Manufacturing and Selling Counterfeit Goods Entails Both Criminal and Civil Liability

Manufacturing and selling goods bearing counterfeit registered trademarks, when the circumstances are serious and meet the statutory criteria for criminal conviction, will not only subject the perpetrator to administrative penalties but also cross the criminal red line, constituting the crime of counterfeiting registered trademarks.

Beyond criminal prosecution, if the act causes significant economic losses to the trademark right holder, the right holder may also file an incidental civil action or a separate civil lawsuit to pursue civil compensation according to law. The parallel application of criminal liability and civil compensation liability has become an important rule of law in cracking down on trademark infringement.

Recently, the Fujian Provincial Higher People’s Court issued a second-instance final judgment on the trademark infringement case brought by Skechers (Quanzhou) Enterprise Management Co., Ltd. against Lin Moumou and five other defendants. The court upheld the first-instance judgment, ordering Lin Moumou to compensate Skechers Quanzhou Company a total of RMB 4 million for economic losses and reasonable rights enforcement expenses, and the other five defendants to bear joint and several compensation liability within their respective scopes.

It is reported that the six defendants had previously been found guilty of the crime of counterfeiting registered trademarks by an effective criminal judgment for the same facts, and had either served their prison terms or paid fines.

Brand Popularity Spawns Counterfeiting Chain, Multiple Defendants Convicted

Skechers is a well-known footwear and apparel brand originating from the United States. Its series of trademarks including “Skechers” and “SKECHERS” have enjoyed high popularity in the consumer market after long-term operation and promotion by the right holder, Skechers U.S.A., Inc.

On January 18, 2024, Skechers U.S.A., Inc. authorized Skechers Quanzhou Company to handle intellectual property matters related to the Skechers brand, granting a non-exclusive right of use.

Starting from August 2020, defendant Lin Moumou received orders for counterfeit Skechers sneakers from a third party You Mou, then organized production. He successively entrusted Lin Haimou to purchase raw and auxiliary materials, arranged for Lin Mou to be in charge of factory management, and subcontracted the upper processing 环节 to Su Moumou, who further assigned the specific work to Chen Moumou. Meanwhile, he employed Su Weimou to be responsible for template making and equipment debugging.

On October 25, 2023, public security authorities seized a large number of semi-finished products such as shoe uppers, tongues and heels printed with the Skechers logo at a processing factory in Hanjiang District, Putian City, Fujian Province. Appraised by the right holder, all the above items were unauthorized counterfeit products.

Subsequently, the procuratorate initiated a public prosecution against Lin Moumou, Lin Haimou and others.

On September 23, 2024, the Licheng District People’s Court of Quanzhou issued a first-instance criminal judgment, finding all defendants guilty of the crime of counterfeiting registered trademarks and sentencing them to respective fixed-term imprisonment and fines. Among them, the principal offender Lin Moumou was sentenced to six years’ imprisonment, a fine of RMB 1.5 million, and ordered to surrender RMB 450,000 of illegal gains. Lin Moumou and others refused to accept the judgment and appealed to the Quanzhou Intermediate People’s Court, which ruled on January 21, 2025 to dismiss the appeal and uphold the original judgment.

Civil Compensation Follows After Criminal Punishment

The criminal ruling did not end the disputes. On May 23, 2025, Skechers Quanzhou Company filed a trademark infringement lawsuit against Lin Moumou, Lin Mou and four other defendants with the Quanzhou Intermediate People’s Court, claiming five times punitive damages and a total of RMB 10 million for economic losses and reasonable expenses.

At trial, the six defendants argued that they had already received criminal punishment and should not bear high civil compensation. They also claimed that the amount asserted by Skechers Quanzhou Company far exceeded the illegal gains determined in the criminal case and lacked sufficient evidence.

After hearing the case, the Quanzhou Intermediate People’s Court held that the six defendants had clear division of labor and close collaboration. They used the same trademark on identical goods without the permission of the trademark right holder, constituting joint infringement. They shall bear joint and several compensation liability within their respective scopes of responsibility in accordance with Article 1168 of the Civil Code and other relevant provisions.

Considering factors such as the reputation of the involved trademark, infringement circumstances and subjective malice, the court issued the first-instance civil judgment on November 12, 2025: Lin Moumou shall pay RMB 4 million in compensation; Lin Mou shall bear joint and several liability for RMB 1 million of the amount; the remaining four defendants shall each bear joint and several liability within their corresponding scopes.

After the first-instance judgment, the six defendants refused to accept and appealed to the Fujian Provincial Higher People’s Court.

The appellants claimed that Skechers Quanzhou Company only obtained ordinary license authorization, and the right holder Skechers U.S.A., Inc. had not waived its own right of action, posing a risk of duplicate litigation. Therefore, Skechers Quanzhou Company was not qualified to sue. They also argued that the company could only claim compensation for infringement acts after the authorization date (January 18, 2024) and had no right to trace back previous acts.

After hearing the case and examining the evidence on file, the Fujian Provincial Higher People’s Court rejected all appeal requests and upheld the original judgment.

“Criminal First, Civil Second” Sets an Example, High Compensation Demonstrates Deterrence

This case is a typical practice of the “criminal first, civil second” model, sending three signals:

First, criminal fines and civil compensation run parallel, greatly increasing the cost of infringement violations.

Second, in civil proceedings, the court did not rigidly adhere to the “illegal gains” under the criminal standard. Instead, it determined the compensation amount based on the total infringement revenue of over RMB 22.97 million, combined with industry profit levels, enhancing the rationality of calculation.

Third, the case reflects the judicial system’s orientation of strengthening intellectual property protection and optimizing the business environment, providing a referential model for brand owners to adopt the strategy of “criminal action first, civil follow-up” in rights protection.

This case fully demonstrates that intellectual property protection is not “one judgment and done”. Criminal prosecution and civil recovery can work in parallel to form a superimposed deterrent effect.