Luxury goods firm LVMH has reportedly won a lawsuit against fellow French business Carrefour, which it accused of selling fake handbags in China.
China accounts for an estimated 70% of counterfeit goods worldwide
According to media reports, a Beijing court has ordered Carrefour to pay $375,000 (£210,000) in damages to LVMH for violating its trandemark rights.
Carrefour was alleged to have sold LVMH branded handbags for $6 when the real thing can be worth more than $880.
The case was one of the first trademark suits between foreign firms in China.
China has pledged to crack down on widespread counterfeiting and piracy.
Commitment to action
President Hu Jintao used a meeting with Microsoft founder Bill Gates on Tuesday to emphasise his country's commitment to protecting intellectual property rights in China and to penalise violations.
A rash of cases involving alleged counterfeiting of luxury goods have come before Chinese courts in recent weeks.
LVMH has already won two counterfeiting cases
LVMH was awarded $18,700 in damages on Tuesday after a Beijing retailer was found guilty of failing to prevent fake handbags being sold in market stalls on its premises.
In another case, one of Beijing's most popular tourist markets was found to have violated the rights of LVMH and four other foreign fashion labels by selling branded goods without approval.
The owner of the Xiushui Market has vowed to fight the verdict, arguing that foreign shoppers have encouraged counterfeiters by buying luxury goods at rock-bottom prices.
According to media reports, LVMH sought $74,000 in damages from Carrefour, one of China's largest foreign retailers.
However, neither company have commented on the case.
The Chinese authorities have held up a 20% increase in intellectual property lawsuits over the past year as evidence that they are taking the problem of counterfeiting seriously.
However, less than 5% of these cases involved foreign companies, leading experts to question how much progress is being made.