In August of last year, Xiao Zhenqiang (肖振强), a Chinese maker of fake French luxury Hermès handbags, was sentenced to life in prison for the Crime of Production and Sale of Fake and Substandard Commodities. Xiao established two factories in China’s southern province of Guangdong, from which around 4,000 fake Hermès bags were seized with a value of 100 million CNY (US$16 million).
A verdict was reached under Article 140 of the Criminal Law of the PRC, which stipulates that a life sentence can be handed to counterfeiters in certain cases. However, Xiao’s sentence was unprecedentedly harsh. Typically, counterfeiters receive a sentence for the Crime of Counterfeiting a Registered Trade Mark, if brought before a criminal tribunal, of no more than years unless guilty of manufacturing fake pharmaceuticals, or other potentially human health-impacting products.
Many have interpreted Xiao’s sentence as a sign that China intends to accord greater emphasis to the protection of IP rights, which has been borne out in the latest draft of China’s Trade Mark Law, released at the end of last year. In it, the definition of counterfeiting has been widened to include facilitating infringement, the maximum statutory compensation for infringement has been increased to 1 million CNY (US$160,000) and under certain circumstances, the burden of proof in an infringement case has been switched from the victim to the infringer.