A counterfeit with a typo – is it really a counterfeit?
In order to bring the perpetrator to criminal liability for trade in counterfeits, it is first necessary to determine whether the traded goods are counterfeited, i.e. whether they bear a counterfeit trademark. Can we speak about a counterfeit trademark only if it is identical to a registered trademark? Well, no. A counterfeit trademark may also be a mark slightly different from the registered one, i.e. a mark that is confusingly similar.
The situation on the market
The Polish market for counterfeit perfumes is dynamic. For many years, counterfeit perfumes were available on the market in traditional volumes – such as we see on the shelves of renowned perfumeries. Poland was perceived mainly as a transit country and also as a market for counterfeit perfumes and cosmetics imported mainly from China and Turkey.
Statistics of the Ministry of Finance show that the number of counterfeit cosmetics originating from outside the EU and detained at the border has been falling from one year to the next. In 2014, that number was close to 140,000 units, in 2015 – over 15,000 units, and in 2016 – over 8,000 units. This does not mean, however, that the number of fake cosmetics present on the market is falling. Poland is unfortunately becoming an important producer of counterfeits. Until recently, counterfeit products made in Poland were mainly detergents, washing liquids and creams. Their place has been taken by perfumes.
At the turn of 2016 and 2017, the Central Bureau of Investigation broke up a group involved in the production of counterfeit perfumes. The perpetrators produced and distributed perfumes in small volume containers – 20 and 33 ml (so-called “perfumery pens”). The scale of the practice was enormous. The media widely commented that this is one of the biggest hits in this type of illegal business in Europe. However, we still hear about the detention of other people who trade such goods.
Counterfeit trademarks with a typo
We note more and more cases in the cosmetics sector where the objective is to determine if the designation used on the product – very similar but not identical to a registered trademark – should be considered a counterfeit and, consequently, could be prosecuted.
In our practice we see more and more perfumes with designations representing modified registered trademarks. The differences are usually minor. Often almost imperceptible. In the case of word marks, they are repeated letters, usually at the end of the word, or modifications that appear to be typos. With colour graphic trademarks, it can also be a difference in color or shade. The aggrieved party, in this case the trademark owner, may have grounds for motioning for prosecution and for seeking protection of his rights through criminal proceedings.
How was it in the past and how is it today?
This regulation has not always functioned in the Polish legal order. Under the Trademarks Act that preceded the Industrial Property Law Act, the marketing and designation of goods (or services) with a registered trademark which the perpetrator was not entitled to use was a punishable offence. Many legal scholars held the position that, based on the regulations in force at that time, the issue was only about deceptively similar marks. However, the Supreme Court did not share this position explaining that the legislator – in view of a clearly formulated provision – did not intend to penalize behaviours related to goods bearing confusingly similar marks (Supreme Court ruling of October 27, 1994, case I KZP 26/94). The Supreme Court pointed out in the justification of the ruling that since the Trademarks Act distinguishes between the notions of “registered trademark” and “mark similar to a registered trademark”, and there is no such distinction in the criminal provisions of that Act, it is clear that “similar mark” is not subject to the provisions of criminal law. Despite the Supreme Court having taken this stand, legal scholars continued to maintain their position. They referred to arguments of a purely practical nature resulting from their experience with such matters.
Only the entry into force of the Industrial Property Law Act, which replaced the Trademarks Act, led to the penalization of trade and production of goods bearing confusingly similar marks. Art. 120 par. 3 pt. 3 of the Act defines a counterfeit trademark as one that is:
- An identical mark used unlawfully, or;
- A mark that cannot be distinguished in ordinary trading conditions from a registered trademark.
Counterfeit identical mark
The first category of counterfeit marks, i.e. marks that are identical, does not essentially raise any doubts. When using a mark identical to the registered trademark, it is crucial to determine whether the use is unlawful, i.e. whether it occurred without the consent of the rightful trademark holder. Both the doctrine and the jurisprudence hold the position that the circumstance whether the consumer may be misled or not is irrelevant when using an identical designation. Even the seller who openly informs the buyer that the offered product is a fake will not avoid criminal liability in this way. The fact that the buyer knowingly takes part in the trade in counterfeit goods does not affect the seller’s culpability.
