Protecting IP rights through criminal actions: insights from a recent court ruling

• In a recent case, counterfeit goods were released and the prosecutor ordered to close the investigation 
• An expert was asked to assess the infringing goods pursuant to the principle of evidentiary freedom
• Based on the expert’s report, the judge rejected the prosecutor’s request to close the case

Background 

In August 2021 a reform to the Criminal Law corrected several errors which, in practice, made it impossible to prosecute and sanction IP crimes. The minimum appraisal of seized goods was reformed (except for foreign trade cases) and a penalty of imprisonment (of up to one year) was reintroduced.

The reform also clarified several aspects to be considered in a crime (eg, the appraisal of the goods based on the price of the genuine goods and the possibility of reaching an agreement between the parties), which put an end to litigations.

Recent court ruling

In practice, although these provisions are regulated by law, certain prosecutors and judges have unfortunately not proceeded as expected. For example, in a recent case, an infringer appeared before a judge of constitutional guarantees, arguing a violation of the principle of legal certainty due to an alleged late notification by Customs, which resulted in the release of the counterfeit goods. The prosecutor hearing the case ordered that the investigation be closed, arguing that, with the release of the goods, there was no crime to prosecute.

IP crimes should be prosecuted following the criminal justice principles established in the Criminal Law. One of these principles is that of “evidentiary freedom”, which allows the parties to provide elements that may be considered as evidence, which will be subsequently assessed as to their relevance and usefulness. In other words, based on this principle, a wide range of opportunities are open to lawyers to prove that a crime has been committed – in this case, an IP crime.

Based on the principle of evidentiary freedom, an expert was requested to assess the infringing goods based on the documents and pictures in the official records. The expert’s assessment concluded that the released goods were counterfeit, which proved that a crime had been committed and should therefore be investigated.

The expert’s report was submitted to the judge, who reviewed all the documentation submitted, and rejected the prosecutor’s request to close the case. The judge also ordered that the case be brought to the attention of a higher authority within the Attorney General’s Office, stating that the investigation of a possible crime should be prioritised. 

A new prosecutor must now be appointed so that the investigation may continue and sanctions may be imposed (including a term of imprisonment of up to one year and a fine of up to $138,000).

Comment

This court ruling is important as it shows that, despite limitations in training, a lack of specialised IP knowledge and the abuse of constitutional actions, it is possible to obtain an adequate outcome by submitting documents demonstrating the mistakes made by the authorities, and by providing the judges with tools to support their decisions. 

The protection of IP rights can be achieved by using all the available mechanisms and principles established by the Criminal Law for all types of crime, as IP crimes cannot be considered as minor crimes.