Fang * et al. counterfeiting the registered trademark of Dyson

Lower Court Docket No.: 4533, first instance (初), criminal case (刑), (2019) 0115, the Pudong Court of Shanghai (沪)

Prefatory Syllabus

In this case, the counterfeited goods are common household hair dryers in people's daily life, and if they cause personal injuries or property damages to the end-use consumers due to their hidden quality hazards, the social harm would be great, so it reflects the great subjective criminal malice of the defendants, and their punishments should not be reduced or probated.

Basic Facts

Public prosecution organ：PUDONG NEW AREA PEOPLE’S PROCURATORATE OF SHANGHAI

Defendants：FANG *, XIE *, YANG *, HUANG *

"Dyson" is a trademark registered with the Trademark Office of the State Administration for Industry and Commerce of the People's Republic of China. In April 2018, the defendants Fang * and Xie * set up Shenzhen Longgang District Dimeisiao Electronics Trading Company ("Dimeisiao Trading"), in which the actual controller was Fang * and the legal representative was Xie *, who was responsible for the general affairs of the company under the requirement from Fang *. The company set up factories in different places including Shenzhen and Huizhou, employed over 30 workers (handled in a separate case), procured raw materials and parts from others and organized the workers to produce counterfeit hair dryers of the registered "Dyson" trademark through assembly lines, with product models divided into European, American, Australian and British versions and corresponding different colors, etc., which were later sold by defendant Yang * to his downstream buyers through online channels at an average price of about RMB 700 per piece.  In May 2018, the defendant Huang * joined Dimeisiao Trading, responsible for the storage and management of counterfeit raw materials. According to auditing, the defendants Fang *, Xie *, Yang * and Huang * had participated in the production and sale of more than 19,000 pieces of hair dryers counterfeiting the registered trademark of "Dyson", with the sales value amounting to more than RMB 13.5 million. On December 14, 2018, the defendants Xie * and Huang * were caught by the public security authorities at their counterfeiting den, and 277 pieces of counterfeit hair dryers of the registered "Dyson" trademark and their accessories, packaging materials and other items worth over RMB 190,000 were seized on site. While the defendants Fang * and Yang * were arrested by the public security authorities at their residences respectively.

The Pudong Court held that the defendants Fang *, Xie *, Yang * and Huang * had used a trademark identical to the registered trademark on identical goods without the permission of the registered trademark owner, which was a particularly serious offense, and their acts had all constituted the crime of counterfeiting a registered trademark. Dimeisiao Trading, the organization involved in the case, had been planned and incorporated by the defendants Fang * and Xie *. The defendant Fang * was the actual controller of the company, fully responsible for the business of the company, while the defendant Xie * was the legal representative, responsible for the general affairs of the company with a salary obviously higher than the rest of the staff. The two people had played a major role in the joint crime, and shall be considered the key offenders according to the law. Taking into consideration the position of the defendant Xie * in this case, whose role had been less compared to the defendants Fang *, so his punishment was lighter by discretionary judgment with reference to the punishment of the defendant Fang *. The defendants Yang * and Huang * had played a minor role in the joint crime, so they were treated as accessories and received lighter punishments accordingly.

By the time of the case, the above four defendants had participated in the production and sale of more than 19,000 pieces of hairdryers counterfeiting the registered trademark of "Dyson", with the sales value amounting to more than RMB 13.5 million, all of which had constituted a particularly serious offense. Dyson-brand hairdryers have enjoyed a high awareness in the market, while hairdryers are commonly-used small household appliances in people's daily life. The acts of the four defendants had not only seriously infringed the rights of the trademark in dispute of the trademark owner and the rights and interests of consumers, but may also cause personal injuries or property damages to the end-use consumers due to the hidden quality hazards of the counterfeit hairdryers. Therefore, their acts have great social harm, and the subjective malice of each defendant is also great, so they should not be granted reduced punishment or probation.

Based on the above details of the case, the Pudong Court sentenced the key offenders Fang * and Xie * to six years' and five years' imprisonment plus a fine respectively for the crime of counterfeiting registered trademarks, and the accomplices Yang * and Huang * to three years and eight months' and three years and nine months' imprisonment and a fine respectively, confiscated their illegal proceeds, and seized the counterfeit hairdryers of the registered trademark and their accessories and packaging materials.

After the first instance ruling, the defendants of this case pleaded guilty to the sentences and none appealed.

Typical Significance

This case involved the "Dyson" trademark, a well-known international brand for electrical appliances, and the amount involved exceeded RMB 13.5 million. The Pudong Court sentenced a total of 35 defendants in this series of cases to solid imprisonment terms ranging from six years to one year and six months, with a total fine of RMB 10.08 million in accordance with the law.

This series of cases has attracted wide attention from all walks of life due to its strict and severe sentences for the key offenders. The CCTV Finance Channel, Shanghai Media Group and many other TV stations reported on the sentencing process, while the new release of the case on the WeChat official account of the Pudong Court had 34,000 hits, and was retweeted by dozens of media such as Wen Wei Po and Xinmin Evening News. The case has been called Dyson's "first case of counterfeiting in China". And it was selected as a typical case of the year published by the People's Daily for "protecting intellectual property rights and combating infringement and counterfeiting", which has highlighted the active role China's courts have played in protecting intellectual property rights in the new pattern of cooperation, co-construction and sharing.