What exactly is an anti-counterfeiting program? And how much does it take to make it a criminal case?

 In China, Law Blog

Most of the counterfeit products in the world today are originated from China.  Narrow in a bit — they are from South Eastern ports of China.  Big brands and international companies have implemented programs trying to STOP the counterfeits from being exported from China in the first place.  But exactly what is an anti-counterfeiting program? And does it really work?There are 3 typical responses when facing growing counterfeit concerns in China: 

Response #1 – C&D letter.  But make sure you are sending the letter IN CHINESE; otherwise, it’s like getting a legal letter in Mandarin Chinese here in the US, it is a guarantee your letter will be tossed to the garbage bin (almost immediately).

Response #2 – Takedown requests.  We have traditionally seen a good (high) success rate in this field ranging from 80% to 95%.  However, the issue is that the same infringer will soon pop up on the same platform under a different name.  Recently, we got more helps.  Alibaba, for example, may now initiate its own program and even pay for a raid action (PM me if you want to know how to get this started).

Advice: still better to count on your own investigation to get rid of the counterfeits.  We do, however, see more compliance in this area.  Overall, good news.

Response #3 – AIC Complaint and Criminal Action. Personally, I think this is the most effective way to stamp out counterfeiters and cut them off from the very source.  It essentially takes an online matter offline.

The process is divided to several mini steps.  This includes identifying the top #3-5 counterfeiters with wholesale capability on key online platforms in China (the selection criteria varies depending on your rights in China and the type of industry you are in).  An onsite investigation will then be carried out with the goal to identify the specific warehouse location and, if possible, the exact manufacturing facilities (this takes about 2-3 months). Once you got this info, have them notarized, and then, all you need to do is to file an AIC complaint.

P.S. this is now our specialty in China: it simply cannot get more exciting to have an enforcement matter with a super crazy fast timeline along with difficult government officials. If you think the government workers in the Western world have an attitude, wait until you have the pleasure to deal with one in China.

In the past, AIC officials (similar to local sheriff here in the US) have been reluctant to take actions.  Now, things are a bit different (since Alibaba is under tremendous international pressure for becoming (or being) the source of counterfeiters) — we are seeing better response from AIC officials and more subsequent raid actions.  Most importantly, we also see rising criminal actions and jail time in this part of practice which – as everyone knows — is a better deterrent to bad guys in China.

A Million Dollar Question – what is magic number to push a regular AIC action to a criminal case? RMB $50,000 — approximately $7300 (USD).  Not high at all.  Another good news, this is the REVENUE, not profit. Next time, when you have a counterfeit case in China with a potential big fish – consider making it CRIMINAL!

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