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The Trial

Four defendants in China were recently accused of selling refurbished BlackBerry phones for profit without permission from Canadian owners Research in Motion Ltd. (RIM). Beginning in March 2009, a Mr. Liu and three others were alleged to have engaged in the purchase of second-hand BlackBerry mobile phones (with the BlackBerry Trademark) that they then refurbished, assembled, and sold for a profit of approximately ¥290,000.

On 27th June, 2011, the Intermediate People’s Court of Shenzhen City affirmed an initial trial’s decision against the four defendants and sentenced them to prison terms of sixteen to forty-two months each for counterfeiting registered trademarks.

The Crux of the Issue

According to Article 213 of the China Criminal Law and related judicial interpretations, the precondition that constitutes counterfeiting registered trademarks is that the goods produced and/or sold by the accused suspects and the goods manufactured by a famous trademark are identical kinds of goods.

In the case at hand, the infringed upon registered trademark is owned in China by RIM. The categories of products covered by this registration are data processing devices, transmitters (for telecommunication purposes) and computer software.

The public prosecutor held that the counterfeited BlackBerry products had processing functions that could be defined as data processing devices, qualifying the phones as an identical kind of good under the registered Trademark. The defendants argued that the counterfeited Blackberry products are mobile phones rather than products that fell into the aforementioned three categories. If upheld, the four defendants would be found innocent.

The Court’s Views

On 10th January, 2011, the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security jointly issued the Opinions Concerning Several Law Application Issues in Handling Criminal Intellectual Property Infringement Cases (“Opinions”), in which Article 5 explicitly sets standards for determining “identical kind of goods”, providing that identical kind of goods can be goods with identical names or goods with different names referring to the same thing; meaning goods with the same or almost the same function, purpose, main materials, consumers, distribution network, or sales channels, and which are believed by the general public to be the same thing are considered an “identical kind of goods”.

Following this issuance, the courts that had initially tried the case finally adopted the prosecutor’s opinions which held that the counterfeited Blackberry products were similar devices with networking functions rather than traditional mobile phones with the sole purpose of placing phone calls. The conclusion was based on the fact that the counterfeited Blackberry products can also send/receive e-mails, etc.

This trademark counterfeiting case has opened serious discussion between parties involved on how to determine an identical kind of good as well as if, and under what conditions refurbishment of second-hand mobile phones constitutes a crime against registered trademarks. We should take note not only of the jungle of new laws and regulations but also of the ongoing debate between judges on the issue of the development of Chinese jurisprudence as it adopts more western standards.

Disclaimer
This article is intended solely for informational purposes and does not constitute legal advice. Although the information in this article was obtained from reliable official sources, no guarantee is made with regard to its accuracy and completeness. For more information please visit dandreapartners.com or WeChat: dandreapartners.
 

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