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Criminal sanctions imposed for sale of grey goods

An appeal asked the Supreme Court to determine the proper construction of section 92(1) of the UK Trade Marks Act 1994; the part which sets out the criminal offences relating to the unauthorised use of trade marks.

The Supreme Court ruled that criminal penalties can not only be imposed on businesses that engage in the sale of ‘true’ counterfeit goods but also those who sell ‘grey goods’- goods that have been legitimately produced but whose sale has not been authorized by the relevant trade mark owners.

The defendants, who were involved in the alleged bulk importation and subsequent sale of goods bearing the trade marks of well known brands such as Ralph Lauren and Adidas, argued that whilst civil liability would arise from any unauthorized trade mark use, a criminal offence could only subsist in the case of the sale of counterfeits as opposed to grey goods on the basis of the wording of section 92.

The court unanimously dismissed this reading of the provision stating the appellants’ proposed reading of the section was ‘strained and unnatural’.

The court further dismissed the defendants’ argument that the Crown’s construction of section 92(1) was a disproportionate breach of their rights under Article 1 of the Human Rights Act and considered a criminal penalty a necessary sanction for those who may otherwise calculate the risk of liability in damages is one worth taking.

Accordingly the appeal was dismissed and the criminal trial will proceed accordingly.

Case details at a glance

Jurisdiction: United Kingdom
Decision level: Supreme Court
Parties: R v M & Ors
Citation: [2017] UKSC 58
Date: 03 August 2017

Full decision

Read the full decision from the Supreme Court.

Full decision in [2017] UKSC 58