IP Litigation & Enforcement: Scotch whisky body says counterfeits moving ‘closer to home’

A legal adviser to the organisation that protects Scotch whisky has told an industry event that while China was previously a hub for counterfeits, the problem has now moved “closer to home” and infringements are more common on European shores.

Lindesay Low, who advises Scotland’s Scotch Whisky Association, said that in the last ten years the organisation, which is tasked with protecting Scotch whisky around the world, has noticed more examples of infringements in “high market” European countries.

Low was speaking at the  IP Litigation & Enforcement conference, taking place in London today, July 2.

He pointed to France, Italy and Spain as specific examples of where counterfeiting is common. All of those countries, he said, are among the highest for Scotch whisky consumption worldwide.

“When you have mature markets and a strong demand it has in turn created a demand for cheap substitutes,” Low told delegates.

But instead of obvious cases of trademark infringement, such as the Scotch whisky name being used on packaging, Low said counterfeiters are instead alluding to Scottish references and using “indirect indications of origin”.

Low then showed delegates an example from Italy of a can of whisky being sold called Scottish Swordsman.

The drink’s packaging made no direct reference to Scotch whisky but included imagery in its logo of a man dressed in traditional Scottish clothes with two swords below him.

“There is no doubt the intention is to dupe consumers,” Low said.

It is important to monitor for infringements because Scotch whisky has geographical indication (GI) status, said Low.

A GI illustrates that a product comes from a certain area and is made in a specific way with strict rules about production.

To be classed as Scotch whisky, the drink must have been brewed in one of 110 distilleries in Scotland, must contain at least 40% alcohol, and must be aged for a minimum of three years.

These demanding requirements can “leave the door open” for counterfeiters to create fake versions quickly, Low said.

Although Europe has presented problems recently, historically the association has been forced to monitor counterfeiting in China.

Low said exports of Scotch whisky to China grew from 1 million in 1999 to 100 million by 2012.

The problem of counterfeiting, Low said, began between 2005 and 2006.

Low said that working with China’s State Administration for Industry and Commerce (SAIC), as well as the association’s decision to register concurrent trademarks for ‘Scotch Whisky’, one in English and one in Chinese characters, have been useful.

He spoke of one operation where a factory in northern China was found to have been producing enough bottles and caps to create 100,000 counterfeit products.

Low added that the SAIC is keen to show that it is proactive in tackling counterfeits and has held public “destructions” of counterfeit goods.

He concluded his talk by saying that the number of investigations in China are “at a fraction” of the levels seen ten years ago.

The IP Litigation & Enforcement conference runs from July 2 to 3.