The Trade Marks Act 1994 (as amended) (‘the Act‘) is the legislation in England and Wales governing unauthorised use of a registered trade mark. Typically, intellectual property infringements are enforced under a civil infringement action by the rights holder. However, if there is sufficient evidence to suggest illicit activity, there is also scope for criminal prosecution under the Act for a range of trade mark offences. These acts are typically the unauthorised use of trade marks with a view to gain for the offender, or with intent to cause loss to another.
The offences sections of the Act require criminal investigation by authorities, and prosecution by the Crown Prosecution Service (‘CPS‘) before the judiciary. The Sentencing Council has always produced guidelines for sentencing to be used by the judiciary and criminal justice professionals, whilst simultaneously aiming to increase public understanding of sentencing. However, until recently, guidance for criminal trade mark offences was notably scant.
In October 2021, and for the first time, the Sentencing Council published detailed guidelines for sentencing criminal trade mark offences under the Act. These guidelines should be welcomed by rights holders, particularly those having to deal with black market, counterfeit goods.
The new guidelines are more comprehensive than the former brief, with significant changes in the way in which harm caused by the offender is assessed. The new guidelines refer explicitly to the retail value of equivalent genuine goods sold, as well as consideration for the harm caused by selling the counterfeit goods. This harm can apply to both the trade mark owner, as well as the purchasers and end users of the goods in question.
The intention is to allow for harsher sentences where consumer safety is a concern, which effectively codifies the way in which the criminal justice system already focuses their investigations. There is a distinct focus on high economic impact crimes, in a banding system which is now recognisable to criminal prosecutors and comparable to existing guidelines for other economic crimes.
Guidelines are available for assessing both individuals and organisations committing offences. On an individual level, an assessment of the culpability of the individual is undertaken to weigh up and determine the offender’s role and the extent to which the offending was planned and the sophistication of such planning. Considerations are then given to the monetary value of the offence, and the potential for harm caused (for example, if the consumer is more likely to be harmed by a dangerous counterfeit product). Various other statutory considerations are taken into account in line with the Sentencing Code such as guilty pleas or aggravating factors. The offence range is anywhere from discharge to seven years’ custody as a starting point, with aggravating factors pushing maximum sentences to ten years. Organisations face a similar assessment, albeit with a focus on punitive fines for the organisation in question, with no upper limit given.
What does this mean for rights holders?
This is excellent news for rights holders. The Sentencing Council have finally provided clear guidance for both magistrates and Crown Courts, for a criminal offence which is often unfamiliar to those handing down sentences and incorrectly perceived by the public as a victimless crime. The scope now available under the guidelines further reflects the large commercial scale and nature of counterfeiting, which can be a widespread and highly organised activity. The first port of call for a rights holder will likely always be a civil action, but there is now clearly defined scope for the criminal justice system to address those activities which stray into criminal territory. Decisions should soon start to trickle through to indicate the willingness of the judiciary to punish trade mark offences.
If you have any questions about anti-counterfeiting or you wish to discuss this law update, please contact Rachel Harrison, Ben Scarfield or your usual Kilburn & Strode advisor.