"We own the ZigBee brand in China," says the Wulian Group in a very public response to Tobin Richardson, the chairman of the ZigBee Alliance.
The claim to ownership must have seemed as hard as a slap in the face.
Wulian’s forceful response came after the chairman of ZigBee Alliance emailed an announcement (in Chinese and English) to more than 400 ZigBee Alliance members (and interested stakeholders) claiming Chinese enterprise Nanjing IOT Sensor Technology Co., Ltd. (known as the "Wulian Group") "has been inaccurately and intentionally mis-advertising its products as being "ZigBee Certified."
So, in fact, ZigBee Alliance took the first "public" slap. Maybe Wulian Group’s slap was just payback.
It is a story as old as East/West trade and to any Westerner doing regular business in Asia, and it has a familiar plot. (Or, to be fair, even equally familiar to any Asian brand doing business in Europe or USA.)
An organization (or company) tries to do business in a very foreign market (a culturally different market-- and when we say "culturally" we are not talking about the music & arts). It goes to market through cooperation with a local company or organization-- and then finds itself left holding the bad end of the stick.
This year the ZigBee Alliance has been "negotiating repeatedly" on the promotion of ZigBee technology in the China market and on the ownership of ZigBee trademarks with the CEO of Wulian Group and his negotiation team.
The ZigBee Alliance apparently insisted Wulian Group unconditionally transfer the ZigBee trademarks to ZigBee Alliance. That would be the normal response of an international brand holder when it learns a local partner has filed locally for brand ownership.
Wulian Group’s answer? These ZigBee trademarks now "are Chinese intellectual property acquired by Wulian Group as per Chinese laws via a legal way and in the country of China. These trademarks should belong to the enterprises, institutions, or alliances that are registered in China, or the branches that are founded by the Chinese relative authorities."
That’s right: our country, our rules. Big, fat cultural difference Number One: China doesn’t traditionally believe in Western-style "intellectual property."
And difference Number Two: China doesn’t believe in international standards that aren’t home grown, especially ones where money must go to a foreign standard holder. Just ask Intel about their wireless experience.
Yet, you would have a tough time finding a lawyer in China who doesn’t believe that IP enforcement in China is now improving, particularly with respect to trademarks.
IP enforcement is improving in China for two main reasons. First, with more international experience behind them, Chinese companies now realize it makes sense to register their trademarks, copyrights and patents in China so they have an opportunity at being able to protect them (in the courts). Secondly, China’s courts increasingly realizing the importance of protecting IP in China because Chinese companies increasingly want them to grant IP protections (not only to stop Western lawsuits but to protect themselves against other Chinese companies.)
At rAVe Europe, we don’t have any inside information on what happened… but this story sounds like it started when the two organizations (ZigBee Alliance and the Wulian Group) established its "ZigBee Alliance China Regional Headquarters" in the Wulian Group's Shanghai office in 2012.
It’s not uncommon for an industry alliance to get support from a local company, including free or cheap office space. And it’s not unusual for local companies to cooperate closely with an international alliance in order to improve the company’s reputation, know-how and even sales position.
Wulian Group says it "has never claimed that Wulian Group has represented ZigBee Alliance on any occasion" but admits it has used the "ZigBee Alliance China Regional Headquarters" title in some promotional materials.
"We believe it's not improper to use the title, and Wulian Group has never received any written objection from ZigBee Alliance," says Wulian.
It sounds like ZigBee Alliance thought they had their backs covered by a local partner and never contemplated they might lose their international brand. Probably it is inconceivable to an industry-wide association that any company would or could even try to hijack their brand.
That is, if you (as a Westerner) have a brand built with the cooperation of hundreds of paying members and recognized worldwide…then it would be hard to believe that someone you meet in a foreign country could take that unique brand, file for a local trademark and get away with it. (For example, how can you say you are ZigBee and at the same time say you are "a participant in ZigBee" and have unique product "based on ZigBee?")
