China’s Ministry of Public Security Releases Status of Intellectual Property Criminal Investigations and Lists Typical Cases of Public Security Agencies Cracking Down on Crimes of Intellectual Property Infringement

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On April 23, 2021, China’s Ministry of Public Security held a press conference on the status of enforcing criminal intellectual property (IP) infringement laws.  At the press conference, the Ministry said that during the “Thirteenth Five-Year Plan,” which just ended, public security agencies across China have investigated more than 90,000 criminal cases of infringement of intellectual property rights and production and sale of counterfeit goods with a value of more than 47 billion RMB, and arrested more than 130,000 criminal suspects. 

The number of investigations has significantly increased over time.  During the “Kunlun 2020” special operation, the public security organs investigated more than 21,000 criminal cases of infringement and counterfeiting, a year-on-year increase of 35%. In the first quarter of this year, more than 3,800 cases were solved, and more than 8,200 suspects were arrested. The number of cases solved increased by 80% compared with the same period when the epidemic broke out last year.

At the press conference, the Ministry also released a list of 10 typical cases of criminal IP infringement covering trademark, copyright and trade secret, which follows.

1. Zhejiang Jinhua Public Security Bureau Investigated the Case of “February 19” Stealing and Recording Movies on the Spring Festival Video

In February 2021, the public security organ of Jinhua City, Zhejiang Province, based on clues received by the Food and Drug Investigation Bureau of the Ministry of Public Security, and with the strong support of copyright and film management departments, successfully investigated the “February 19” pirated recording and spreading the Spring Festival video. In the online movie case, 19 criminal suspects were arrested, pirated versions of “Hello, Li Huanying”, “Chinatown Detective 3” and many other movies released during the Spring Festival were seized, the main source of pirated cinema recording was eliminated, and 17 pieces of criminal equipment were confiscated.  According to investigations, since December 2020, the suspect Zhou and Mao have repeatedly stolen movies from theaters. After video editing, they have made “high-definition” pirated movies for profit-making in the small “movie bars” they run as well as online.

2. The public security organs in Kaifeng, Henan, uncovered the “August 13” case of manufacturing and selling counterfeit brand electrical products

In August 2020, the public security organ of Kaifeng City, Henan Province, based on the clues reported by the right holder, successfully solved the “8.13” case of producing and selling counterfeit electrical products, eliminated 16 criminal dens for manufacturing and selling counterfeit brand electrical products, and arrested 12 suspects. More than 10 types of electrical products such as counterfeit brand dual power switches and more than 1,200 units were seized on the spot. After testing, the quality of the products involved in the case was poor.  The investigation found that the criminal suspects Zhang and Deng purchased online unlicensed and low-quality dual power switches from the Wu.. After labeling with counterfeit trademarks, they were sold as genuine products to 10 provinces and cities, with a cumulative sales amount of more than 10 million RMB. The Kaifeng public security agency has recovered all the items involved in the case, and in accordance with the coordination mechanism with the administrative department, promptly notified the local market supervision bureau of the case. The market supervision department has urged relevant units to replace the fake and shoddy products involved in the installation and to eliminate hidden safety dangers.

3. Daxinganling Public Security Bureau, Heilongjiang, uncovered the “May 29” case of producing and selling fake pesticides

In December 2020, the Daxinganling public security organs, based on clues reported by the public, cracked a case of producing and selling fake pesticides, eliminated 3 criminal gangs, destroyed 11 production and storage dens, and arrested 15 criminal suspects. The investigation found that since 2020, the criminal suspects Yin and Zhao have formed a criminal gang with their relatives as the backbone. Without obtaining the relevant qualifications for pesticide production, they illegally organized the production of fake pesticides mainly based on herbicides. They used a  variety of other’s trademarks. The amount involved exceeds 100 million RMB.

4. The Public Security Bureau of Taiyuan, Shanxi Investigated the “August 1” Counterfeit Registered Trademark Case

In August 2020, the Food, Medicine and Environmental Crime Investigation Brigade, Jiancaoping Branch of the Public Security Bureau of Taiyuan City, Shanxi Province, based on clues reported by the public, successfully detected a case of producing and selling counterfeit brand vinegar, arrested 16 suspects, and seized 1,000 counterfeit containers of vinegar on the spot. There are more than 5,000 boxes, more than 5,000 packaging materials, more than 240,000 trademarks, and a large number of glass bottles for filling. After investigation, since the end of 2018, the suspect, Cheng , etc., without the permission of the right holder, imitated a vinegar brand trademark logo, purchased packaging materials and processing equipment, and used cheap vinegar to fill and produce counterfeit products of the brand.  Through online platform sales, the amount involved is more than 2.5 million RMB.

