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Crack Down on Counterfeits Nationwide to Lower Enterprise Cost of Rights Protection

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Certain distillery is a Fortune 500 company, constantly winner of domestic and international awards, and one of the few enterprises possessing renowned trademarks in the Chinese liquor industry. In 2009, the company was listed on the Shenzhen Stock Exchange. In 2012, the company entered the ranks of FT 500 companies. With marketing achievements climbing steadily in recent years, the company consistently ranks among the top three of this industry. However, since its products are quite popular among consumers, there has been a flood of fake liquor on the market, which can harm the body after being consumed. As always, fake liquor is a malignant tumor of the market and a sore point with enterprises. In order to protect consumer rights and interests and the reputation of its own brand, in collaboration with local market supervision administrations, certain distillery had invested a lot of money and effort to conduct administrative crackdown on counterfeiting, which however received little effect. This is because the amount of administrative penalty is determined based on the profit earned by counterfeit sellers; due to the elusive nature of their infringement act, the quantity of fake liquor seized is usually small, so the amount of administrative penalty is often just a few thousand yuan. The price for infringement act is much lower than the profit earned by selling counterfeit products; so many stores keep selling fake liquor after receiving administrative punishment.

In 2018 certain distillery entrusted Pinwei with cracking down the sales of fake liquor. By taking advent of its nationwide attorney resources, Pinwei carried out crackdown on counterfeit products throughout the country, and closed all 330 cases across 25 provinces and cities within 10 months, among which the highest amount of compensation in single case reaches 300,000 yuan, and the average amount of compensation exceeds 12,000 yuan. Those accused of selling counterfeit products received administrative punishment while being held accountable for civil compensation liability, which increased cost of infringement to a great extent. During the period of litigation, many stores chose cancelation or cooperation with certain distillery to become its agent. Thus, the distillery managed to protect its rights through total-risk commissioning, which not only prevented increase in the cost of rights protection, but also brought in compensation payment, thereby lowering the cost of rights protection by the distillery itself.

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