Counterfeit similar mark
The situation of confusingly similar trademarks is definitely more complicated. From the very beginning there was a danger of interpreting problems with regard to understanding the notion of a “similar mark” under criminal law. It is worth noting that, in order to define a “similar mark” in criminal law, the legislator did not use the notion of “misleading” known under civil law, which already had accumulated rich case-law, but the notion of “distinctiveness in ordinary trading conditions from a registered mark”. Therefore, the question arises whether to understand the term ”similar mark” in criminal law one can make use of the rich jurisprudence of civil law. Legal literature does offer statements leading in this direction.
The counterfeit mark and the registered mark must be similar to each other with this additional caveat that the similarity must exist under ordinary trading conditions. Regardless of the differences in details, the similarity consists in the general impression that a given designation may give, and this is a matter of fact (judgment of the Supreme Court of October 15, 1935, case III K 912/35). Criminal liability as concerns similar marks depends on the existence of the risk of confusion as to the identity of the manufacturer. If “the existence of a risk” is raised, it means that even a potential possibility of a mistake is taken into account. Therefore, it is not necessary to demonstrate that such mistake has actually occurred. The mere possibility of confusing the marks is sufficient.
In practice, most interpretation problems are caused by the understanding of the term “ordinary terms of trade”. There are no unambiguous criteria on the basis of which this concept can be interpreted. Assessment of similarity in ordinary terms of trade is made from the perspective of a person potentially interested in a given commodity. When assessing, it is necessary to take into account the amount of time and attention the potential consumer devotes to the selection of a given type of goods. If we buy an article hastily because, for example, it is a product of everyday use which we often purchase, we will dedicate much less attention to such purchase than, for example, when choosing a household appliance. Much importance may also lie in whether the consumer already knows the product, i.e. whether he already had contact with it or bought it in the past. When we reach for a well-known product on the store shelf we do not pay attention to the details of its packaging. We are guided by the image of this product preserved in our memory.
However, it is difficult to look for a closed catalog of factors that have an impact on the assessment of ‘ordinary terms of trade”. Certainly, the general principles that govern human perception should be taken into account. Usually we only remember the general, superficial, image of the mark, without any details. As a consequence, small typos can be simply overlooked, especially when the registered trademark is a foreign word containing letter combinations not typical to the Polish language.
The aforementioned circumstances explain to a certain degree the concept of a counterfeit trademark within the meaning of criminal law. However, no guidelines provide a full-proof basis for creating a rigid framework for the assessment. And although such solution is not ideal, so far it has not been possible to develop a better one.
And how is it in practice?
Criminal proceedings regarding similar marks are rather rare, although – as we have already signaled – there are more such cases now than in the past. Cases in which courts have hitherto condemned the infringers and thus confirmed that marks used on goods that are non-identical with registered marks are counterfeit trademarks, mainly related to perfumes in which the reproduction concerned the entire outer form of the product, the shape of the perfume bottle and the cardboard packaging along with the graphic layout and the colour scheme. In comparison with registered marks, designations used on such perfumes usually differed in one letter added or removed at the end of the trademark, and possibly in a changed order of one or two letters.
The courts underline in the justifications of their judgments that, particularly in the case of registered trademarks that are foreign words, it is more difficult for consumers to precisely recall their appearance. In turn, in one of the cases that concerned a figurative mark, the court found that its mirror image was a counterfeit designation.
In each such case it is necessary to conduct a thorough analysis and make an individual assessment. It may turn out in the end that the designation used on the product is not sufficiently similar to the registered trademark. Then the provision of art. 305 of the Industrial Property Law Act will not apply. Nevertheless, it should be kept in mind in such cases that the regulation of this act is not the only basis that gives the aggrieved party the opportunity to act under criminal law. Also the provisions of the Copyright and Related Rights Act and the Act on Unfair Competition Countermeasures may constitute such basis. Irrespective of the above, the brand owner may counteract infringements also in civil courts.
Ewa Górnisiewicz-Kaczor, adwokat, Intellectual Property practice, Wardyński & Partners
