There is a view that counterfeiters of certification marks can be prosecuted on the charge of manufacturing or selling fake and substandard products or the charge of manufacturing or selling products not qualified for safety standards. However, there have been numerous obstacles in judicial practice to charge the act of counterfeiting certification marks with the crimes such as manufacturing or selling fake and substandard products.

First of all, the thresholds of these crimes are higher than that of trademark infringement crimes. According to Article 140 of the Criminal Law and Article 2 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Certain Issues Concerning the Application of Law in Handling Criminal Cases Involving Manufacturing or Selling Fake and Substandard Commodities (herein referred to as “the Interpretation”), the criminal threshold of the charge of manufacturing or selling fake and substandard products is that the sales volume of the infringing products reaches RMB 50,000 or the value of unsold infringing products reaches RMB 150,000. This is much higher than the threshold of the charge of counterfeiting registered trademark, which is that the volume of illegal operation reaches RMB 50,000 (in the case of infringing two or more trademarks, the threshold is RMB 30,000). In accordance with Article 22 of the Provision on the Threshold of Criminal Cases within the Competence of Police issued by the Supreme People’s Procuratorate and the Ministry of Public Security, the threshold of the charge of manufacturing or selling products not qualified for safety standards further requires that the behavior causes injury or direct economic loss of more than RMB 100,000.

It is also unclear with regards to the identification of incompliance of relevant quality standards. Legal departments have discrepancy in how to identify the incompliance of “national laws, regulations or quality requirements explicitly specified in related quality standards of the goods” and “requirements of quality standards specified on the products or the packages” provided in Article 1 of the Interpretation. The police usually need to entrust quality inspection institutes to assess whether the products satisfy the quality standards, which slows down the process of cases and also adds weight to the trademark owners’ burden. There is also great dispute as to whether the related quality standards cover the safety standards accredited by foreign certification agencies.

Moreover, under certain conditions, infringers cannot be charged. In such cases that counterfeiters manufacture or sell goods bearing fake certification marks which also do not comply with relevant quality standards, it’s possible to prosecute them on the charge of manufacturing or selling fake and substandard products. However, in more common cases, the goods bearing fake certification marks meet the quality standards. If the “registered trademarks” in Article 213 and 214 of the Criminal Law excludes certification marks, in such case, the infringers will not be charged. In addition, if the “registered trademarks” in Article 215 of the Criminal Law excludes certification marks, the behavior of manufacturing and selling illegally manufactured sign of certification marks will be out of criminal prosecution.

4. Relevant criminal judgments of infringement on certification marks

Among the cases publicized on the official website of the US Department of Justice on July 15, 2013, a company pleaded guilty before the US Federal Court in July 2013 for the crime of trafficking goods with counterfeit marks for its act of certification mark infringement in the US. There have been quite a lot of relevant criminal judgments in China as well. There are statistics that from 2011 to October 2013, Shanghai, Zhejiang and Guangdong judicial departments have dealt with a series of criminal cases of counterfeiting UL certification marks held by the Underwriters Laboratories Inc., all of which are adjudged to be guilty of constituting the crime of counterfeiting registered trademark and other trademark infringement crimes. Among the cases, 24 were transferred for prosecution review by procuratorates involving 42 defendants (all charged of trademark infringement crimes like the crime of counterfeiting registered trademark); judgments of 19 cases involving 32 defendants have already been rendered after the trial of first instance, among which the judgments of 14 cases involving 24 defendants are effective in first trial, and the orders of 4 cases involving 7 defendants are effective in second trial (all the judgments and orders hold that the defendants are guilty of trademark infringement crimes like the crime of counterfeiting a registered trademark).

5. Conclusion

So far, judicial authorities in some regions have different understandings on whether certification mark is included in “registered trademark” as stipulated in Article 213, 214 and 215 of the Criminal Law. We suggest the legislation authorities amend or issue relevant judicial interpretations on the above Articles so as to include certification marks as crime objects in trademark infringement crimes such as the crime of counterfeiting registered trademark and explicitly put certification marks under the protection of the Criminal Law.

*The Underwriters Laboratories Inc. made important contribution to this article.