It may be 2009, but it appears that in some sectors of corporate Yunnan, other companies' intellectual property rights mean very little.

Yunnan-based coffee producer Hogood Coffee (云南德宏后谷咖啡有限公司) is playing the victim after government employees confiscated Hogood non-dairy creamer which was illegally using the "Coffee-Mate" (咖啡伴侣) name, which in China is a registered trademark of multinational food and beverage giant Nestlé.

On September 3, around 12,000 bags of Hogood-produced non-dairy creamer packaged under the name "Coffee-Mate" were seized by Industrial and Commercial Bureau employees in the Panlong district. Panlong officials confirmed the next day that the confiscation was a response to a complaint filed by Nestlé.

However, on September 15 a Nestlé China public relations manager reportedly claimed that Nestlé had filed no such complaint. The source of the complaint is currently under investigation by the Panlong government.

Hogood CEO Xiong Xiangru (熊相入) told reporters after the confiscation that the company had no idea that Coffee-Mate was a trademark – despite it being clearly marked as such on all Nestlé Coffee-Mate products.

Xiong's denial seems more implausible considering that Hogood has been a supplier of beans to Nestlé, which it grows on farms in Dehong in southern Yunnan.

The Yunnan Coffee Industry association is standing behind Hogood, insisting that Nestlé should not continue to "monopolize" the Coffee-Mate trademark and that Nestlé should let Chinese companies use the name on their own products.

Yunnan Coffee Industry Association vice secretary-general Hu Lu (胡路) put the following argument forward for why Nestlé should rescind the trademark that it has successfully built up in China and throughout the world:


Other Chinese coffee producers have been fined for violating the Coffee-Mate trademark in the past, according to the report.

Acknowledging that Nestlé was one of the main driving forces behind the development of China's coffee market, Hogood CEO Xiong pleaded to "big brother" Nestlé to rescind its Coffee-Mate trademark in order to bring "fair competition" to the Chinese coffee market.

The main questions that this particular episode of intellectual property rights violation raises are:

1. Should Nestlé or other companies with trademarks that have entered everyday parlance as a term representative of a certain type of product (think Coke, Hoover, Xerox) be forced to give up their trademarks because they've been marketed successfully?

2. If Nestlé were to bow to the weak logic of the above arguments and revoke its Coffee-Mate trademark in China, what would prevent the trademark being snapped up by a Chinese company who would prevent other companies from using it in China?

3. Is it possible that a company calling itself "Hogood" in English is unwilling to invest the necessary resources into the development of its own corporate identity and product branding, preferring rather to whine about "fair competition" after blatantly violating a registered trademark almost eight years after China's accession to the World Trade Organization?

Yunnan-based coffee grower Hogood Coffee has reportedly signed a deal to export 240 tons of coffee beans per month to the US, a major step for the company, which is aiming to become China's first listed coffee company.

The agreement between Hogood and Denmark-based ECUM Coffee Group's US subsidiary Atlantic (USA) Inc, will commence in April and will be the largest direct export of Yunnan coffee beans to a Western country by a Chinese company to date.

Yunnan coffee, which accounts for 98 percent of the coffee grown in China, typically reaches foreign markets via international suppliers including Starbucks and Nescafe.

Hogood's chairman Xiong Xiangru said that the company's development strategy in the coming years will be to move away from being a supplier to foreign companies and marketing its own branded products. However, Hogood – formerly known as Hougu – may find that its new English name is awkward to Western ears.

Hogood's export deal is the second major boost for the 'Yunnan coffee' brand in the last half year. Last November, Starbucks announced that it would begin marketing a blend featuring Yunnan coffee under the name 'South of the Clouds'.

ADB, Singapore Cooperation Enterprise to focus on Kunming projects
The Asian Development Bank (ADB) and Singapore Cooperation Enterprise (SCE) signed a memorandum of understanding with the Kunming municipal government on Monday to cooperate on infrastructure improvements in Kunming, according to Singapore media reports.

