Processing and packing raw materials of unknown origin in packaging bearing a famous trademark, or buying fake goods to mix in with genuine stock, can expose a business owner to criminal prosecution. Judgments from 2017 to 2019 show penalties of imprisonment, confiscation of goods and recovery of illegal profits. They also show how businesses need to control their supply chain.
1. The case in 60 seconds
Processing workshops bought raw materials and additives of unknown origin and printed fake packaging bearing famous trademarks to pack and sell their products. Some dealers bought fake goods to mix in with genuine goods.
When does copying a trademark go beyond a civil dispute or an administrative penalty and become a criminal offence?
Control where raw materials come from, bind dealers by contract and report counterfeits proactively when you find them.
2. What happened?
- Step 01Buying raw materials of unknown origin
Processing workshops bought chemicals, seasoning powders and food additives of unknown origin.
- Step 02Printing fake packaging
They ordered packaging that copied famous trademarks in the seasoning and food additive sector.
- Step 03Packing and selling
They used heat-sealing machines to pack the finished products and put them on the market.
- Step 04Distributors mixing in fakes
Some dealers bought large quantities of fake goods and mixed them in with genuine goods sold to consumers.
- Step 05The courts’ judgments
Judgments No. 09/2019/HS-ST (Bắc Ninh), No. 67/2019/HSST (District 12, Hồ Chí Minh City) and No. 300/2017/HSST (Hà Nội) sentenced the defendants to imprisonment.
3. Where is the legal issue?
When does it become a crime?
When the counterfeiting goes beyond the scale handled by administrative penalties, or involves food, foodstuffs or food additives that threaten public health, it may be prosecuted under Articles 192 and 193 of the Penal Code.
Does the trademark owner have to request prosecution?
No. For offences of producing and trading counterfeit goods, the prosecuting authorities act without needing a request from the trademark owner.
How can a business get drawn in?
Through input materials of unknown origin, through an outsourced processing workshop, or through agents and distributors that mix in counterfeit goods.
How should the trademark owner respond?
Work with the market surveillance authority (Quản lý thị trường) and the police investigation agency to act quickly and protect the brand’s reputation and consumers.
4. From facts to management lessons
| Fact | Analysis | Lesson |
|---|---|---|
| A processing workshop used raw materials of unknown origin, printed fake packaging bearing a famous trademark, then packed and sold the products. | This is producing counterfeit goods. Where the goods are food additives, the criminal risk under Article 193 of the Penal Code is very high because public health is involved. | Use only raw materials with VAT invoices, CO/CQ (certificates of origin and quality) and a declaration of conformity with standards and technical regulations. |
| A dealer bought large quantities of fake goods to mix in with genuine goods. | The person who trades counterfeit goods can also be prosecuted, not only the producer. | Put an undertaking not to trade counterfeit goods, a right to inspect and a right to terminate into the dealer agreement. |
| The defendants were imprisoned; goods and machinery were confiscated and illegal profits recovered. | Criminal penalties come with the loss of all assets used in the offence and damage to reputation that cannot be repaired. | Report early when you find counterfeit goods bearing your trademark. |
Fact: facts in the judgment · Analysis: FC Legal’s assessment · Lesson: what businesses should do.
5. What did the courts decide?
In Criminal Judgments No. 09/2019/HS-ST (Bắc Ninh), No. 67/2019/HSST (District 12, Hồ Chí Minh City) and No. 300/2017/HSST (Hà Nội), the trial panels ruled as follows:
- The defendants were guilty of “producing counterfeit goods” (Article 192 of the Penal Code) or “producing and trading counterfeit goods that are food additives” (Article 193 of the Penal Code), and were sentenced to imprisonment.
- All counterfeit goods, packaging, raw materials of unknown origin, machinery and production tools were confiscated and destroyed; all illegal profits were recovered.
Articles 192 and 193 of the Penal Code 2015 (amended and supplemented in 2017). When counterfeiting of trademarks and packaging goes beyond the scale handled administratively, or involves food, foodstuffs or food additives, the law applies criminal penalties whether or not the trademark owner has made a request.
6. What should businesses do now?
- Control where raw materials and supplies come from. All input materials must have VAT invoices, quality certificates (CO/CQ) and a declaration of conformity with standards and technical regulations. Do not process or pack goods of unknown origin.
- Tighten supply chain and dealer contracts. Include an undertaking not to mix in or trade counterfeit goods or goods that infringe trademarks, together with a right to terminate and to claim compensation for damage to reputation.
- Inspect outsourced processing workshops. Regularly check raw material sources, packaging and the number of labels printed at the processor.
- Work proactively with the authorities. When you find counterfeit goods bearing your trademark, send a crime report to the market surveillance authority and the economic police investigation agency.
Criminal risk does not only affect people who deliberately counterfeit. A small business that takes on processing work, or a dealer that buys cheap goods without checking their origin, can also be drawn in. A file proving the origin of each batch (invoices, CO/CQ, contracts) is the cheapest and most effective defence.
Contact a lawyer →7. Frequently asked questions
Can you face criminal liability for selling counterfeit goods without knowing they were fake?
Fault is assessed in each case. However, without invoices and documents proving origin, it is very hard for a business to prove it did not know.
If the trademark owner does not sue, can the counterfeiter still be prosecuted?
Yes. Offences of producing and trading counterfeit goods are prosecuted without needing a request from the trademark owner.
Can a business (a legal entity) face criminal liability?
The Penal Code 2015 provides that a commercial legal entity can be criminally liable for certain offences, including those under Articles 192 and 193.
Review your supply chain and protect your trademark with FC Legal
For businesses that produce, process and distribute food and consumer goods.
- Review of origin records for raw materials and processing
- Anti-counterfeiting clauses in dealer agreements
- Support with crime reports and coordinated action against counterfeit goods
Please do not send confidential documents or personal data through the form.
IP Case Lesson series · Article 6 of 6 · Previous: Collecting evidence and proving damage in IP disputes
Sources
- People’s Court of Bắc Ninh Province: Judgment No. 09/2019/HS-ST, offence of producing counterfeit goods.
- People’s Court of District 12, Hồ Chí Minh City: Judgment No. 67/2019/HSST, offence of producing and trading counterfeit goods.
- People’s Court of Hà Nội: Judgment No. 300/2017/HSST, offence of producing and trading counterfeit goods.
- National Assembly: Penal Code 2015, amended and supplemented in 2017.
- National Assembly: Law on Intellectual Property, consolidated text, amended and supplemented in 2009, 2019 and 2022.
This article is for reference. It analyses published judgments and does not replace legal advice on a specific case. Some parties’ names are abbreviated as in the published judgments. Prepared by the FC Legal legal team and reviewed by FC Legal’s managing lawyer.