5. Liaoning Chaoyang Public Security Bureau Investigated the “January 2” Case of Manufacturing and Selling Counterfeit Brand Sports Shoes

In August 2020, the public security organs of Chaoyang City, Liaoning Province, investigated the “1·02” case of selling counterfeit brand sports shoes, arrested 10 main criminal suspects, and seized more than 240,000 counterfeit products of 11 brands on the spot, which were seized and used for manufacturing. There are 3 fake production lines, 83 machines, and more than 50 tons of raw materials. The amount involved is more than 100 million yuan. According to investigations, since 2018, the criminal suspect Zheng has sold counterfeit brand sports shoes through self-operated physical stores, with an operating amount of more than 4 million yuan. As Zheng’s supplier, the suspect Luo purchased counterfeit goods from the manufacturer Xu and others, and used the online platform to solicit more than 60 offline distributors to sell the counterfeit goods to various places.

6. Shanghai Yangpu Public Security Bureau Investigated the “January 21” Case of Manufacturing and Selling Counterfeit Medicines

In April 2020, the Food, Drug and Environmental Investigation Team of the Shanghai Public Security Bureau, together with the Yangpu District Public Security Bureau, investigated the “1·21” case of manufacturing and selling counterfeit drugs, destroyed 3 production and storage dens, captured 21 suspects, and seized counterfeit brands on the spot including more than 45,000 bottles of growth hormone drugs worth more than 56 million RMB. After investigation, since May 2019, the suspect Zhang and others have processed and produced a large number of semi-finished growth hormone drugs in a biotechnology company operated by him without permission, and sold them to the suspect Qin and others. Qin XX and others illegally ordered packaging materials and trademark logos consistent with hormone products produced by a certain brand, and sold them through the Internet platform after self-labeling and packaging.

7. The public security organ of Nantong, Jiangsu investigated the “January 13” case of manufacturing and selling counterfeit brand fresh-keeping film

In September 2020, the public security organ of Nantong City, Jiangsu Province, based on the reported clues, successfully solved the “1·13” case of manufacturing and selling counterfeit brand fresh-keeping film, sealed up 2 illegal manufacturing companies, arrested 60 suspects, and detained counterfeit brand fresh-keeping film. The finished products include 1,353 boxes, 12,000 pieces of loose film, and 19,000 rolls of paper tubes, with a value of more than 20 million RMB involved. The investigation determined that since 2017, the criminal suspects Li, Gu and others have used their own plastic wrap production line to illegally manufacture, without the permission of the registered trademark owner, under the condition of poor performance in the production and sales of their own plastic wrap and then store, transport, and sell plastic wrap products with infringing brand registered trademark logos.

8. The public security organs in Fuzhou, Fujian Province uncovered the “September 26” infringement case

In August 2020, the public security organs of Fuzhou City, Fujian Province cracked the “September 26” infringement of commercial secrets case and arrested 10 suspects, involving more than 12 million RMB. After investigation, the criminal suspects Qiu and Yu violated the confidentiality agreement and company management system regulations during their tenure in a technology company, used their positions to illegally steal the company’s technical secret information, and contacted the criminal suspect Chen and others after leaving their posts. Companies were registered and established successively, using illegally obtained technical information to produce related firmware, which was sold to the criminal suspect Lin and others. Lin and others used the firmware produced by Qiu and Yu to sell related equipment and products, causing serious economic losses to the right holder enterprise.

9. The Shandong Yantai Public Security Bureau Detected the “May 8” Case of Manufacturing and Selling Counterfeit Brand Mobile Phones

In June 2020, the public security organ of Yantai City, Shandong Province, based on clues reported by the masses, successfully solved the “5·08” sale of counterfeit brand mobile phones, arrested 28 criminal suspects, and destroyed 12 production, sales, and storage dens. The amount involved was more than 100 million RMB. After investigation, since 2017, criminal suspects Liu, Jiang and others have purchased second-hand mobile phones from various places, obtained refurbished mobile phones through self-refurbishment, commissioned industrial and commercial refurbishment, or directly purchased refurbished mobile phones, and forged authenticity identification reports. The refurbished mobile phone were ten represented as original genuine mobile phones, and profit will be made through the sale of its franchise stores registered on the online platform.

10. The Public Security Bureau of Shiyan, Hubei Detected the “July 22” Case of Manufacturing and Selling Counterfeit Engine Parts

In August 2020, the public security organs of Shiyan City, Hubei Province, based on the clues reported by the right holders, successfully solved the “7.22” case of manufacturing and selling counterfeit brand engine parts. A total of 48 criminal suspects were arrested, 9 dens were destroyed, and 40,000 counterfeit brand engine parts were seized.  According to the investigation, since 2014, Sun and Li and others have purchased counterfeit brand engine parts from Zhang, Fan and others, and customized the outer packaging of counterfeit brand engine parts from Yu, and processed them into finished products to sell at stores.

 

 

Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.

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Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.