash of what happened in Europe or North America.

For example, Lall explains that the story of Internet retailers and marketplaces like Amazon and eBay in the U.S. has been one of shift and disruption, namely away from that of big-box stores. While large physical-space oriented retailers like Wal-Mart are still prominent in the U.S., online competitors have forced them to adapt, usually by increasing their own online presence. However, the development patterns in a country like India will be different. “Countries like India don’t have existing big brick and mortar chains and the associated infrastructure, like Wal-Mart in the United States,” he says. “It’s jumping straight to Internet shopping.”

The form of Internet access will be much different as well. Though countries like China and India are still considered by some to be “developing,” Internet use has been increasing rapidly. Moreover, many of these new users are going online through mobile devices such as smartphones, bypassing the personal computers that U.S. consumers used in the ‘90s. Similarly, the more developed markets in the region, like South Korea and Hong Kong, have some of the most advanced and affordable mobile internet access networks in the world.

This too will have a big effect on how retail grows in these markets and the innovations that develop. Lall points to South Korea as an example, where subway riders can shop for groceries from kiosks with QR codes for various products. After scanning the codes with their phones, shoppers can arrange for delivery to their homes.

This new and developing business reality will have a considerable effect on how companies protect and promote their brands. While it is a given that laws are often playing catch up to developments in business, this is especially true when businesses themselves are trying to adapt to changes driven by the Internet.

Traditionally, anticounterfeiting work involved tracking down and gathering evidence against counterfeiters in the physical space. Counterfeiters often peddled their wares in marketplaces and bazaars, such as Beijing’s Silk Market, and enforcement professionals focused their efforts on not only raiding the sellers, but also scouting these locations and tracing the supply chain backward. These actions can result in the seizure of a large number of goods in a single action or even identifying the manufacturers of the fakes.

Online storefronts for infringing goods make this task much more difficult and require new approaches. “Finding an online shop selling fakes is not hard, but actually physically catching the goods is a lot more difficult,” says Lall. “Investigators have to use new tactics, like smaller trap purchases and finding ways of following the money trail back up the supply chain.”

It’s a diverse world

The Internet has also helped brand owners reach consumers around the world. While that has been a great opportunity, the borderless nature of the Internet also presents its own brand protection challenges.

Though trademark lawyers focus on brand protection issues, the panel will look to put this in the bigger context of global business growth and brand development. As Lall points out, many of the developments in this area will be not just about IP protection, but about how companies adapt their business models and logistics to growing economies that come of age during the digital revolution. In this fast-changing environment, new players can quickly overtake established players.

“If you look at lists of the most valuable brands in the world, many of them are Internet companies or in related sectors, like Apple, Google and Amazon,” he says. “Google for example, didn’t even exist 20 years ago, and now it’s the second most valuable brand in the world. What will be the world’s most valuable brand in 10 years? Maybe it’s not even in existence yet.”

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