Oh, Mr Chinese Official, you're really spoiling us, says Ferrero Rocher

It was the kitsch TV ad that spawned countless parodies. The badly dubbed Italian commercial for Ferrero Rocher chocolates, which saw an ambassador's butler passing around a perfect pyramid of the gold-wrapped chocolates at a swish reception, so imprinted itself on the British public's consciousness that in May it was voted the UK's third most popular TV ad of all time.

But next month, Beijing's Supreme Court will decide whether government receptions in China will be "noted in society for their host's exquisite taste" or for brazen brand piracy.

Tresor Dore, a popular Chinese brand of chocolates wrapped in gold-coloured paper and presented in the same heart-shaped box as Ferrero Rocher's confectionery, is commonly handed out at government functions. Now the company that makes it stands accused of stealing the Italian firm's packaging.

Ferrero Rocher's demand for Tresor Dore's products to be removed from the shelves of China's supermarkets, as well as its claim of £45,818 in damages, is the latest test of China's will to crack down on rampant brand piracy and intellectual property rights (IPR) violations. The timing of the Supreme Court's judgment is crucial: 18 February is the start of the Chinese New Year holiday when chocolate sales traditionally boom. Gold-wrapped confectionery is particularly popular because gold is associated with prosperity.

Ferrero lost its initial claim against Montresor, the company that produces Tresor Dore chocolates, after the local court which heard the case said Tresor Dore was better known in China. The subsequent appeal went Ferrero's way.

The Supreme Court's ruling will determine whether it will still be a case of, "Buzhang [minister], with these Tresor Dore you're really spoiling us" at Chinese government receptions.

The omens are mixed. Under enormous pressure from the US, which claims that brand piracy and IPR violations in China costs American companies $250bn (£128bn) a year, China's State Council published an action plan in April designed to improve IPR enforcement over the next two years. But China is still believed to be the source of 70 per cent of the world's pirated goods.

Chinese courts are becoming more willing to back foreign companies' claims against domestic enterprises. In December 2005, the French cognac maker Hennessy won its case against two Chinese companies that sold "French Cognac Brandy" under the name "Hanlissy".

But blatant brand piracy continues to be a problem. At the Beijing Auto Show last month, Fiat executives were dumbfounded by the sight of the latest car from China's Great Wall Motors. Their "Peri" vehicle is almost identical to the Fiat Panda.

Piracy is also a growing problem for Chinese companies, with popular makes of alcohol and cigarettes frequent targets. According to government statistics, 90 per cent of all IPR cases heard in the Chinese courts involve domestic companies suing each other.