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Successful Criminal Raids Against Chinese Distributors of Counterfeit Guitars

Faced with increasing reports and complaints by musicians and music stores about the proliferation of counterfeit guitars bearing their brands, four of the best known names in the musical instrument business, Fender, Gretsch, Ibanez and Paul Reed Smith, joined forces in March 2008 to form the Electric Guitar Anti-Counterfeiting Coalition (EGACC) in order to petition government authorities to enforce their intellectual property laws against counterfeiting.

Complaints were lodged with the PSB in Beijing regarding the activities of two Chinese companies operating as musoland.com.cn www and paylessguitar.com.cn. The two companies were believed to be distributors engaged in the distribution and sale of counterfeit guitars through several websites targeting overseas consumers, and the four members of the EGACC had all received numerous complaints about the sites from both musical instrument retail stores and consumers, many of whom had been on the receiving end of acquiring instruments that turned out to be counterfeits.

The four guitar manufacturers working with the international intellectual-property and antitrust law firm, Baker and McKenzie, petitioned the Chinese enforcement authorities for law enforcement assistance. Following several months of intensive investigations, the Xuanwu District Public Security Bureau (PSB) in Beijing, China, launched simultaneous raids on November 26, 2008, against the warehouse and retail operations of both Musoland and Paylessguitar in Beijing.

During the operation, the PSB seized over 1,200 counterfeit guitars and other musical instruments not only bearing all four EGACC group member brands but also those of several other famous electric guitar makers. A number of individuals including the owners of these businesses were detained by the PSB during the raids. The EGACC is cooperating with the PSB and prosecutors in their follow-up investigations and prosecution. Should the prosecutions prove successful, those convicted could face substantial fines and jail time.

A spokesperson for Baker & McKenzie, stated: “This is just the first of actions that will send a strong signal to manufacturers, suppliers, distributors and web sellers - that dealing in counterfeit guitars and counterfeit guitar products will simply not be tolerated by government authorities or the brand owners. Strong action will be taken to protect the group members’ lawful rights and the rights and interests of consumers of all of the affected brands. The EGACC group members are grateful for the cooperation of the PSB, and of other PRC enforcement authorities, including the Xuanwu Administration for Industry & Commerce, for pursuing these law enforcement actions. The EGACC group members look forward to working closely with these and other government enforcement authorities on this and future actions in the PRC and elsewhere.”

Contact: Darrell Prescott, Baker & McKenzie LLP

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