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Chinese Counterfeiter Gets Life Sentence

In a recent case out of China’s Heyuan Intermediate People’s Court, Xiao Zhenjiang, the leader of a counterfeiting gang was sentenced to life in prison and all of his belongings and property were confiscated. The arrest happened after public security officials last year raided his factory in the small city of Heyuan, according to a statement on the court’s website.

Officials found 100 million yuan (about $15.7 million) worth of fake Hermes purses, the statement said. Three accomplices were sentenced to seven to 10 years in prison and were handed fines of 500,000 yuan to 800,000 yuan ($79,000 to $126,000). According to the court, Xiao was reportedly a repeat-offender and the gang was allegedly passing off the goods as genuine.

This case stands out due to both the severity of the sentences as well as the huge amount of counterfeit goods at stake. Legal experts said that the sentence is unusually severe, as the average criminal sentence handed to counterfeiters is three to seven years in prison.

Another reason that the decision is of interest is that the court chose to refer to the market value of the goods as if they were genuine, not the street price for the knockoff purses. This is something seldom seen in Chinese opinions and has important implications in terms of criminal sentencing as value determines whether prosecutors are interested in pursuing the case in the first place. The decision marks a major victory for brands that have been pushing for such a calculation of value for years and may be a sign that China is beginning to take counterfeiting seriously.

Given recent episodes of death and serious illness related to counterfeit pharmaceuticals and health products sentences for those behind the fake products have been increasingly severe. It’s rare however for such a sentence when the offender was primarily making counterfeit luxury goods.

Though the Chinese have often been accused of being soft on IP infringement, this latest example seems to run counter to that notion. Many Western observers hope that the severe penalties have the intended effect of reducing the rampant piracy that exists in China.

Source:Hermes counterfeiter gets life sentence in China,” by Laurie Burkitt, published at MarketWatch.com.

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