June 16, 2025
Overview of Judicial Precedents on Recycled BottlesIn the spirits industry, counterfeiters are refilling recycled bottles with fake liquor. These bottles, originally authentic, are acquired through the black market. Confiscating such bottles disrupts the counterfeit supply chain, raising the question of whether seizing genuine recycled bottles is legally feasible. We aim to look into the precedents in order to understand the potential judicial stances on the seizureof recycled bottles for potential criminal proceedings.
Notwithstanding gradual progress in judicial transparency in China, the accessibility of judicial documents, including civil and criminal judgments, remains limited. Publicly retrievable cases reveal notable patterns in trademark infringement involving recycled bottles.
For instance, several prominent civil judgments address the reuse of recycled beer bottles by rival breweries to package and sell their own products, defining the lines between trademark infringement and justified use of recycled beer bottles. In contrast, criminal cases related to counterfeit spirits (e.g., fake baijiu or liquors) are sparser in public records, with brief summaries indicating harsher penalties, such as imprisonment and fines, aligned with China’s stricter anti-counterfeiting lawsfor consumer safety and public health risks.
Taking the famous civil caserelated to the reuse of recycled “Budweiser” beer bottles by Heimen Beer as an example, the Supreme Court of China outlined two key criteria for determining trademark infringement:
· Whether the original brand identifierson recycled bottles were sufficiently obscured to prevent confusion about product origin or misidentification by the consumers (in other words whether the original brand name / logo on the bottle constitutes use of trademark), and
· Whether the defendant acted withmalicious intent to free-ride on the established brand’s reputation.
These criteria have been consistently applied in subsequent cases.
On the other side, prosecuting criminal offenses involving the use of recycled bottles in counterfeit alcohol production or distribution requires law enforcement agencies to establish a comprehensive evidentiary chain based on the information gathered for criminal cases related to counterfeit alcohol and our practical experience. This chain shall demonstrate that the recycled bottles were utilized to manufacture orsell counterfeit products.
We have observed the key evidentiary considerations, including without being limited to:
. Fake Liquor: whether counterfeit liquor to be used for producing counterfeit alcohol or counterfeit products (e.g., partly or fully filled), were identified at the scene.
. Dry goods: whether packaging materials (e.g., fake labels, caps) are found alongside recycled bottles on the spot.
. Scale and complexity: the presence of multi-brand counterfeit operations (e.g., recycled bottles from various brands repurposed for imitation products) or tools specifically designed for counterfeiting (e.g., bottling machines, labeling equipment).
. Transactional records: evidence of upstream/downstream activities, such as purchase orders for recycled bottles, sales ledgers, or digital traces (e.g., chat logs) linking suspects to the production or distribution network.
For instance, the absence of counterfeit liquid or packaging might weaken claims of intentional misuse,while the discovery of fully assembled counterfeit products with recycledbottles could directly substantiate criminal intent. Courts often scrutinize whether the totality of evidence (physical, documentary, and testimonial) aligns to prove that the recycled bottles were integral to the counterfeit scheme.
The evidentiary threshold for seizure may be lower than the requirements for criminal prosecution. Authorities may initiate seizures based on preliminary findings (e.g., possession of recycled bottles suspected for counterfeiting), but such actions do not necessarily lead to criminal proceedings. If subsequent investigations fail to meet the higher evidentiary standards for criminal offenses, the case may be resolved through administrative penalties rather than criminal charges.
In practice, market supervision and administration (MSA) also plays a critical role in combating counterfeit products through administrative enforcement to uphold market order. Their authority includes conducting surprise inspections and seizures based on reported suspicions. If evidence suggests criminal liability, the MSA will transfer the case to the police and prosecutors for further handling. Otherwise, the MSA may independently decide whether to impose administrative penalties.
Undercurrent legal frameworks, there are no limits restricting brands, their agents, or third parties (e.g., consumers) from reporting suspected counterfeit goods to law enforcement authorities (mainly the police and the MSA). Law enforcement authorities retain full discretion to determine whether to initiate raid operations and whether to seize any items discovered on the spot. Brands or their agents will be able to assist in such raid operations, including verifying whether seized items infringe intellectual property rights at there quest of authorities and issuing written reports accordingly.
In principle, there is no inherent legal risk for brands or their agents insubmitting complaints or verification reports to law enforcement authorities. However, potential liabilities may arise in the following two scenarios:
· Malicious False Reporting: liability could result if a brand or its agents file complaints without prima facie evidence, constituting bad-faith accusations.
· Gross Negligent Actions: repeated enforcement requests lacking proper due diligence, followed by unsuccessful outcomes, may expose brands to claims for operational disruptions or reputational damages suffered by investigated parties.
To mitigate risks and maintain proactive IP protection, brands and their agents are advised to adopt a more systematic protocol:
· Pre-Reporting Due Diligence: analyze and verify leads before reporting to the authorities.
· Post-Action Compliance Management: monitor case progress to promptly address administrative or judicial requirements by setting up one-stop coordination throughout the raid operations and the legal proceedings.
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