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No Criminal Conviction Required for Forfeiture of Counterfeit Goods

Trade marks are all about protecting brands that are the product of original thought and have often taken a great deal of money to establish. In a guideline ruling that boosts that protection, the High Court has emphasised that forfeiture of counterfeit goods does not have to be based on a criminal conviction.

The case concerned a businessman who had faced a criminal charge under Section 101(5) of the Trade Marks Act 1994. He was alleged to have consented or connived in his company’s unauthorised possession, custody or control of a large number of ornamental signs which depicted various models of cars and motorbikes and which also displayed the trade marks of various vehicle manufacturers without authority.

Following his trial, a jury was unable to reach a verdict on the charge and, after the prosecution offered no further evidence, he was acquitted. However, the trial judge went on to order forfeiture of the goods under Section 97 of the Act, after finding on the balance of probabilities that a trade mark offence had been committed.

In dismissing the businessman’s challenge to the forfeiture order, the Court rejected arguments that the judge’s decision amounted to a violation of his human right to peaceful enjoyment of his possessions. There was no ambiguity or absurdity in the statutory provisions and there was nothing to prevent a forfeiture order being made in relation to goods, even where there has been an acquittal.

Also rejecting arguments that the forfeiture order was disproportionate, the Court noted that the purpose of the Act was to keep counterfeit goods permanently off the market. Parliament had chosen to enable forfeiture to take place when infringing goods are shown to be the subject of a criminal offence. It was not necessary for the person in possession of those goods to be convicted of such an offence for the Act to bite. The relevant order had in any event been made against the goods, rather than against the businessman or any other individual.



 
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