Unauthorized selling of “grey goods” is a criminal offence, says Supreme Court

English law has long enabled registered trade mark owners to bring criminal prosecutions against anyone trading in fake or “counterfeit” goods, but in a recent ruling, the Supreme Court has now confirmed that the criminal provisions of the Trade Marks Act enables such prosecutions in relation to grey goods, ie. goods originally produced with the brand owner’s consent but then sold without their consent.

The ruling came about following an interlocutory appeal in ongoing criminal proceedings in which the Supreme Court was asked to consider whether the criminal provisions of the UK Trade Marks Act 1994 distinguish between counterfeit goods and grey goods.

The relevant criminal provisions are as follows:

“A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor- (a) applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or (b) sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears such a sign, or (c) has in his possession, custody or control in the course of a business any such goods with a view to the doing of anything, by himself or another, which would be an offence under paragraph (b).”

In the particular criminal proceedings, the defendants are alleged to be involved in the importation and sale of fashion clothing and footwear bearing the trade marks of Ralph Lauren, Adidas, Under Armour, Jack Wills, Fred Perry and others. Some are fake, but others are the original branded products, which were being sold in the UK by the defendants without the consent of the trade mark owners.

As part of their appeal, the defendants were attempting to argue that it is only fake goods which would be caught by the criminal provisions, ie. those goods to which 3rd parties have applied signs likely to be mistaken for the registered trade marks, but the Supreme Court ruled that the trading in grey goods, ie. trading in goods bearing the registered trade mark but crucially without the consent of the proprietor, would be equally in breach of the criminal provisions.

The related criminal trial continues, and meanwhile we suggest that trade mark owners regularly review their quality control measures, production controls and return goods policy with their authorised manufacturers and agents, to maximise pre-emptive measures against unauthorised trade in grey goods.[:]

Posted on: 1st September 2017