By King & Wood Intellectual Property Group

Liu Zhaolong, a Chinese national, was found to have purchased raw wine, bottles, bottle caps, labels, bottle capping equipment and other illegal materials and tools, and manufactured counterfeit wines imitating Chivas, Remy Martin, Ballantine’s, Jack Daniels, Martell, Hennessy, Royal Salute and other famous wine brands. Liu filled the counterfeit wines and distributed them to several cities in China, the illegal turnover of which has been over RMB 200,000 (around US$31,250). As a result, Beijing Daxing District Court found that Liu Zhaolong had violated the provisions of Article 213 of the Criminal Law of China and committed the crime of counterfeiting a registered trademark.

Pursuant to the judicial interpretations jointly issued by the Supreme People’s Court of China and the Supreme People’s Procuratorate of China in December 2004, a person who uses a mark identical to a registered trademark on the same type of goods without permission, and either has an operational value that exceeds the statutory threshold or if there are other serious circumstances justifying criminal sanction, has committed the crime of counterfeiting a registered trademark. The crime carries a sentence of not more than three years imprisonment, criminal detention, and/or fines. If more than two registered trademarks are counterfeited and the operational value reaches RMB150,000, or the illegal profits reach RMB100,000, especially serious circumstances are deemed to exist, and the applicable sentence is three to seven years in addition to fines.

In the present case, Liu Zhaolong counterfeited nearly 10 types of foreign wine brands, in an operation valued at more than RMB150,000. These acts not only constituted the crime of counterfeiting registered trademarks, but the court also determined that especially serious circumstances existed. Therefore, Liu was sentenced to 4 years imprisonment and fined RMB150,000 by the court. (Written by Hua Yang, Connie Zhuang and Yuexin Xiao)