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Intellectual Property Prosecution

What is an Intellectual Property crime?

Intellectual property crime is the unauthorised use of an owner’s intellectual property (a right established by copyright, design, patent or trademark) through the manufacture, sale or distribution of pirated or counterfeited goods for commercial gain.

What are counterfeit goods?

The majority of counterfeit goods have their origins on China, and the widespread use of the internet has created a burgeoning marketplace for a counterfeiter. Examples include the forgery of digital media, luxury clothing and electrical items. Counterfeiting typically involves the willing infringement of trademark rights.

What is piracy?

Piracy involves the unauthorised copying of an owner’s original for commercial gain. Online piracy involves the distribution of pirated films, games, music and streamed live sports matches amongst other examples.

The Law on Intellectual Property offences

The legislation relied upon for private prosecutions of intellectual property crimes will vary depending on the nature of the offence. The Private Prosecution Service’s Intellectual Property unit are experts in ascertaining in interpreting and applying the legislation required for a successful prosecution which can include:

Protection of Trademarks

The owner of a trademark that has been counterfeited and/or used in an authorised way has their rights protected by the Trade Marks Act 1994. A person can be privately prosecuted if they:

  • Apply to/sell/have in their control goods or packaging with a sign identical or likely to be mistaken for a registered trademark (section 92 (1) Trade Marks Act 1994). The Supreme Court decision in R v M,C & T [2017] UKSC 58 confirmed that it is a criminal offence to sell “grey goods” (goods traded through legal distribution channels but unintended by the original manufacturer or trade mark proprietor) pursuant to section 92(1) Trade Marks Act 1994.
  • Make an article specifically designed to make copies of signs identical or likely to be mistaken for a registered trademark (section 92(2) Trade Marks Act 1994).

If a private prosecution of a trade mark infringement is successful, the offence carries a penalty of up to 10 years imprisonment for selling goods which are likely to be mistaken for the genuine branded products.

Protection of Copyright

The Copyright, Designs and Patents Act 1988 provides for a range of criminal liabilities which can be enforced through the private prosecution route, for example, a person can be privately prosecuted if they:

  • Make for sale or hire articles without the licence of the copyright owner (section 1 Copyright, Designs and Patents Act 1988)
  • Make or deal with recordings obtained illicitly

If a private prosecution of a copyright violation is successful, the offence carries a penalty of up to 10 years imprisonment.

Protection of Registered Designs

A person will be guilty of registered design infringement pursuant to the Intellectual Property Act 2014 if in the course of business they intentionally copy a registered design so as to make the product exactly to that design or differ in only immaterial details from that design (section 1 Intellectual Property Act 1994).

Why pursue a private prosecution for an intellectual property offence?

When it comes to the protection of intellectual property rights, typically rights holders seek recourse in the civil jurisdiction. It is understandable that corporations are comfortable with enforcing their IP rights in the civil system and there is little understanding on how effective the criminal system can be. However, the number of chargeable offences (see above) is wide ranging, and as such a private prosecution allows a rights holder to seek justice for behaviour that is criminal in nature, which may not be adequately punished by the civil courts.

Trading Standards prosecute the most serious IP infringement cases. However, cuts to their budget has necessarily meant that Trading Standards has neither the capacity nor resources to adequately investigate and prosecute every worthwhile IP case. Therefore, it is becoming more practical for IP rights holders to seek justice in the criminal process even though the burden of proof is higher than in civil proceedings.

Who can bring a private prosecution for an intellectual property offence?

Intellectual property rights have been protected by trading bodies such as FACT (The Federation Against Copyright Theft) utilising private prosecutions to seek justice from trademark infringers. Trading bodies often use private prosecutions to prosecute those who set up illegal streaming websites, illicit streaming devices and institutions that broadcast sports games illegally.

Moreover, a private prosecution can be brought by individuals and companies by virtue of the Prosecution of Offences Act 1985.

It is important to note that private prosecutions should not be utilised as a vehicle to force a settlement in civil proceedings and a prosecution should only be considered if there is a case to be made that the intellectual property fraudster demonstrate elements of criminality.

What are the benefits of a private prosecution for intellectual property offences?

IP rights holders consider starting a private prosecution for a number of reasons, for example:

  • to deter future criminal conduct by the rights infringer;
  • to ensure that all counterfeit items are destroyed and forfeited;
  • to send a clear message to potential rights infringer that a company that has had their IP rights infringed will take strong action;
  • provides the IP rights holder with control over the way it chooses to run the case and use the resources at its disposal;
  • as a necessary tool when Trading Standards are unwilling to act;
  • potential compensation for the victim;
  • to establish a precedent for future conduct;
  • the IP rights holder has the ability to bring a prosecution against anyone involved in a criminal enterprise;
  • custodial penalties of up to 10 years for IP rights infringers;
  • to protect society; and
  • a private prosecutor can access specialist expertise which many public prosecuting authorities cannot utilise, which can increase the chances of prosecution.

A successful private prosecution can potentially have a great deterrent effect due to the possible sentence imposed on the criminal. As well as a prison sentence, offenders risk a “lifestyle” offence pursuant to Proceeds of Crime Act 2002, which means that all of the wrongdoers’ income from the six years prior to the conviction is assumed to have been acquired illegally and subject to confiscation by HMRC following a confiscation order, unless the defendant can discharge this assumption. The deterrent effect of a private prosecution is therefore much stronger than a judgment in civil proceedings would be.

In addition, the criminal courts can impose more stringent sentences on an IP rights infringer than a civil court. For example, a criminal court can impose a custodial sentence, a compensation order and/or a confiscation order to deprive an infringer of the benefit they have unlawfully garnered from the offence committed.

What are the costs benefits of a private prosecution for intellectual property offences?

A private prosecution is potentially a cheaper means to protect IP rights (and could result in a full recovery of costs) than redress through the civil system. A private prosecutor can potentially recover the costs expended in investigating and prosecuting from the state, provided that the prosecution was not brought maliciously and was brought in good faith.

A private prosecutor can also receive compensation as a court has the authority to make a Compensation or Confiscation Order which can lead to more compensation for the IP rights holder than any offer obtained from civil redress.

The Private Prosecution Service can help you protect your intellectual property rights

Unlike the police, CPS or Trading Standards the Private Prosecution Service’s intellectual property unit offers both technical expertise and capacity to help you with your prosecution against copyright and trademark infringers. In addition-you-the victim- retain full control of the criminal proceedings instead of relying on the state to represent your best interests. The Private Prosecution Service are skilled at advising on and targeting the evidence required to establish potential criminality. The government has passed a plethora of legislation to enable the owners of intellectual property to protect their rights, however, the decision to bring criminal proceedings is an important one, which should be made after consulting the Private Prosecution Service as soon as possible.

A private prosecution could be a cheaper, more profitable and clinical means for an IP rights holder to get justice outside of civil proceedings.

Call the Private Prosecution Service today on 02071830529 or email contact@privateprosecutionservice.co.uk.