Trade in counterfeit goods: Sanctions facing perpetrators, and the rights of injured trademark holders
Trading in counterfeit goods is not just an economic problem, but is first and foremost a crime that victimises honest businesses, undermining principles of fair competition and trust of consumers built up over years. It is important to be aware of the consequences facing perpetrators of these offences, and how an injured company can effectively protect its brand.
Perpetrators’ criminal liability
Trading in counterfeit goods is a criminal offence punishable under Polish law by a fine, probation, or up to two years in prison. When this illegal trade is the perpetrator’s main source of income, or involves goods of significant value, the penalty can range from six months to five years in prison.
(For simplicity, in this article we refer to trading in “counterfeit goods.” The Industrial Property Law refers to trading in goods bearing a counterfeit trademark (registered trademark or EU trademark) or unauthorised use of someone else’s trademark.)
Even harsher sanctions can be applied for counterfeiting products of great importance for health or safety. For trading in counterfeit pharmaceutical products, plant protection products, or chemical substances, criminal liability can be even higher, as industry regulations can also be applied alongside trademark regulations.
What sentences are imposed in practice?
In Poland, in cases of this type the most common sanctions ordered by the courts are a fine or a suspended prison sentence. Outright prison sentences are rarely imposed. This is likely to occur in the case of repeat offenders or cases involving organised criminal groups.
Apart from these sanctions, the courts also order the forfeiture of the offending counterfeit good. This means that the counterfeits become the property of the State Treasury, and are then usually destroyed. This solution is of great practical importance, as it eliminates from the market products that could continue to mislead customers and further injure the reputation of the brand.
In a few instances the courts also order the payment of restitution for the ill-gotten gains from illegal sales. This sanction is not universally applied, as it requires a precise determination of the amount of unlawful gain. Victims are rarely able to secure evidence on this issue, but when the evidence is found significant amounts of restitution can be ordered. In one case involving trade in counterfeit apparel and cosmetics, the court ordered two perpetrators to turn over the proceeds from their crimes in the amount of PLN 450,000.
Forfeiture of the instruments used in committing the offence may also be ordered—such as vehicles or machinery used for manufacturing or transporting the counterfeit goods. This can also be a heavy sanction for perpetrators, depriving them of the means for continuing their unlawful activity and realistically limiting their ability to re-offend.
There are isolated instances where the courts order publication of the judgment. The courts justify this sanction by the social harmfulness of the act and the preventive effect of the sanction, showing that infringement of intellectual property rights will be met with real consequences.
More and more often the courts resort to sanctions intended to directly benefit the injured party. One such sanction is a form of restitution (nawiązka)—a lump-sum payment to the business injured by the perpetrator’s actions. This is a practical solution when it is hard or impossible to estimate the exact amount of the loss to be made up by the perpetrator.
The injured party’s appearance in the proceedings
For the injured party (in practice, the proprietor of the trademark) to participate actively in the criminal proceeding, it must file a declaration to appear as an auxiliary accuser (oskarżyciel posiłkowy). With this status, the victim becomes a party, allowing it to take such steps as applying for admission of evidence, participating in the hearings, and appealing unfavourable rulings.
This declaration must be filed at the appropriate stage in the proceedings, i.e. up until the indictment is read out (thus initiating the trial procedure). After that point, it is no longer possible to seek active participation in the trial. This makes it essential to closely monitor the course of the proceedings.
Direction of changes in the European Union
Generally, the sanctions imposed under Polish law for these offences fall within the range of European standards. However, the effectiveness of these regulations remains the subject of interest on the part of EU institutions. The European Commission has also identified the adequacy of the criminal response to intellectual property offences as a problem that needs to be addressed.
Recommendations were issued in March 2024 calling on the EU member states to consider stiffening their criminal sanctions for the most serious forms of counterfeiting and piracy, particularly when committed by organised criminal groups.
Summary
Effectively combating the trade in counterfeit goods requires more than simply uncovering the trade. It also requires the right litigation strategy. To effectively protect their interests, trademark holders must identify solid evidence: documentation showing the scale of the infringement, the amount of losses, and the perpetrators’ modus operandi. The better documented the case is, the better the chance of obtaining a satisfactory verdict.
Judgments issued in cases of trading in counterfeit goods are vital for shaping the standards for enforcing the law and building the society’s legal awareness. An active approach by injured parties in the criminal proceedings means more than just protecting their own brands, but also makes a real contribution to a safe and honest market. It sends a clear signal that infringers of IP rights will face consequences. The response by law enforcement and the courts then becomes visible and effective, while also leading to a real reduction in counterfeiting, reinforcing trust in the legal system and protection of the legitimate market.
In addition to protection under criminal law, trademark holders can also pursue their rights in civil proceedings, a separate and independent path of protection.
Ewa Górnisiewicz-Kaczor, adwokat, Intellectual Property practice, Wardyński & Partners