Focusing on building 'commercially viable infrastructure projects', ADB and SCE will advise the Kunming government on how to attract investment in areas such as water supply, wastewater management and transport management. SCE's involvement suggests that more Singaporean firms are likely to take an interest in investment projects in Kunming.

Yunnan coffee to be sold at Starbucks outside of China
Starbucks announced that it will market coffee drinks made with beans grown in Yunnan in markets outside of China, the first time that Chinese-grown beans will get major exposure beyond the mainland.

"We are proud to offer our customers the opportunity to experience a truly world-class coffee from China," Starbucks Coffee International president Martin Coles, said in a statement on the company's website.

The while business in markets including the US is suffering, Starbucks is enjoying the beginning of what is expected to be a prolonged period of expansion in mainland China, where it currently operates 350 outlets.

The Yunnan blend – no international launch date has been given so far – will be marketed as 'South of the Clouds Blend', and will incorporate beans from Latin American and Asia Pacific farms. It will be available on a trial basis in Greater Chinese Starbucks locations from January 11 to February 19 of this year.

Despite enjoying a generally positive domestic reputation, Yunnan beans will face a major challenge in overcoming international concerns about the safety of food products sourced in China. Starbucks said it intends to work closely with farmers from Baoshan to meet company sourcing standards and eventually develop a 'superpremium' Yunnan blend.

Kunming government outlines 2009 goals
Kunming mayor Zhang Zulin (张祖林) announced the municipal government's short-term goals on Tuesday at the fifth session of the 12th Kunming People's Congress, according to local media reports.

According to government plans, economic development will be the primary goal, with emphasis on expanding demand via growth in investment and consumption. Improving the city's traffic infrastructure is near the top of the list, followed by several social programs including strengthening social security, improving the city's medical and education hardware and software and encouraging new hiring through preferential policies.

The end of the year is a special time in which editors and writers around the world recycle content from the previous twelve months and repackage it as new content. We at GoKunming are not above this practice, so here's our look at the people and events that shaped 2008 in Kunming and Yunnan.

January
The year began with the Yunnan government shelving its plans to dam Tiger Leaping Gorge, while not necessarily sparing the Jinsha River – the headwaters of the Yangtze – from several new hydropower projects. Kunming banned the use of car horns and the city seemed to be getting a little less horn-heavy for about two weeks. A few days later the city – which is adding an average of 560 automobiles per day to its streets – issued its 900,000th license plate.

Pretty much all of southern China except for Kunming was at the mercy of a winter storm that paralyzed domestic travel and left thousands of travelers stranded in Kunming. Shangri-la (Zhongdian) was hit by heavy snowfalls that destroyed much of the area's livestock and crops plus telecommunications and power networks.

February
Yunnan was hit by a rash of sulfuric acid spills in late January and mid-February with more than 70 tons of the toxic chemical spilling near rivers and most likely entering local water supplies.

Kunming Municipal Party Secretary Qiu He was making waves a few months into his new post, ordering local newspapers to publish the names, titles, responsibilities and phone numbers of local officials in early February and firing a Chenggong investment official who fell asleep during a meeting.

Hong Kong director Stanley Tong signed an agreement with Dianchi National Tourist Resort to build a 3 billion yuan (US$418 million) television and film base that would become 'China's Hollywood'.

Yunnan's first international highway opened, connecting it with Vietnam's Lao Cai province.

March
Construction of the 'turtleback' flyover at Xiao Ximen commenced, throwing Kunming traffic into chaos. Work on the flyover – which is mockingly referred to as 'the newly added slope' (新加坡), or 'Singapore' in Chinese - was finished four months later.

Tens of thousands of bottles of counterfeit beer were found in Kunming's Majie area. The beers are expected to be the tip of the iceberg in terms of the amount of fake booze being sold around the city.

China played Australia's Socceroos in a World Cup qualifying match in Kunming that ended in a 0:0 draw. The match looked like a sure victory for China when it was awarded a late penalty kick, only for kicker Shao Jiayi to kick a slow roller into Oz goalie Mark Schwarzer's waiting hands. Team China went on to fail to qualify for the 2010 World Cup in South Africa.

