A Shanghai court has ordered a Chinese company to pay Rmb1.25m ($183,000) in damages to UK drinks group Diageo for copying its packaging as part of a government crackdown on rampant piracy.
The court found that Blueblood (Shanghai) Wine Co copied the bottle design and packaging of Diageo’s popular Johnnie Walker Black Label whisky and continued to do so even after being fined by the Shanghai government, following a complaint from Diageo in 2006. The award is unusually high and comes amid a Shanghai government anti-piracy campaign, in which officials are trying to show their commitment to protecting intellectual property rights.
Lawyers who specialise in intellectual property cases say the Diageo ruling, although clearly part of a propaganda offensive, does signal the Chinese authorities are taking counterfeiting much more seriously than in previous years.
China is the biggest source of counterfeit goods in the world, and intellectual property protection is a perennial issue at trade negotiations and diplomatic exchanges with other countries.
In Diageo’s case, the Chinese company copied packaging rather than any registered patent, copyright or trademark, and the guilty verdict signalled a greater level of sophistication from the courts than most previous rulings, lawyers said.
Chinese courts dealt with more than 17,000 intellectual property cases last year, compared with just over 400 handled by courts in the UK in the same period.
The vast majority of cases in China involve local companies suing other local companies as Chinese businessmen become increasingly willing to use the law to protect intangible assets.
But companies that win court cases in China often have difficulty getting the rulings enforced.
“Generally speaking enforcement is still a big issue, especially outside the major centres of Beijing and Shanghai,” according to Luke Minford, head of China for intellectual property consultancy Rouse.
Johnnie Walker is sold in 150 cities in China and earned Diageo Rmb320m in sales nationwide last year, according to state media reports of the court’s verdict.
Blueblood sold 37,000 bottles of its Polonius brand whisky, which used packaging that was nearly identical to the Black Label brand.
Blueblood has 15 days to appeal against the ruling but had not lodged an appeal by yesterday evening.
On the same day as the Diageo ruling, the Shanghai court handed down verdicts on 13 other cases, nine of which involved international companies, including 3M, Nippon Electric, New Zealand kiwifruit company Zespri and Rock Records, a Taiwanese record label, state media reported.
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