18th December 2024 – (Hong Kong) Hong Kong Customs recently received a tip-off from a citizen regarding a chain group suspected of selling counterfeit speakers and wireless headphones. Following an investigation and assistance from the trademark holders, Customs officials conducted a surprise search at 8 branches of the group located across various areas in Hong Kong on the 17th, as well as a warehouse unit in Kowloon used for storage, seizing around 1,300 suspected counterfeit items with an estimated market value of approximately HK$1.4 million. Four men aged between 44 and 54, including 2 company directors and 2 branch managers, were arrested on suspicion of violating the “Trade Descriptions Ordinance.”
Mr. Chau Hoi-man, Senior Inspector of the Intellectual Property General Investigation Unit 3 at Hong Kong Customs, noted that during the operation, Customs observed two distinctive features in the operation of the involved businesses. Firstly, the businesses in question would promote themselves under the guise of “parallel imports.” The suspected counterfeit items seized this time were priced between HK$700 and HK$3,200, roughly 40% to 70% of the regular prices. Additionally, these businesses would mislead customers by claiming that the products were parallel imports from overseas (commonly known as “grey imports”) at prices lower than genuine products, attempting to deceive consumers by passing off fakes as grey imports.
Secondly, Mr. Chau highlighted that the suspected counterfeit speakers and wireless headphones seized this time replicated the appearance design and registered trademarks of genuine products, exhibiting a high level of simulation that made them difficult to distinguish from authentic products. However, upon closer inspection, some subtle differences between counterfeit goods and genuine products could still be observed. For instance, the packaging of genuine products is exquisitely printed with clearer images and brighter colours. Furthermore, the genuine speakers feature a distinctive gold logo on the front, whereas the quality of the logo on the counterfeit products is inferior, with rougher edge cuts or surface finishes. The source of these counterfeit goods is still under investigation.
Hong Kong Customs indicated that all four arrested individuals have been granted bail pending further investigation, which is ongoing, and more arrests are not ruled out. It is understood that the implicated group operates 8 physical stores in various areas across Hong Kong, and whether the merchants were aware of the situation remains to be investigated. The high level of simulation of the counterfeit speakers makes it challenging to distinguish their sound quality and effects. The quality of counterfeit products cannot be guaranteed, and consumers should be cautious when the prices are significantly lower than the market price.
With the festive season approaching, Hong Kong Customs will continue to enhance inspections and enforcement actions to crack down on various unlicensed activities. Customs advises consumers to shop at reputable stores. In case of suspicion, consumers should consult the trademark holders or their agents. Businesses must also exercise caution when purchasing goods, as selling counterfeit products constitutes a serious offence that carries criminal liability.
Under the “Trade Descriptions Ordinance,” selling or possessing counterfeit goods for sale purposes is illegal. Upon conviction, individuals can face a maximum fine of HK$500,000 and imprisonment for up to 5 years.