April
The old standby F visa option disappeared for foreigners living in China as visa restrictions tightened in the runup to the Beijing Olympics, while protestors vented nationalist anger at Kunming's Carrefour outlets.

May
The International Union of Anthropological and Ethnological Sciences World Congress, originally scheduled to be held in Kunming in July, was canceled - apparently due to Olympic-related security concerns.

On May 12, an earthquake measuring 8.0 in magnitude centered in Wenchuan devastated much of Sichuan province and killed at least 69,000 people. Yunnan did what it could to help its neighbor to the north by treating victims from the disaster zone, taking children into its schools and raising money for the relief effort.

The Yunnan white-handed gibbon was declared extinct.

June
Free plastic bags at retail outlets were banned in China.

The Olympic torch passed through Kunming. The torch was originally scheduled to pass through areas including Beijing Lu, Wenlin Jie and Yuantong Jie, but its route was altered at the last minute, keeping it out of the view of most Kunming residents. The torch continued through Yunnan to the cities of Lijiang and Shangri-la before heading to earthquake-battered Sichuan.

The third hydropower station on the Lancang River – as the upper reaches of the Mekong River in Yunnan are known – went online.

July
Yunnan announced a total ban on the production, sale and use of plastic bags across the province, beginning on January 1, 2009.

Jackie Chan announced that he would open a 'Jackie Chan Peace Garden' outside Kunming in the city of Anning. Meanwhile, Kunming was in the middle of planting 800,000 trees throughout the city.

Two people were killed and 14 injured in double bus bombings that took place on public buses on Renmin Xi Lu. A militant Islamic group took credit for the bombings, a claim which was refuted by local police. The bombings were not declared solved until the suspected bomber blew himself up while trying to plant a bomb in Salvador's Coffee House almost half a year later.

August
After an unprecedented buildup, China hosted the 2008 Olympics in Beijing and several other cities, winning 51 gold medals, more than second-place US (36) and third-place Russian Federation (23).

Kunming unveiled its 12-year development plan, detailing how the city intends to handle a major influx in residents and an increasingly important role in regional trade and transport.

September
It was announced that Yangzonghai Lake, one of the largest lakes in Yunnan, was suffering from heavy arsenic pollution, with the bulk of the blame placed upon Yunnan Chengjiang Jinye Industrial and Trade Company, which allegedly found it easier to pay the relatively low fines for not treating wastewater than to purchase and install the equipment necessary for cleaning wastewater. Shortly afterward, Yunnan established a special court for handling crimes against the environment.

October
A government study of HIV/AIDS infections in Yunnan revealed that that women and gay men had emerged as the fastest-growing demographics for new infections, replacing intravenous drug users. It was also noted that new infections were moving away from ethnic minorities in rural areas to Han Chinese in urban centers throughout the province.

A group of fossilized crustaceans from 525 million years ago found near Chengjiang were said to display the first example of collective behavior among animals.

Citing difficulties with the local business environment, Hong Kong-listed property giant Shui On Land pulled out of its Yunnan development projects.

November
Starbucks announced that it would market Yunnan coffee via its hundreds of mainland outlets.

Kunming Airlines announced that it would launch operations in January 2009, the first step in its quest to become a dominant regional airline.

A delegation of Yunnan officials and businesspeople visiting India asked the Indian government to establish a consulate in Kunming to facilitate the visa application process for Yunnan residents wishing to take advantage of the direct flights between Kunming and the eastern Indian city of Kolkata.

The famed Shaolin Temple announced that it would take over management of four Kunming temples for 20 years, during which time it would receive all of the temples' revenue. Shaolin Temple's abbot was accused of being a 'CEO monk'.

December
A man stabbed three women and took a nurse hostage at the Carrefour on Longquan Lu, before being lured to a door where some rice noodles had been placed for him and getting shot in the head by a police sniper, ending the five-hour standoff.

