Burberry counterfeiter sentenced to 5 years prison plus a 2 million RMB fine
Recently, a case of counterfeiting of a registered trademark handled by the Shanghai Jing'an District Procuratorate was awarded as one of the Top 10 Cases of Intellectual Property Protection in the year of 2023-2024 by the Working Committee on Quality Brand Protection of the China Association of Foreign Investments (CAFI).
On February 23, 2024, the Shanghai No. 3 Intermediate People’s Court upheld an earlier judgment sentencing Gong to 5 years in prison and a 2 million RMB fine (around US$ 280,000).
Here’s what happened.
In November 2022, Mr. Cao, a consumer, bought a Burberry windbreaker on the online store called "XX Overseas Purchase" at a price of 2,870 RMB, and the store claimed that the clothing was purchased genuinely from an overseas country. After receiving the goods, Mr. Cao found out that the windbreaker was rough and suspected that it was a fake, so he sent the windbreaker to Burberry for identification. The company confirmed that the “Burberry black label" windbreaker was counterfeit, and immediately reported the case to the public security organ.
After investigation, it was found that Mr. Gong XX counterfeited the windbreaker, shirt and other clothing of the Burberry brand, and sold them as genuine from overseas purchasing. On May 5, 2023, investigators arrested Gong XX at his residence, seized more than 50 pieces of counterfeit Burberry clothing on the spot, as well as a large number of tags, zippers, buttons, collar labels and other accessories with the word Burberry and equestrian knight graphics.
After checking, the above-mentioned seized items are identified as counterfeited goods that infringe the exclusive right to use the registered trademark Burberry.
On July 4, 2023, the case was sent to the Jing'an District Procuratorate for review and prosecution.
According to Gong XX confession, "XX overseas purchase" was jointly set up with his friends, and later, due to disagreements, the two parties separated, and the store also stopped operating.
However, Gong XX still had the customer resources from the previous purchasing agents, so he thought of counterfeiting well-known brand clothing and selling it to others for profit. The buttons and tags with the Burberry logo were purchased through the wholesale market. Later, he found Song XX, and asked him to make windbreakers and shirts of the same brand according to the style pictures and materials provided by him.
The cost of a garment ranged from 420 to 480 RMB but was sold for about 2,800 RMB.
The defender submitted a defense opinion, claiming that the counterfeit trademark of the criminal suspect was "Burberry Black Lable" (sic!), which was not the same as the word trademark Burberry registered by the right holder's company, and did not belong to the same trademark. At the same time, the word trademark "Burberry Black Label" has never been actually used in the domestic market, and it has ceased to be used overseas for far more than three years.
Two difficult problems are placed in front of the procuratorate:
1. Can the counterfeit trademark of the criminal suspect Gong XX and the trademark registered by the right holder be recognized as the same trademark?
2. If a registered trademark has not been actually used for more than three years (a reason to be exempt from liability for trademark infringement), does this affect the determination of the crime of counterfeiting registered trademarks?
The procuratorate obtained by the right holder company full evidence related to trademark registration, and established that "Burberry", "Burberry Black Label" and the equestrian knight pattern were all registered trademarks of the company, and the company enjoyed the exclusive right to use the trademark.
Although the word mark "Burberry Black Label" has ceased to be used in an overseas country, the equestrian knight pattern trademark, which was also licensed at that time, is still used in domestic apparel products.
Through on-the-spot verification of all the types, quantities and characteristics of the trademarks attached to the infringing goods, the procuratorate found that in addition to the word logo of "Burberry Black Lable", the pattern with equestrian knights was also used on the neckline, chest and tag on the counterfeit clothing of Gong XX.
After a comprehensive and detailed comparison with the clothing on the brand counter, it was confirmed that the "Burberry Black Lable" knight trademark used by Gong is basically the same as the "knight" pattern trademark of the right holder.
"Black Label" is the refinement of the model and series of the registered trademark Burberry by the right holder, and is not the core element of the trademark, and whether or not this word is added does not affect the distinctive features of the knight image, the word Burberry and the combination of the two trademarks in the registered trademark of the right holder.
In response to the defendant's argument that the trademark was not actually in use, a complete study and ruling as to whether the registered trademark was actually used during the period of validity may become a defense to an exemption from civil damages, but this does not affect the infringement ruling.
If the offender uses a trademark identical to the registered trademark on the same type of goods or services without the authorization of the trademark owner, and the circumstances are serious or particularly serious, the offence of infringement of a registered trademark is committed.
The final review determined that whether the criminal suspect Gong XX counterfeited the "Burberry Black Lable" word trademark or used the "Black Label Knight" trademark in combination, there was no basic visual difference between the graphic elements, arrangement, and combination with the trademark logo registered by the right holder Burberry, which was enough to mislead the public.
Considering that Gong’s sales amount reached more than 4 million RMB and the pending sales amount reached more than 100,000 RMB, the situation was quite serious.
On August 16, 2023, the Jing'an District Procuratorate prosecuted the defendant Gong XX for the crime of counterfeiting registered trademarks. After trial, the Jing'an District Court accepted the above charges and made a first-instance judgment on November 16, 2023, sentencing Gong to five years in prison and a fine of 2 million RMB.
Gong XX was dissatisfied with the verdict and appealed.
On February 23, 2024, the Shanghai No. 3 Intermediate People's Court rejected the appeal and upheld the original judgment.
Official release of the case here (in Chinese).