Repackaging original Ferrero Rocher is a crime

On August 19, 2021, the Shanghai Third Intermediate Court released a news through its social media account regarding a criminal judgement stating that the repackaging of authentic Ferrero Rocher chocolates using Ferrero Rocher trademarks and labels without authorization would constitute crime of counterfeiting trademark.

Let’s put our eyes back in 2020. In January, the Ferrero marketing system researched and found that the sales of a variety of "Ferrero" gift box chocolates in some online e-commerce platforms exceeded the total marketing volume of the company.

In October, Shanghai City Public Security Bureau (PSB) released a news that they have conducted criminal raid action against multiple targets in Shanghai, Guangdong and Zhejiang in July 2020, detained 18 criminal suspects and seized around 7,900 pcs product packaging boxes as well as 900,000 pcs labels bearing counterfeiting trademarks. The amount involved would be around RMB 13 million.

The PSB found that the criminal suspect LIU made purchase of original Ferrero products in bulk with the price of RMB 1.88/pc and then repackage them without authorization in its factory in Shanghai. 

The packaging tapes and the packaging boxes were respectively purchased from the criminal suspect WEI located in Guangdong Province and criminal suspect PAN located in Zhejiang Province.

The branded labels, trays, backing cards and cartons were purchased from the criminal suspect YANG located in Shanghai. LIU repackaged the products and made sale with the price of around RMB 3–4/pc.

packaging tapes and the packaging boxes

branded labels, trays, backing cards andcartons

Now let’s get back to the judgement released by the court. The court confirmed below facts:

1. Since 2019, the defendant LIU, for the purpose of illegal profit, without the authorization of the owner of the registered trademark purchased "Ferrero" T96 (package with 96 pcs), T30 (package with 30 pcs) and other low-priced products. LIU commissioned others to illegally manufacture labels, backing cards, plastic boxes, bottom trays, outer cartons, tape and other packaging materials bearing the registered trademark "Ferrero" and hired workers to dispense the purchased chocolates with counterfeit packaging materials into commodities with a higher price such as "Ferrero" brand T8 (8 pcs packaging), T16 (16 pcs packaging), T24 (24pcs packaging), T32 (32 pcs packaging), etc. in their rented premises, and then sold them to the public for profit.

2. From July to September 2020, the PSB seized more than 490,000 pieces of suspected counterfeit product packaging and other items with "Ferrero" trademarks, involving more than 800,000 "Ferrero" trademark related labels.

3. The seized products involved were identified as using the same trademark logo as the registered trademark of the right holder without the authorization of the right holder.

4. Upon sampling verification, the chocolate products are produced by Ferrero and there were no significant differences in terms of shape, structure and raw materials spotted on unsampled products between original products.

5. Upon auditing, from July 2018 to July 2020, the defendant LIU commissioned others to forge packaging materials with the registered trademark "Ferrero", involving more than 5.65 million labels, and actually paid more than 1.7 million yuan for the logos involved.

The Court deemed that the defendant LIU, without the authorization of the right holder, entrusted others to forge the registered trademark logo of Ferrero, which amounted to more than 5,650,000 pieces, and actually paid more than 1.7 million yuan for the logo, such scenario constituted “particularly severe” and therefore constitute crime for counterfeiting trademarks.

The Court, in the news, also commented that the defendant purchased genuine Ferrero chocolates with low unit price specifications, but he commissioned others to manufacture packaging materials with the registered trademark logo of the right holder in large quantities, aiming to make illegal profits by purchasing low-priced products and replacing the packaging to pass them off as high-priced products, which not only undermined China's trademark printing management regulations, but also caused damage to the goodwill of the right holder and the rights and interests of consumers.

In addition, the defendant did not have the ability to make the foodstuffs distribution system and did not have the qualification of food packaging license and cannot guarantee that the sanitary environment conditions of packaging and the health condition of packaging personnel meet the packaging standards, which poses food safety risks and poses safety hazards to consumers' health. 

Therefore, the defendant's behavior is socially harmful and therefore meets the elements of the crime of illegally manufacturing registered trademark marks and should be convicted and punished according to law.

We would consider the case being judged under criminal law is of the reason that the defendant here manufactured the logos bearing trademarks without authorization (and also, in large volume). 

Currently the 1st instance trial of the case was just completed and we will keep following on if it becomes a final judgment.