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Why Hong Kong people are the biggest losers in the Gucci paper handbag row

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South China Morning Post
Comment›Insight & Opinion

Haochen Sun

Haochen Sun says the moral outrage over the luxury brand’s accusation of trademark infringement has encouraged law-breaking behaviour, yet the real issue of concern, social inequality, has not been addressed

Much to everyone’s surprise, Gucci apologised last Friday to Hong Kong stores selling funeral paper offerings after sending out a warning letter accusing them of infringing its trademark right. It may seem this battle has ended with the poor “ants” (stores) triumphing over a rich “elephant” (Gucci). This sentiment will resonate with many people. But, in fact, neither of these parties is the real loser: rather, it is the general public.

First, while Gucci rushed to apologise “to anyone [its staff] may have offended”, the ants-versus-elephants sentiment has encouraged law-breaking behaviour. Second, the public attention on the case has nevertheless failed to focus on the underlying social justice problems in Hong Kong and many other parts of the world.

It is clear from the public response that few people gave serious consideration to whether Gucci’s trademark right was being infringed by sales of the paper offerings. Instead, Gucci was accused either of showing no respect to the Chinese tradition of burning paper offerings to the dead or of waging a war against small business owners on main street.

Bear in mind that the paper replicas of Gucci handbags bore the intertwined “GG” logo, which Gucci has registered with the Hong Kong Intellectual Property Department. Lawyers who were asked by the media to comment on the case argued that the paper offerings did not infringe Gucci’s legal right to prevent consumer confusion under our trademark law. Surely, no reasonable consumer of luxury handbags would be misled into believing the paper replicas were Gucci-made handbags. The venue and price at which they were sold defy any second-guessing that Gucci had ventured into the funeral products market.

But the paper offerings did infringe another legal right: Gucci’s right to prevent its trademark from being diluted. In an interview with The New York Times, I emphasised that associating Gucci with funeral products or services blurred the distinctive character of the trademark that Gucci relies on to merchandise its goods. That association would harm the firm’s reputation as a supplier of luxury goods.

Paper handbag offerings are of such a low quality that they are suitable only for burning. Funeral shops therefore may have taken unfair advantage of Gucci’s brand reputation. The selling power of their paper offerings stems from the Gucci trademark, into which Gucci has invested a huge amount to market itself as a luxury brand. All such uses of the trademark that dilute the brand are prohibited by Hong Kong’s trademark law.
In socially polarised Hong Kong, authority of the law has become more important than ever

Arguments about whether Gucci’s legal right has been infringed have not figured highly in the swirling outcry over the warning letter. If the public sentiment against Gucci’s action persists, it is conceivable that more laws could be violated on the same basis. As long as the public lauds certain actions, then more private property, personal liberties or even public resources could be encroached on. The proliferation of law-breaking action could eventually threaten the institution of the rule of law. The ultimate victims would be members of the public.

In socially polarised Hong Kong, authority of the law has become more important than ever. Even though the operational costs and political risk of doing business keep increasing, many people and companies retain confidence in Hong Kong because of its legal system, which is still effective enough to make the city safe and business-friendly. From this perspective, we must say “no” to breaking the law and taking illegal advantage of private property (trademarks included).

On the other hand, the public’s celebration of Gucci’s apology has muted discussions about how to promote social justice in Hong Kong and many other parts of the world. Actually, most buyers of paper replicas of luxury goods are in the low-income bracket. They burn the replicas with the wish that their deceased relatives can enjoy these goods in the afterlife, even though they could not afford them during their lifetime.

This perspective inspires many to take the side of the funeral shop owners because these shops are seen as helping low-income people gain psychological comfort by momentarily “lifting” them out of their income bracket. The supply of “luxury” paper offerings meets the market demand for social justice. Rich and poor can now equally afford luxury goods for their deceased relatives.

But do “luxury” paper offerings actually promote social justice? Not at all. After all, the dead are dead. They will never be able to enjoy luxury goods. Even grander “luxury” offerings such as paper yachts and jets also won’t help. The psychological comfort felt by their relatives is merely an illusion.

Rather than being outraged by Gucci’s actions, we should be acting to help those who are alive but suffering from social inequality. We should demand that “luxury” paper offerings to the dead not be used as a tool to cover the sufferings of the living. Hong Kong has terrible income inequality – one in five people live in poverty, while about 100,000 people live in cage homes and on rooftops. Many other parts of the world are similarly gripped by inequality. According to the World Food Programme, one in seven people worldwide live with hunger and one in four children in developing countries is underweight. Around the globe, there are more hungry people than the combined populations of the US, Canada and the European Union.

So, should we still talk about the “human right” to burn “luxury” paper offerings for the dead? No. We should face the urgent problem that many of our fellow human beings are dying of hunger. We have to save lives first and then strive to improve the quality of life for the poor.

Gucci serves luxury consumers who control much of the world’s economic and political resources, so the public should take its apology over the funeral offerings as an opportunity to reiterate that luxury-goods companies have a social responsibility, and that they urgently need to act on it. Luxury-goods companies and their consumers could reduce income inequality and produce or use goods that promote ethical consumption. A civilised society is one in which the rich take genuine care of the poor.

If we take the law seriously, we can raise a bolder suggestion: people should abandon “luxury” paper offerings. Let’s respect the ethos of environmental law. The making of paper has a cost – the lives of trees and the potential impact of burning, including air pollution and forest fires. If we take social justice seriously, we can raise another bolder suggestion: people should spend less on luxury goods. Let’s help poor people who are still struggling to make ends meet.

Haochen Sun is an associate professor at the University of Hong Kong’s Faculty of Law


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