THE SCOTCH Whisky Association has won a major legal counterfeiting battle in China - over fake bottle tops.
It is the first time the SWA has successfully concluded civil proceedings in the country, and industry leaders claim the legal breakthrough sends a clear warning to other potential counterfeiters.
A Chinese court has ruled in favour of Scotch whisky against a packaging company in the Anhui province of the country, where imports are worth £39 million.
The Scotch Whisky Association’s (SWA) battle was against Anhui Guangyu Packaging Technology Company Ltd.
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”.
They took the case to the Anqing Intermediate People’s Court in eastern China.
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 trademark 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.
After subjecting the SWA’s evidence to careful scrutiny, the protected legal status of Scotch whisky was upheld. The international aspect of the case was also a precedent, according to the association.
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 contents of the bottle are not Scotch. In this instance, the SWA convinced the court that the caps were to be used illegally although no complete bottles were actually discovered.
The SWA claims 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 judgment has become final, we are focusing on enforcing the award of damages.
“There is also a possible criminal case against the director of Annhui Packaging Technology Company and discussions are ongoing with the public prosecutor.”
The success comes just days after Scotch whisky was given top legal protection across 17 African countries. The brand has been registered as a geographical indication (GI) – a whisky produced in Scotland in accordance with UK law.