3.5-Year Prison Sentence for Counterfeiting Maotai, the National Drink of China

On April 8, 2024 the Shanghai Hongkou District People’s Court announced the sentencing of three defendants for the crime of of selling goods with counterfeit registered trademarks, specifically, Maotai, a brand of baijiu, the national liquor of China.  As of January 2022, the police had seized more than 200 bottles of the counterfeit Maotai with a total value of over 500,000 RMB at two stores.

Per the Court, defendants Da Liu and Xiao Liu originally did business together and jointly opened a tobacco and alcohol store. During the operation, the two discovered a “business opportunity to make a fortune” and came up with the idea of ​​blending and selling fake Maotai liquor .

Starting from December 2021, Da Liu and Xiao Liu instigated others to put low-priced Maotai-flavored liquor into Moutai bottles and sent them to the store for sale with Liu XX’s assistance. There was a big difference between the counterfeiting cost and the sales price and therefore the three people made significant profits. Accordingly, they expanded sales to a second store.

The Hongkou District People’s Court held that the defendant Da Liu used the same trademark as the registered trademark on the same product without the permission of the registered trademark owner and the circumstances were particularly serious. The defendant Xiao Liu used the same trademark as the registered trademark on the same product without the permission of the registered trademark owner and the circumstances were particularly serious. The actions of Da Liu and Xiao Liu have constituted the crime of counterfeiting registered trademarks. Defendant Liu XX knowingly sold goods with counterfeit registered trademarks and had other particularly serious circumstances, his behavior constituted the crime of selling goods with counterfeit registered trademarks. This case was a joint crime. Da Liu and Xiao Liu instigated others to counterfeit and sell fake Maotai liquor. They played a major role in the case and were the principal offenders; Liu XX assisted in the sales and was an accessory. All three pleaded guilty.

Taking into account the defendants’ principal and accessory status, guilty plea and prepayment of fines, the Hongkou District People’s Court sentenced Da Liu to three years and six months in prison and a fine for the crime of counterfeiting a registered trademark; sentenced Xiao Liu to the crime of counterfeiting a registered trademark to two years in prison and fined; Liu XX was sentenced to one year in prison and fined for selling goods with counterfeit registered trademarks.

Hongkou District People’s Court criminal court judge Wu Peng commented,

In this case, the defendants Da Liu and Xiao Liu not only produced counterfeit liquor with a well-known registered trademark, but also placed it in multiple stores for sale. During the entire crime process, the equipment and facilities were complete, the staff were well-equipped, the division of labor was clear,  the counterfeiting methods were sophisticated and a criminal industrial chain has been initially formed .

Under Article 13 of the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues concerning the Specific Application of Law in the Handling of Criminal Cases of Infringement upon Intellectual Property Rights, whoever commits the crime of counterfeiting registered trademarks and sells the commodities with such counterfeited registered trademarks, which constitutes a crime, shall be convicted of and punished for the crime of counterfeiting registered trademarks. Both Da Liu and Xiao Liu engaged in counterfeiting as well as selling counterfeiting, so they should be convicted and punished for the crime of counterfeiting registered trademarks. Defendant Liu XX was instigated to sell counterfeit liquor, and the defendant should be punished for the crime of selling commodities with counterfeit registered trademarks.

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The harm of counterfeiting and selling not only seriously infringes upon the rights and interests of registered trademark owners, but also harms the rights and interests of consumers. Counterfeiting registered trademarks will directly mislead consumers into choosing products with counterfeit registered trademarks thereby harming the interests of consumers. In particular, food, medicines, liquor (baijiu in this case) and maternal and infant products may cause irreparable damage to consumers’ health.

The full text of the announcement from the Shanghai Hongkou District People’s Court may be found here (Chinese only).

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