A consortium of counterfeiters faced charges and convictions in China recently for its sophisticated production, assembly, and marketing of fake Rolex watches. The scheme ran from July 2015 to April 2021, and involved about 300,000,000 RMB (Chinese Yuan Renminbi), the equivalent of about $41.1 million.
In July 2023, the People’s Court for the Zhenjiang Economic Development Zone sentenced 15 defendants. Though some sentences were suspended, the most severe included six years and six months behind bars, as well as fines. The defendants were accused of counterfeiting and infringing on registered trademarks assigned to the luxury wristwatch brand Rolex and other name brands.
The defendants collaborated to manufacture and sell Rolex and other wristwatch brands possessing registered trademarks, in Guangzhou City. They purchased counterfeit parts and the group built a factory to assemble and package the watches. They marketed the counterfeit watches to other co-conspirators, collected the money and distributed the profits among them.
One defendant was assigned the task of disassembling the watch movements he had procured, and other defendants marked the movements with the Rolex crown logo before reassembling the movements.
Some of the men charged knew that the group was selling fake Rolexes and other brands imprinted with counterfeit trademarks, but they continued to buy and resell them. The court estimated the value of the counterfeit ring at 300 million RMB.
The People’s Court ruled that defendants used Rolex’s registered trademark to brand counterfeit watches without Rolex’s permission, and they were convicted of counterfeiting a registered trademark. Others knowingly sold watches with Rolex’s counterfeit trademark and were convicted of selling commodities with counterfeit registered trademarks. The court noted the degree of harm done to society during sentencing.
The judge who presided over the case said the convictions are a satisfying part of a widespread counterfeit watch probe the Zhenjiang public security agents had been investigating since 2021. The judge chastised the defendants for knowingly engaging in the fraud and severely damaging Rolex’s and other reputations and the protection that registering trademarks provides, and for disrupting the economy by flooding the market with knockoffs. These judgments reaffirmed the court’s belief in innovation and its dedication to cracking down on counterfeiting crimes.
Companies that register U.S. trademarks brand their products to let consumers know that when they buy them, they will know they were manufactured to the standard the company is known for. The word Rolex, and the crown logo, are meant for exclusive use by their owner the Hans Wilsdorf Foundation. Hans Wilsdorf created Wilsdorf & Davis, manufacturers of the Rolex watch, in 1905. Since 1960, Rolex has been manufactured by the Hans Wilsdorf Foundation, located in Geneva.
In 2020, the U.S. Department of Homeland Security recovered more than 26,000 shipments of counterfeit goods at the U.S. borders, valued at over $1.3 billion. Actively engaging in counterfeiting, including purchasing counterfeit luxury goods, is a federal felony.
If you have been accused of manufacturing, distributing, or purchasing counterfeit goods, or you believe you are the victim of trademark infringement, our intellectual property lawyers are available to explore a strategy that resolves your problem.