Legal breakthrough for Scotch Whisky in China

17 Sep 2015

Success against counterfeiter in the Chinese courts

A Chinese court ruling in favour of Scotch Whisky against a packaging firm in the Anhui province of the country is being heralded as a legal breakthrough and a warning to other potential counterfeiters.

The Scotch Whisky Association (SWA) has won a court battle against Anhui Guangyu Packaging Technology Company Ltd in the Anqing Intermediate People's Court in eastern China. The firm was manufacturing bottle caps imprinted with the words 'Scotch Whisky'. These caps were used on bottles of fake 'Scotch' appearing on sale more than 1,000 miles away in Myanmar.

The SWA sued Guangyu and its director using intellectual property rights around the words 'Scotch Whisky'. Guangyu defended proceedings but the court has now upheld the SWA's complaint and granted an injunction ordering Guangyu to stop infringement of the 'Scotch Whisky' trade mark and pay damages and costs.

The court victory represents a number of 'firsts' for the industry, according to the SWA.

Although the SWA has obtained many favourable administrative decisions against infringers, this was the first time it had concluded proceedings in the Chinese civil courts. The penalties are greater in court than with administrative procedures. And after subjecting the SWA's evidence to careful scrutiny, the protected legal status of Scotch Whisky was upheld, sending a clear message to other would-be counterfeiters.

The international aspect of the case was also a precedent. It involved the SWA disrupting a cross-border supply chain. Previously the Association has only taken action against products manufactured and sold in China.

Significantly, this was the first case where the SWA has successfully taken action against a manufacturer of packaging. Normally it sues after demonstrating that the liquid inside the bottle is not Scotch. In this instance the SWA convinced the court that the caps were to be used illegally although no complete bottles were discovered. The SWA says this is helpful as more manufacturers of fake spirits split the production process between different locations to reduce the chance of being caught.

Lindesay Low, SWA senior legal counsel, said: "This victory in the Chinese civil court is significant for a number of reasons and should be seen as a legal breakthrough. We are confident this will help deter other potential counterfeiters and fraudsters in China.

"Now that the appeal period has expired and the judgement has become final, we are focussing on enforcing the award of damages. There is also a possible criminal case against the director of Anhui Packaging Technology Company and discussions are ongoing with the public prosecutor."

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With media queries please contact Rosemary Gallagher, Scotch Whisky Association head of communications, 0044 131 222 9230 or 0044 7432 605385, email rgallagher@swa.org.uk

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