First Instance

The trial court found that Company J, without the authorisation of the UK proprietor, applied an identical mark to goods of the same class in order to obtain unlawful profit, in circumstances characterised as especially serious. A, as the person directly responsible, was treated as a principal offender. Company J was fined RMB 550,000; A was sentenced to three years and nine months’ imprisonment and fined RMB 180,000.

Appeal

A appealed to the Shanghai Higher People’s Court and instructed Shanghai Lixiaohua Law Firm for the appeal.

Grounds

The appeal challenged (1) the reliability of the authenticity appraisal on which the first-instance finding rested — the sampling method, the qualifications of the appraiser and the absence of a proper chain of custody; (2) the quantification of the infringing goods and therefore of the “serious circumstances” threshold; and (3) A’s role, arguing that operational decisions were taken collectively and that his personal culpability had been overstated.

Outcome

The appellate court accepted that the appraisal evidence was insufficient to support the original quantification and that mitigating factors had not been given adequate weight. The sentence and fine were reduced accordingly.

Practical Note

Trademark prosecutions in China turn on the appraisal and on the count of infringing items. Testing both — procedurally and arithmetically — is usually the most effective route to a reduced sentence.