Dec 2, 2020

Starbucks counterfeiters face highest ever punitive damages demand

China has previously been known as the land of knock-offs; it has garnered a worldwide reputation for its counterfeit goods and for having a very lax intellectual property (IP) protection regime. However, over the past few years we have seen China demonstrate serious resolve in its efforts to develop a stronger system of IP protection. More and more we are hearing of cases in which the State has cracked down on another counterfeiter.

In November, a consumer council in China filed a public interest lawsuit against a food company, Shuangshan Food (Xiamen) Co., Ltd, based in South China’s Fujian province, after it emerged that it had been selling counterfeit Starbucks products. Last week, the Wuxi Intermediate People’s Court accepted the case.

Shuangshan Food had been selling the counterfeit products by forging customs declaration documents. It had sold counterfeit products to 50 merchants in 18 provinces around China and pocketed 7 million yuan. The criminal trial for the matter, which concluded in December 2019, saw 5 people convicted and sentenced up to 5 years in prison. The public interest lawsuit is still to be heard but the consumer council is demanding punitive compensation of 21 million yuan, three times the amount made by the counterfeit scheme and the highest ever compensation demand.

The penalties for counterfeiting goods in China are becoming increasingly severe. This is no doubt somewhat linked to the growing pressure China faces from the US in the ongoing trade war.

If you have any questions in relation to infringement of IP or any other IP rights, please don’t hesitate to contact the team at McDaniels Law on 0191 281 4000, or by email at legal@mcdanielslaw.com.

Posted by: Hannah Flowers in: EU/International, Legal News

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