Lower Court Docket No.: 352, first instance (初), criminal case (刑), (2021) 0281, the Yuyao People's Court of Zhejiang Province (浙)

SUMMARY OF THE ARGUMENT

In the context of strict protection of intellectual property rights, it is not only conducive to strengthening the punishment of infringers and obtaining timely economic compensations for right holders, but also helpful in effectively controlling and reducing the rights-defending costs of right holders and in saving valuable judicial resources by guiding right holders to file civil suits collateral to criminal proceedings.

STATEMENT OF THE CASE AND FACTS

YUYAO PEOPLE’S PROCURATORATE OF ZHEJIANG PROVINCE

Public prosecution organ

ANDREAS STIHL AG & CO. KG

Plaintiff

v.

NINGBO MOUMOU SAW CHAINS TECHNOLOGY CO., LTD.,

Defendant

Lu *jun and others

Defendants

ANDREAS STIHL AG & CO. KG ("STIHL") was incorporated in 1926 and has been existing as an international group of companies under German law. It is also a world-renowned manufacturer of power tools for landscape maintenance and construction industries. On September 14, 2000, STIHL was granted the trademark registration of No. 1445026 trademark "" in Class 7 goods "chain saws (machines) and special parts thereof, such as saw chains, etc.". The "STIHL" trademark No. 1445026 has been recognized as a well-known trademark for chain saws (machines) and related goods by state administrative and judicial organs multiple times through the long-term use and extensive publicity of STIHL. In China, STIHL invests a lot of resources every year to defend its legitimate rights and interests and to effectively combat illegal and criminal acts of counterfeiting the "STIHL"-brand saw chains.

Lu *jun is a professional in the saw chain industry and very familiar with domestic and foreign saw chain brands and the development of the industry. He is also very familiar with the brand awareness of the "STIHL" brand of saw chains and the business value it contains. In 2003, Lu *jun set up Ningbo Moumou Saw Chains Technology Co., Ltd. ("Ningbo Moumou") to produce and sell saw chain products. To gain illegal profits, Lu *jun and others started to counterfeit the "STIHL"-brand saw chains from 2014. In the same year, Yuyao ** Tools Co, Ltd. operated by Lu *jun was administratively punished three times by the market supervision department for counterfeiting the "STIHL"-brand saw chains. On January 8, 2020, Lu *jun and his controlled Ningbo Moumou, Lu *man and Lu *dong were criminally investigated for counterfeiting the "STIHL"-brand saw chains.

After Lu *jun and the others were transferred to the Yuyao People's Procuratorate of Zhejiang Province ("Yuyao Procuratorate") by the public security authorities for review and prosecution, STIHL timely proposed a civil suit collateral to criminal proceedings, which was supported by the Yuyao Procuratorate and the Yuyao Court. The Yuyao People's Court of Zhejiang Province made the final ruling that the defendant organization, Ningbo Moumou had constituted the crime of counterfeiting registered trademark and was punished with a fine of RMB 120,000; Defendant Lu *jun had constituted the crime of counterfeiting registered trademarks and was sentenced to three years’ imprisonment with four years’ probation and fined RMB 120,000; Defendant Lu *man had constituted the crime of counterfeiting registered trademarks and was sentenced to two years’ imprisonment with three years’ probation and fined RMB 80,000; Defendant Lu *dong had constituted the crime of counterfeiting registered trademarks and was sentenced to two years’ imprisonment with three years’ probation and fined RMB 80,000; and the Defendant Organization Ningbo Moumou shall compensate STIHL, Plaintiff of the civil suit collateral to criminal proceedings, for the economic loss of RMB 500,000. After the first instance ruling was rendered, all parties indicated that they would not appeal, and the ruling has now been in effect.

Lawyers from Beijing Wanhuida Law Firm represented the Plaintiff Organization (STIHL) and appeared before the court in the first instance of this case.

ANALYSIS

The comprehensive strengthening of the protection of intellectual property rights has become the state's will. The General Office of the Central Committee of the CPC and the General Office of the State Council issued the Opinions on Strengthening Reform and Innovation in Intellectual Property Rights Trials on February 27, 2018, and the Opinions on Strengthening the Protection of Intellectual Property Rights on November 24, 2019, which require to "improve the litigation system of intellectual property rights, enhance punishment for intellectual property rights infringement and violations, reduce the cost of rights protection, strengthen institutional constraints, and establish the policy guidance of strict protection of intellectual property rights." The Supreme People's Court of the PRC and regional high people's courts also issued timely judicial opinions to actively implement the national policy of strong protection of intellectual property rights. On April 15, 2020, the Supreme People's Court of the PRC issued the Opinions on Comprehensively Strengthening the Judicial Protection of Intellectual Property Rights, which requires "the in-depth implementation of the 'three-in-one' trial mechanism, the proper handling of criminal, administrative and civil crossover cases of intellectual property rights, and the improvement of the overall effectiveness of judicial protection of intellectual property rights." On January 18, 2021, the High People's Court of Zhejiang Province issued the Implementation Opinions on Comprehensively Strengthening the Judicial Protection of Intellectual Property Rights, emphasizing to "guide rights holders to file civil suits collateral to criminal proceedings in accordance with the law." Under such context of strict protection of intellectual property rights, Wanhuida Law Firm represented STIHL to defend the company's rights and successfully facilitated the civil suit collateral to criminal proceedings, which not only enhanced the punishment of the infringers, secured timely economic compensation for STIHL, effectively controlled and reduced the cost of rights defense for the right holder, and saved valuable judicial resources.

In this case, the procuratorate and the court proceeded with the civil suit collateral to criminal proceedings according to the specific circumstances of the case, not only holding Lu *jun and the others criminally liable in the same case, but also making Ningbo Moumou controlled by Lu *jun bear the civil liability for the loss of the right holder, STIHL, and realized the comprehensive protection of the intellectual property rights involved. This case has been selected as a "Typical Case of Intellectual Property Protection" by Zhejiang Provincial Procuratorate and a "Typical Criminal Case of Intellectual Property Rights" by Yuyao Court.