Three leading audio equipment brands including Shure, have scored a decisive victory against a network in China that were engaged in large-scale manufacture and export of counterfeit products, including amplifiers, headphones and microphones.
The case started in May 2022 when Rouse, working with its strategic partner law firm Lusheng, uncovered a network of nine companies in China, including trading, logistics and manufacturing companies across Guangdong Province, exporting counterfeit audio equipment to South East Asia. The network operated over eighty separate online stores on Shopee and Lazada supplying to customers in Vietnam, Thailand, Indonesia, Malaysia and Philippines. Although several audio brands were targeted by the counterfeiters, only three brand owners, Shure and two others engaged Rouse and Lusheng to launch a coordinated action.
Lusheng reported the case to the Guangdong Province Public Security Bureau (PSB) who coordinated local PSB units to conduct simultaneous raids against all the targets. As well as seizing counterfeit products on site at several locations, the PSB investigated the trading company at the heart of the network and, through careful digital forensics, uncovered records showing more than US$3 million in sales of counterfeit products of various international brands.
The case concluded in December 2024 with seven suspects handed custodial sentences ranging from two to four and a half years and fines totalling US$1.1million. To address their civil liability, Lusheng concluded settlement agreements with the suspects for considerable compensation.
Chris Bailey, now Head of UK & EU Enforcement for Rouse, who led the case in his previous role in China, said, “This is a very gratifying outcome, both for the criminal sanctions and the civil recovery, which returns much more to our clients than the case cost them. It demonstrates the professionalism of China’s PSB in analysing digital evidence from online sales. And shows the value of attacking networks rather than individual parts of the chain: what appeared to be eighty retailers in five countries were actually different outlets of the same organisation. Instead of scattered online takedowns at the local level, the brand owners have uprooted the source”.