Let’s not blame China or the Chinese: who knows which nationality first invented the trick of representing a foreigner’s brand while registering the very same brand as yours in your own country.
This type of identity theft is similar to companies in Europe who rushed to file Pioneer or Sony brand in their own countries in the 1970s. Some of those who filed were, guess what, local agents for those very same brand owners. And the same brand land rush happened when the internet started: we have even invented a term for it, cybersquatting.
Now the tire has hit the road for ZigBee in China-- and the friction is apparent. ZigBee Alliance wants its brand back and clearly wants a divorce from the Wulian Group. And both want custody of ‘the baby." ZigBee Alliance gave birth to the brand overseas-- but in China, Wulian Group feels it has introduced and developed the brand.
Wulian believes, it seems to us, that they are a "participant" in ZigBee Alliance but have created their own unique flavor of ZigBee which they believe is now famous in China only because of Wulian's own efforts. (Yet being a member of "ZigBee Alliance" was important enough to mention on each and every sales communication. See samples in the photos below.)
Not satisfied only to refute ZigBee Alliance’s ownership of the "ZigBee" brand, Wulian goes on to slap ZigBeeb Alliance a second time.
In their public response, Wulian Group states: "At this crucial market promotion moment, as the chairman of ZigBee Alliance, Mr. Tobin not only allegedly failed to concentrate on the strong challenge of Bluetooth, Wifi, and other technologies, but wasted precious time and energy in criticizing Wulian Group who has made great contributions to the popularization and promotion of ZigBee technology. For that, we are deeply confused and regretful."
That’s right, ZigBee Alliance: Better attend to your own business.
The public slapping doesn’t stop there as Wulain's released letter further says: "Wulian Group is still sincerely hoping that ZigBee Alliance will consult with Wulian Group and relevant Chinese government departments about the legal usage of ZigBee trademarks and product certification in rational methods. Wulian Group also hopes ZigBee product suppliers who plan to enter the Chinese market will use "ZigBee" marks with caution and contact us actively to discuss the authorization of legal usage of ZigBee trademarks in China. Wulian Group also welcomes ZigBee product suppliers who plan to enter the Chinese market to contact us and discuss the trademark usage authorization. Meanwhile, Wulian Group has appealed to Chinese Trademark Office (CTMO) and other related judicial departments to protect Chinese enterprises' legal rights, and make sure that intellectual property gets its due respect."
Yep, any ZigBee Alliance member going into China and using the ZigBee brand you've already paid for…well, Wulian Group may now sue you in local courts.
So let’s review our analysis of the interesting implications of this public spat.
•ZigBee Alliance has lost control of its brand in China and must fight Wulian Group in court… ZigBee Alliance probably can’t win locally as Wulian Group has home court advantage. (It would be like Apple winning against Samsung in a Korean court. Or Samsung winning in USA against Apple.)
•Wulian Group, now that negotiations are out, can overtly exert their control of the ZigBee brand in China…even to the point of threatening other members of the ZigBee Alliance who sell in China.
•ZigBee Alliance may be able to tackle Wulian Group outside of China…maybe stop exports to USA/Europe and at the least stripping Wulian Group of one of its obviously most powerful selling points (That it is a ZigBee Alliance member, Regional Office of ZigBee Alliance and products "based on ZigBee.")
•ZigBee Alliance might try to make a new alliance in China and set local against local. It would need to find a new partner bigger and stronger than Wulian Group (and yet interested) or build a group of Chinese companies that might stand to suffer locally if Wulian Group prevails.
•Wulian Group can act quickly and tie up ZigBee Alliance, causing so much damage that ZigBee Alliance ends up having to buy their own brand back. No one is fighting about going down in the history books as ZigBee owner in China; don’t forget it’s all about money.
One last reflection: for this mess to exist, one thing is clear: ZigBee Alliance zigged when it should have zagged.