On 20 July 2023, the People's Court of Zhenjiang Economic Development Zone sentenced 15 people to fines, probation and imprisonment up to 6.5 years for manufacturing and selling counterfeit "Rolex" and other registered trademark protected products. The amount involved in the case exceeded 300 million RMB.
Six years of counterfeiting
For six years, (July 2015 to early April 2021), the defendants conspired to manufacture and sell counterfeit registered trademark brand watches, and successively invested and partnered in the production, assembly and sales of counterfeit "ROLEX" (Rolex) and other brand watches in Guangzhou.
They even made their own assembly factory for assembly, packaging, etc. Then they sold the sold the finished counterfeit watches, and carried out such acts as collection of payment for goods and distribution of profits.
The People's Court of Zhenjiang Economic Development Zone held that the defendants used the same trademark as the registered trademark on the same product without the permission of the trademark owner, and their behaviour constituted the crime of counterfeiting a registered trademark.
Knowingly infringing
The judge mentioned that the defendants knew that making and selling counterfeit goods was an illegal and criminal act, but they still took chances and took risks, producing and selling counterfeit "ROLEX" (Rolex) and other brand watches.
The 15 defendants seriously infringed on the reputation of the trademark and the legitimate interests of the right holders, and disrupted the order of the market economy.
As such, by this judgement that includes fines, probation and imprisonment, the court encourages innovation and creation, and tries to severely crack down on such crimes of infringement of intellectual property rights.
How to use criminal prosecution?
This Rolex case is a typical criminal IP case in China.
In China, criminal prosecution can be started in severe cases of IP infringement. The People's Procuratorate can work together with rightsholders in order to finalize a case, and eventually bring it before the criminal court.
As such, imprisonment and fines can be obtained from the infringers. These kinds of criminal cases can then further be used, evidence wise, for the compensation of the rightsholder in a civil case.
It would be interesting to see how much compensation ROLEX would get in such a civil case, or whether the criminal case would be used, or already is used, in order to obtain compensation through a settlement agreement. Let's hope that information will be public!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
