A golf club distributor and a retail golf shop owner in Shanghai were both convicted of selling counterfeit products bearing registered trademarks of members of the U.S. Golf Manufacturers Anti-Counterfeiting Working Group (comprised of Acushnet Company, Callaway Golf, Cleveland Golf, Nike, PING and TaylorMade Golf Company). The defendants were sentenced to imprisonment for 3.5 years and 6 months respectively by Shanghai Zhabei District Court according to a decision made on March 30, 2006 and announced earlier this week.
The convicted distributor, Mr. Chen Hui was a major supplier of counterfeit golf clubs to shops in the Shanghai Mart. He was arrested on October 25, 2005 by the Zhabei Public Security Bureau (“PSB”) during a large scale raid action targeting four major counterfeit golf product dealers in Shanghai. The PSB found and seized 1,362 counterfeit golf clubs in Chen’s warehouse located in a residential building bearing registered trademarks of Callaway Golf, Cleveland Golf, Nike, PING, TaylorMade and Titleist. Some sales records were also found at Chen’s apartment. Chen was immediately arrested and put into a detention house. Shanghai Zhabei District Court tried the case in early March 2006 and ruled that the defendant’s sales records alone were sufficient to prove prior sales of counterfeit golf products. This documentary evidence provided a legal basis for establishing the crime of selling goods with a counterfeit registered trademark. In many cases a court would require testimony from witnesses to prove prior sales, however in this case the court found that Chen had sold counterfeit golf clubs valued at more than $75,000 USD (RMB600,000), an amount which constitutes a “very severe circumstance” (the threshold for a higher penalty according to the China Criminal Code). The court sentenced Chen to imprisonment for 3.5 years and a fine of approximately $3,700 USD (RMB30,000).
The convicted retailer, Ms. Bai Hong, is the owner of a retail golf shop located at the Shanghai Mart. Bai was a customer of Chen Hui. Bai’s shop had been the only golf shop remaining in the Shanghai Mart after a series of raid actions were conducted by the local AIC at the urging of U.S. Golf Manufacturers Anti-Counterfeiting Working Group against several Shanghai Mart golf shops in 2004 and 2005. Her shop was raided by the PSB on October 25, 2005. Bai was arrested on the same day as she was delivering 74 sets of counterfeit golf clubs to a customer. The court found Bai guilty, but imposed a lighter sentence of 6 months of imprisonment, one year of probation and a fine of approximately $2,500 (RMB20,000) after Bai provided assistance to law enforcement that helped lead to the arrest and conviction of Chen Hui.
Loo Shih Yann, a principal with the international law firm of Baker and McKenzie who is coordinating efforts on behalf of the U.S. Golf Manufacturers Anti-Counterfeiting Working Group in China, welcomed the court decision and commented that a very important message has been sent to the counterfeiters that the law enforcement authorities in Shanghai are serious in fighting intellectual property rights violations and that those persons making and selling counterfeits may face very severe punishment. “We are very pleased and encouraged by the court decision. We hope this practice will be followed consistently in the other regions in China,” said Mr. Loo.