Recently, a Shanghai court ruled that repackaging Ferrero Rocher labels without authorization from the company did constitute a criminal trademark infringement, showing that China is serious about intellectual property protection.

In this case, the defendant, Mr Liu, purchased substantial quantities of Ferrero Rocher chocolates at the lower price reserved for large boxes. He would then repackage the chocolates into smaller boxes, using labels that he had printed himself mimicking the Ferrero Rocher brand.

Even though the chocolates were authentic, the company had not given Mr Liu permission to print labels using their brand. 

The markup Mr Liu was able to make through the repackaging, was substantial, and when police raided his Warehouse they seized no less than 490,000 items with the counterfeit Ferrero Rocher labels.

For as long as I can remember on my trips to China, copying was part of the culture, and there was never any sense of wrongdoing when imitating a Western brand. Blatant copies and passing off of high street brands were ubiquitous, And even the government, at one point, used to use illegal copies of Microsoft software.

Now the government appears to be trying to improve its international reputation as a protector of Western companies’ trademarks and intellectual property.

When police investigated the matter further they found Mr Liu’s company had forged around 5.65 million labels for which he paid 1.7m RMB ($262,000)

In sentencing Mr Liu, the judge said:

the defendant did not have licenses for food packaging, and could not guarantee that the hygienic environmental conditions of the packaging process and the health of the packaging personnel. There was a food safety risk, which brought safety hazards to the health of consumers. Therefore, the defendant’s behaviour is of great social harm and meets the constitutive requirements of the crime of illegally manufacturing products bearing registered trademarks, and should be convicted and punished in accordance with the law.

Mr Liu pleaded guilty to the charges, as is usually the case in China (the Chinese authorities do not like to bring cases to court that are not guaranteed to win). He was given a suspended sentence however which is quite light considering the scale of the Crime. He was also fined 300,000 RMB ($46,000), and he was required to compensate Ferrero Rocher for damages.

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