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Featuring three essential Q&As on the evidentiary attributes of the verification opinion, and the recognition of "refurbished goods" and "false brushing orders".
Counterfeiting registered trademarks remains one of the most heinous forms of trademark infringement, often resulting not just in administrative penalties but also in criminal liability. This chapter focuses on the legal framework surrounding criminal liability for trademark counterfeiting, exploring topics such as types of conduct, key thresholds, criteria for "identical goods" and "identical trademarks", and the evidentiary attributes of the verification opinion. It also highlights practical issues like the legal treatment of "refurbished goods" and "false brushing orders." The aim is to provide practical guidance for rights holders.
Accordingly, we have selected three essential Q&As from Chapter 9: Practical Considerations Regarding the Crime of Counterfeiting Registered Trademarks of the Practical Q&A Guide to Cutting-Edge Intellectual Property Issues, co-authored by Wolters Kluwer, Lusheng Law Firm, and its strategic partner Rouse, to share.
Selected Practical Q&As
【Evidentiary Attributes of Verification Opinion】What are the evidentiary attributes of the verification opinion issued by the trademark owner?
The verification opinion regarding the authenticity of goods, issued by the trademark owner, serves as key evidence in criminal cases of trademark infringement. Although it is referred to as "expert opinion", it is typically regarded as a "victim's statement" under the statutory category of evidence. The verification opinion is considered presumptively valid unless sufficient evidence to the contrary is presented.
In the Criminal Trial Reference published by the Supreme People's Court, No. 860 introduces the case of Gu Juan and Zhang Lifeng Involving the Crime of Selling Goods with Counterfeit Registered Trademarks. It states that the trademark owner holds the position of a victim in criminal trademark infringement cases, and their identification of counterfeit goods or trademarks should be regarded as a "victim's statement" rather than an "expert opinion". Therefore, no appraisal qualifications are required. Furthermore, when determining the authenticity of the goods involved, a verification opinion issued by the trademark owner is presumptively valid unless disproven by contrary evidence. The content of such an opinion should be assessed comprehensively alongside other evidence, considering its consistency with the case as a whole. It is also essential to review any rebuttal evidence provided by the defence.
【Nature of the Act of Refurbishment of Second-hand Goods】Does "refurbishment of second-hand goods" constitute the Crime of Counterfeiting Registered Trademarks?
According to relevant provisions and judicial practice, determining whether an act of refurbishment constitutes the Crime of Counterfeiting Registered Trademarks mostly depends on whether the infringer's "use of the registered trademark" impairs the registered trademark's function of indicating the source of the goods.
Generally, some simple cleaning of old products – such as dusting or polishing them – will not result in a Crime of Counterfeiting Registered Trademarks, provided if it does not impair the involved trademark's indication function or cause consumer confusion. Conversely, if a "substantial transformation" is made to the products through refurbishment activities – such as dismantling, reassembling, replacing key components, or modifying the product's performance parameters – resulting in brand-new products completely different from those from the rights holder, it will very likely constitute a trademark infringement that could be subject to criminal prosecution.
【Review of the Defence of Brushing Orders】How should the defence of "brushing orders" be approached?
"False brushing orders" refers to the practice of artificially inflating product sales, reviews and other data through fictitious transactions to deceive consumers and e-commerce platforms. It is commonly seen on online platforms and can directly impact the prosecution and sentencing of trademark related crimes.
Firstly, when calculating the defendant's total sales
amount, any sales data generated by false orders should be
deducted, as it does not reflect actual sales. Secondly, the
defendant bears the burden of proof when raising the defence of
false brushing orders. This defence cannot be raised verbally but
must be supported by firm evidence, such as chat records and
transaction receipts. Finally, judicial authorities must conduct a
thorough and objective review of the evidence, carefully
identifying and excluding any amounts related to fraudulent
transactions.
In the 16th batch of Guiding Cases released by the Supreme
People's Court in 2017, the No. 87 Case, involving
Guo Mingsheng and Guo Mingfeng concerned the Crime of
Counterfeiting Registered Trademarks. The decision affirmed key
points regarding the determination of the illegal business amount
and illegal gains in such cases. It stated that these should be
established based on a broad range of evidence, including the
defendant's confession, witness testimony, victim statements,
data from online platforms, the defendants bank account records,
delivery notes, computer records from delivery companies, and
account books kept by the defendants. If the defendant claims that
false transactions are present in the online sales records but
fails to provide supporting evidence, the defence will not
stand.
Other Notable Q&As from This Chapter
- 【Types of Trademark Crimes】What types of registered trademark infringement are subject to criminal liability?
- 【Definition of the Crime Amount in Trademark Related Crimes】What are the definitions of and differences between "illegal business amount", "sales amount" and "value of goods" with respect to the Crime of Counterfeiting Registered Trademarks?
- 【Determination of 'Identical Goods'】How should the nature of 'identical goods' be determined with respect to the Crime of Counterfeiting Registered Trademarks?
- 【Determination of 'Identical Trademark'】How should an 'identical trademark' be determined with respect to the Crime of Counterfeiting Registered Trademarks?
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In collaboration with our strategic partner Lusheng in China and Wolters Kluwer, Rouse has developed a valuable resource for rightsholders: "The Practical Q&A Guide to Cutting-Edge Intellectual Property Issues in China". This guide, compiled by over 30 senior China IP experts from the two leading IP firms, addresses the key concerns of businesses by providing insights on patents, trade marks, copyright, trade secrets, internet unfair competition, intellectual property investment, and punitive damages in an accessible Q&A format. It offers readers the latest legal interpretations, case studies, and practical guidance applicable to their operations.
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