Ground was broken on the 'South Asian Gate', a 72-story, 316-meter tall building that will be completed in four to five years and will be the tallest man-made structure in Yunnan province. It is expected to serve as a hub for business between China, Southeast Asia and South Asia.

A bomb exploded in popular foreign-owned cafe and restaurant Salvador's Coffee House, killing the man who was wearing a backpack with an ammonium nitrate bomb in it near the rear bathroom. Nobody else was hurt. Police concluded that the man, 30-year-old Li Yan of Xuanwei, had also been behind the unsolved bombing of two buses in Kunming in July.

Direct flights opened between Kunming and Taipei.

The GoKunming team thanks everyone who visited the site in 2008 and wishes all of its readers a happy, healthy and prosperous 2009.

Starbucks Corporation senior vice president and president for greater China Wang Jinlong said that the coffee chain will launch its first local coffee beverages in China, using coffee beans grown in Yunnan province, according to media reports.

In light of increasing food safety concerns in China, Wang said that Starbucks would establish a strict inspection and quality control system for local suppliers in Yunnan.

In 2007, Starbucks representatives visited with coffee farmers in southern Yunnan to help them meet company sourcing standards, with an eye on launching Yunnan coffee within China's domestic market and perhaps even internationally.

The move by Starbucks to localize some of its coffees in its China outlets is seen by analysts as a response to the current global financial crisis, trimming transportation costs and reducing tariffs paid on imported coffee beans.

Despite aggressive expansion in mainland China and sourcing Yunnan beans, Starbucks has yet to open retail outlets in Kunming or elsewhere in Yunnan.

Yunnan Dehong Hougu Coffee (云南德宏后谷咖啡有限公司) is aiming to expand from its current status as a coffee supplier to a major Chinese coffee brand over the next three years. The company announced on Tuesday that it intends to become China's first listed coffee producer by 2011, according to a Reuters report.

The company, which is reportedly restructuring itself and hiring accountants and lawyers for its listing, is best known for being a supplier to Nestle, but in recent years its own branded products have been appearing around Yunnan. Hougu instant coffee vending machines selling brewed coffee and cappuccinos can be found throughout Kunming.

"We're transforming from a coffee grower to a branded coffee maker and seller," Reuters quoted Hougu Vice President Deng Gang as saying. "Nestle is still our client and we're still too small to compete with it."

Hougu said it hopes to raise 3 billion yuan (US$437 million) by going public, which it intends to use for expansion. Although China's coffee market is small on a per capita basis, it is growing around 20 percent yearly, according to Starbucks, which announced that it would begin sourcing coffee beans from Yunnan in September of last year.

Yunnan is China's largest coffee producing region – its coffee beans have been a favorite of locals and travelers in the province for years, but the outside world is only just starting to wake up to its unique flavor and market potential.

Image: www.ynbrd.yn.gov.cn

Related article:

Starbucks warming up to Yunnan coffee

Yunnan coffee has long been somewhat of a secret known primarily to residents of Yunnan and travelers that come passing through the province. It seems that in the next few years the secret may get out to the rest of the world. Starbucks Corp has indicated that it has plans to add Yunnan coffee to its roster of coffees in China and perhaps in other countries as well.

In a Reuters interview on Tuesday, Starbucks China President Wang Jinlong said that Starbucks representatives had been meeting with coffee farmers in southern Yunnan to assist them in meeting Starbucks sourcing standards. The Seattle-based company has also sent shipments of Yunnan beans to the US for testing, Wang said.

Some analysts speculate that Starbucks - the world's largest chain of coffee shops - is interested in sourcing Yunnan coffee to avoid steep coffee import tariffs in China, However, the company's Shanghai office told Reuters that sourcing coffee from Yunnan would be done to add new flavors to its outlets' menus, suggesting that it could be marketed as a product of Yunnan in China and abroad.

Starbucks' Wang said that the company's sales in China were growing faster than 25 percent annually - significantly higher than its global sales growth objective of 18 percent. Starbucks currently has 246 outlets in mainland China, but the figure should be in the thousands "in the near future", he added.