EU seeks "gentleman's agreement" on China fakes

BEIJING, May 25 (Reuters) The European Union today called on Chinese shop owners and makers of name-brand clothing to reach a deal on stemming the sale of fake goods without sparking a surge in court cases.

A recent landmark case in which a Chinese landlord was fined 100,000 yuan (12,500 dollars) for allowing fakes to be allowed to sold on his premises had sparked a desire among many foreign firms to resort to the Chinese courts, said EU ambassador Serge Abou.

Abou said he hoped an understanding between foreign brands and Chinese landlords could be signed when EU Trade Commissioner Peter Mandelson visits Beijing next week.

''The idea is to try and have a kind of gentleman's agreement, understanding and exchange of goodwill on both sides,'' Abou told a news conference.

''If it works, okay, if not there will be massive litigation and massive condemnation.'' The case in question was at Beijing's Silk Market, a tourist destination famous for the kind of cheap knock-offs of luxury brands that have made China's record on piracy an irritant in trade relations.

Under the deal Abou outlined, landlords would agree not to permit sale of counterfeit foreign brands in their stores. If an agreement could be reached in the Chinese capital, it could eventually be replicated nationwide, he said.

But cracking down on intellectual property rights violations will be a tough task in China, where the government has pledged measures to curb piracy but where bootleg copies of everything from DVDs to the latest fashions are sold across the country.

The European Union and United States have maintained pressure on China to combat counterfeits, which US software and entertainment firms say costs them 2.5 billion dollars a year.

REUTERS PR PC1640