Cases highlight strengthening of criminal enforcement

The State Administration for Industry and Commerce (SAIC) has issued an announcement outlining 10 representative criminal cases on trademark infringement from the first half of 2006, which, it believes, demonstrate the strengthening of criminal enforcement. The details of the cases are as follows:

• Production of wine bearing forged trademarks 五粮液 (Wu Liang Ye in Chinese), 剑南春 (Jian Nan Chun in Chinese) and 水井坊 (Shui Jing Fang in Chinese) in Tangshan City, Hebei Province. Two hundred and eighty-eight bottles of infringing wine and a large quantity of forged labels, packaging materials and tools valued at Rmb40,000 were seized. The three suspects were sentenced to between one and two years' imprisonment, and fined Rmb28,000 respectively for forging registered trademarks.
  
  
• Sale of briefcases, handbags, wallets, eyeglasses, belts, scarves and accessories bearing forged trademarks LOUIS VUITTON, HERMES, PRADA and CHANEL in Dongcheng District, Beijing. Nine hundred and thirty-six infringing pieces valued at over Rmb2 million were seized. Investigation by the Public Security Bureau has been completed and the suspects will be prosecuted.
  
  
• Production and sale of sport shoes bearing forged trademark NIKE in Shenzhen City, Guangdong Province. A total of 32,988 infringing pairs of sport shoes valued at over Rmb13 million were seized. The case has been transferred to the Public Security Bureau for further handling.
  
  
• Production of circuit breakers bearing forged trademark 正泰 (Zheng Tai in Chinese) in Xiaopu County, Fujian Province. Infringing circuit breakers numbering 12,320 and valued at about Rmb140,000, 5,000 sets of forged labels and nine machines for producing the same were seized. The case has been transferred to the Public Security Bureau for further handling.
  
  
• Production of sunglasses bearing forged trademarks CD, RAYBAN, CHANEL and LACOSTE in Wenzhou City, Zhejiang Province. Over 10,000 pairs of infringing sunglasses valued at over Rmb80,000 and 20,000 infringing packaging bags were seized. The case has been transferred to the Public Security Bureau for further handling.
  
  
• Sale of dry cleaning detergent bearing forged trademark 大洁王 (Da Jie Wang in Chinese) in Shanghai. One thousand four hundred and seventy-six barrels of dry cleaning detergent valued at over Rmb140,000 were seized. The case has been transferred to the Public Security Bureau for further handling.
  
  
• Sale of motor parts bearing forged trademarks BENZ, BMW, BOSCH, SACHS, VALEO and HELLA in Guangzhou City. A large quantity of infringing motor parts valued at over Rmb4 million were seized. The case has been transferred to the Public Security Bureau immediately for further handling.
  
  
• Sale of wallets, handbags, scarves, watches and accessories bearing forged trademarks HERMES, GUCCI, CHANEL, VERSACE and CD in Beijing. A large quantity of infringing goods valued at over Rmb10 million were seized. The case has been transferred to the Public Security Bureau immediately for further handling.
  
  
• Forging of labels bearing the trademarks LANCOME, NEUTROGENA and BOURJOIS in Yiwu City, Zhejiang Province. Infringing labels totalling 120,000 were found and seized. The case has been transferred to the Public Security Bureau for further handling.
  
  
• Production and sale of fertilizers bearing forged trademark 嘉吉 (Jia Ji in Chinese) in Jilin Province. The goods were valued at above Rmb1 million and the case has been transferred to the Public Security Bureau for further handling.

Under Chinese criminal law, trademark infringement offences include using a forged registered trademark on identical goods, knowingly selling goods bearing a forged registered trademark and forging/selling forged trademark labels. Not all acts of forging registered trademarks constitute a criminal offence; it is only when the circumstances of infringement are "serious" or "very serious" that the act will bear criminal liability of imprisonment and/or fines.

According to the Explanations on the Application of the Law Relating to Handling of Criminal IP Cases of the Supreme People's Court and Procuratorate, when the infringer is an individual, "serious" circumstances generally refer to situations where:

• the illegal business turnover is Rmb50,000 or above;
  
  
• there are illegal profits of Rmb30,000 or above; or
  
  
• two or more registered trademarks are forged with illegal business turnover is equal to Rmb30,000 or above or there are illegal profits of Rmb20,000 or above.

"Very serious" circumstances denotes cases where:

• the illegal business turnover is Rmb250,000 or above;
  
  
• the illegal profits amount to Rmb150,000 or above; or
  
  
• two or more registered trademarks are forged and the illegal business turnover amounts to Rmb150,000 or above, or there are illegal profits of Rmb100,000 or above.

Since the implementation of the Provisional Regulations Relating to Strengthening Cooperation in Combating offences on Trademark Infringement issued by the Ministry of Public Security and the SAIC in January 2006 which regulate the exchange of information and transfer of cases between the Administration for Industry and Commerce and the Public Security Bureau, the mutual notification mechanism stipulated therein has proved to be increasingly important and effective in enforcing the criminal provisions on trademark infringement. This has resulted in a gradual increase in the number of public prosecutions brought against infringers. In the first six months of 2006, the Administration for Industry and Commerce at different levels has transferred 60 cases involving trademark infringement and 61 suspects to the authority of the Public Security Bureau. It is believed that more stringent criminal enforcement by the Public Security Bureau can serve as a strong deterrent to large-scale trademark infringement in China.

Yvonne Chua and Grace Wong, Wilkinson & Grist, Hong Kong