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Tuesday, 20 April 2010

Counterfeits: can the consumer also be the villain?

The IPKat, Merpel and Tufty have received an interesting and indeed provocative question from a reader who writes:

"Dear Feline Creatures

I am writing an article about the possible role of consumers in transactions involving counterfeit goods. In this context I have some ideas about a re-allocation of emphasis.
The theoretical point that I want to discuss is concerns the possibility of legal liability for consumers for purchasing counterfeit goods -- as a kind of contributory negligence; I refer to such consumers as potential “counterfeitees”.
Are you aware of any legislation or case-law, anywhere, proposing and/or imposing a legal liability on such a basis? Any known scholarly sources or comments on the topic would be very helpful too".
The Kats can't think offhand of any specific legislation, though they have to concede that consumers are often wilfully blind, or very negligent, in buying goods which, from the price, the context of the sale, the quality of the packaging or the demeanour of the seller, they might have good reason to suspect of being infringements.

If you have any ideas or comments, please post a comment below or email the Kats here.

18 comments:

shalini said...

With due respect, i disagree with Learned Jeremy in so far as his comment is concerned, i.e, "consumers are often wilfully blind, or very negligent, in buying goods which, from the price, the context of the sale, the quality of the packaging or the demeanour of the seller, they might have good reason to suspect of being infringements." i believe that quite often consumers dont mind buying counterfeits due to reason of financial prudence and they themselves are impressed at how gud a job the counterfeiters r doing to replicate the original.

Jakub Mencl said...

Dear Kats, I believe that Italy has a law prohibiting consumers to buy counterfeit products. Unfortunately, being Czech, not Italian lawyer, I don´t know any details. Best regards Jakub

Anonymous said...

Counterfeit goods probably involve copyright infringement as well as trade mark infringement. Might it be possible to argue that the consumer and manufacturer have entered into a common design to infringe?

Jeremy said...

Shalini: your observation does not contradict mine. The fact that some consumers are wilfully blind or negligent does not mean that other consumers are not delighted to buy fake products on account of their good quality or value for money!

David said...

Italy and France, apparently: http://news.sky.com/skynews/Home/UK-News/Designer-Fakes-Tourists-Told-Not-To-Buy-Counterfeit-Handbags-And-Clothing-Etc-Or-Risk-Hefty-Fines/Article/200908415366982?f=rss

It's my understanding that the owners of valuable brands, in certain major airports, hire agents to warn travellers that they may be prosecuted for travelling into certain countries with counterfeit items. I have not, however, seen any of these agents, and am merely relaying what I have been told.

David said...

And another article: http://www.nytimes.com/2006/01/13/business/worldbusiness/13iht-fake.html

Although, unfortunately, it doesn't mention any specific legislation.

Jeremy said...

Lee Curtis (Harrison Goddard Foote) has sent in this link to the position in Italy: http://www.italiantourism.com/regulat.html

Anonymous said...

During recent travel through French airports/train terminals I noticed they have signs warning of the financial penalties (in the range of 1000s of Euros) for apparently the mere act of wearing counterfeit sunglasses. Did not spot any agents working to grab people selling such products outside said train stations though.

Jeremy said...

Lindesay Low (Legal Adviser, Scotch Whisky Association)adds: "although lacking specifics, I attach links to two articles which indicate that under Italian and French law, consumers who buy counterfeit goods can be fined. A €3333 fine for buying fake sunglasses in Italy is pretty serious although it seems the French law allows for even larger fines

http://www.nytimes.com/2006/01/13/business/worldbusiness/13iht-fake.html

http://news.bbc.co.uk/1/hi/uk/8215519.stm ".

Sean said...

"how gud a job the counterfeiters r doing to replicate the original."

is this counterfeit english?

Niel Ackermann said...

I don't see how the consumer can possibly be using the mark "in the course of trade". While the examples of use in Section 10(4) of the Trade Marks are not comprehensive, they all relate to acts performed by traders, not their customers. Under Section 89 of the Trade Marks Act and 102 (1)(b) of the CDPA the prohibition on the importation of infringing goods also specifcally excludes any such goods being imported by a person "for his private and domestic use". If you can import counterfeit goods for your private and domestic use, I can see no reason why you can't buy counterfeit goods locally without the risk of criminal proceedings as well.

However, from a civil point of view, storing a counterfeit MP3 file on a hard disk or MP3 player is still a civil infringement under section 17(2) of the CDPA, however you acquire it or import it.

shalini said...

dear sean, this is queens english!!

Michael Edenborough QC said...

I believe that the purchaser of counterfeit goods in Italy are thereby committing a criminal offence. There was a photograph legend to this effect in one of the recent ITMA/ECTA/Marques newsletters (I can’t remember which) that I think showed Gillian Dees illustrating this point.
Also, in the UK, one has the criminal offence of knowingly receiving stolen goods.

Justin Watts said...

Legal mechanisms are there for rights owners who are willing to run an inevitable gauntlet:

1. sue for the consumer's common design with the seller to infringe copyright or trade marks.

2. prosecute the consumer for abetting or procuring/conspiring to commit an offence contrary to s109 CDPA or s92 TMA and s8 Accessories and Abettors Act 1861/s1 Criminal Law Act 1977.

3. conspiracy to defraud.
Most likely, it will all end in tears. So anyone following those steps should (a) brief public relations and (b) check their cv is up to date.

LK Albe said...

In most cases, it takes quite some gumption for a supplier to sue its present or future customer base!

Though, where the genuine articles are so exclusive that the genuine and counterfeit customer bases don't overlap, the "real" customer would probably appreciate some enforcement action against those "gud" copies running around.

Nikos Prentoulis said...

Under the Greek Penal Code, o knowingly accept in your ossession the products of a criminal offence (in this case of counterfeiting) is also a criminal offence. The "acceptance of products of crime"
is, in principle, ex officio prosecuted and the penalty can be up to five years of imprisonment. However, in the case of products of " very low value", the penalty
is maximum 6 months imprisonment and for the criminal prosecution to commence, the filing of a criminal complaint by the trade mark owner is obligatory. In practice, this sort of behaviour never attracts criminal
procedure.

Ruth Orchard said...

ACG is interested in criminal rather than civil liability for consumers such as is already the case in France and Italy, where consumers are fined if caught in possession of counterfeits (i.e. not negligence, but akin to purchase or possession of stolen goods).

We have of course lobbied on this but the government isn't keen to criminalise the consumer and also says it would be impossible to enforce. But we think it would certainly act as a deterrent.

We're not sure if trying to establish civil liability is really the point when counterfeiting is a serious organised crime?

William Earley said...

I also think in (bizarrely) China, purchasing counterfeit goods is an offence.

Quite apart from Ruth Orchard's sensible point, the practical difficulty I would see with this project is that it seems hard to envisage a situation where a true consumer, i.e. someone buying for personal use and not for resale, would ever be worth suing - unless we were talking about extremely valuable goods and/or dubiously large quantities. While the French or Italian police may not feel your collar too often for buying a fake Gucci bag, it at least has the benefit of a degree of deterrence. Also, does our original questioner actually mean "contributory negligence"?This would surely only arise as a defence to a suit by a consumer against the counterfeiter/seller? Such a case might have its moments: a very cheeky seller could have a stab at extending volenti non fit injuria - although might the doctrine of common purpose get in the way of the suit in the first place in cases of obvious fakes? More seriously, I am sure some will suggest that the ACTA proposal that custom officials would be allowed to seize suspected counterfeit items without a request from the rightsholder could be part of the answer - although seizing every Louis Vuitton bag en route from Bangkok might result in some animated discussions at airports. Perhaps not...

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