[Case Review]

In 2020, when having dinner with a friend, Chen got to drink a fake Moutai liquor. Despite its difference from the authentic Moutai liquor, Chen found the fake liquor quite good. An alcohol lover who liked using it to make friends, Chen then asked the friend where he could buy the fake liquor. So he reached Hou, and bought several bottles from him. Each bottle cost RMB 680 yuan. The name of the liquor reads “Kweichow Moutai Liquor”, along with the wording “Alcohol content: 53% vol, 2.5L per bottle”. On the outer package, it reads “Kweichow Moutai Liquor Co., Ltd.”.

Chen drank part of the alcohol himself and used the rest to entertain his friends. His friends thought the liquor was good, and Chen told them that he had bought it from Moutai Company. Then he bought it again from Hou and sold it to his friends at a price ranging from RMB 800 yuan to 1200 yuan per bottle. In the next three or four months, as more people came to buy the alcohol from Chen, he even talked Hou into reducing the price of each bottle to 320 yuan.

Chen’s selling fake Moutai Liquor attracted the attention of the public security organ. At about 12:00 on June 30, 2021, the public security organ got clues and caught Chen at his temporary residence, and seized 127 bottles of the fake liquor on the spot.

The procuratorial organ filed a public prosecution with the Shanghai Songjiang District People’s Court (the “Shanghai Songjiang Court”) against Chen, who was suspected of selling commodities with a counterfeit registered trademark.

The Shanghai Songjiang Court found through trial that between May 2020 and June 2021, the defendant, Chen, bought bottled liquor from the seller, Hou (who had been sentenced), at a price far lower than the market price. Knowing that the liquor was fake, he still sold it to ten people, including Zhang and Liu, with the sales reaching over RMB 160,000 yuan in total. The 127 bottles of fake Moutai Liquor seized by the public security organ at Chen’s residence were worth more than RMB 100,000 yuan. After identification, the liquor mentioned above were all counterfeit products with the registered trademark of “Kweichow Moutai”. According to the price certificate issued by Kweichow Moutai Co., Ltd., the Moutai Liquor (5L) packaged as the fake one was sold at RMB 20,999 yuan per bottle in the company’s sales contract for 2021.

[Case Study]

The Shanghai Songjiang Court held that the defendant, Chen, had knowingly sold goods with a counterfeit registered trademark, plus other serious circumstances, so his behavior constituted the crime of selling goods with counterfeit registered trademarks. As he truthfully confessed his crime after being summoned, he might be given a lighter punishment according to law; as he voluntarily pleaded guilty and was ready to take punishment, withdrew from the illegal income, and paid the fine in advance, he might be given a lenient punishment. He had also sold to a limited amount of people, who were basically his friends. Given the facts, nature, circumstances, social harmfulness of the crime and the defendant’s attitude in confession and repentance, the Shanghai Songjiang Court finally adopted the sentencing suggestion of the procuratorial organ and sentenced the defendant to one year and six months of fixed-term imprisonment, two years of probation, and a fine of RMB 90,000 yuan for selling products with a counterfeit registered trademark.

The output of Moutai liquor is limited. Some people would buy fake liquor at a lower price and sell it at a higher one. Such behavior has, on the one hand, destroyed the order of the market economy and violated the legitimate rights and interests of the trademark owner, and on the other hand, posed safety risks: fake liquor is mostly produced by small workshops without effective supervision over the product quality and safety, hence the food safety problems.

[Relevant Laws]

I. Criminal Law of the People’s Republic of China
　  Article 214 Whoever knowingly sells goods with counterfeit registered trademarks, if the amount of illegal gains is relatively large, or if there are other serious circumstances, shall be sentenced to fixed-term imprisonment of not more than three years and shall also, or shall only, be fined; if the amount of illegal gains is huge or if there are other especially serious circumstances, he/she shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years and shall also be fined.

Article 67 ...

A suspect who does not surrender as prescribed in the preceding two paragraphs but truthfully confesses his/her crime may be given a lighter punishment; if especially serious consequences are avoided due to the suspect’s truthfully confession, he/she may be given a mitigated punishment.

Article 72 A suspension of sentence may be granted to a criminal who is sentenced to criminal detention or fixed-term imprisonment of not more than three years if the following conditions are met, and a suspension of sentence shall be granted to those under the age of 18, pregnant women, and those who have reached the age of 75:

(1) The circumstances of the crime are relatively minor;

(2) The criminal shows repentance;

(3) There is no danger of the criminal committing another crime;

(4) The announcement of probation has no significant adverse impact on the community where the criminal lives.

…

If a criminal whose sentence is suspended is sentenced to a supplementary punishment, the supplementary punishment shall still be executed.

II. Criminal Procedure Law of the People’s Republic of China

Article 15 If a criminal suspect or a defendant voluntarily and truthfully confesses his/her crime, admits the alleged criminal facts, and is willing to accept punishment, he/she may be treated with leniency according to law.

(By: Liu Lei and Yang Cheng, Shanghai Songjiang People’s Court)