A trademark is a sign that serves to distinguish the goods and services of one undertaking from those of its competitors, and registration confers on its proprietor a monopolistic power of use. Using the trademark, or a sign that cannot be distinguished from it, beyond the limits of that power and without the consent of the rightholder, placing counterfeit goods on the market and similar conduct constitute infringement of trademark rights.
The legal instruments available to a proprietor faced with an infringement are not confined to damages. The rightholder may first seek a determination of whether the act amounts to infringement; equally, it may request that an imminent infringement be prevented, that a continuing infringement be brought to an end, or that the consequences of an infringement whose effects persist be removed. Recourse to damages in respect of the loss sustained is independent of those claims.
Because the acts in question are also defined as criminal offences, criminal proceedings may be pursued alongside the civil action. In this briefing note we examine, from a practical standpoint, the conduct that amounts to infringement, the types of action that may be brought, and the court before which the dispute is to be taken.
The Concept of a Trademark
The legal definition of a trademark is set out in Article 4 of the Industrial Property Act No. 6769. Under that provision, a trademark covers any sign that serves to distinguish the goods and services of one undertaking from those of another undertaking. Our observations on the concept of a trademark, which has a broad field of application in industrial property law, and on the registration procedure are set out in our article entitled Trademark Selection and Trademark Registration.
Acts Amounting to Trademark Infringement
The Industrial Property Act enumerates the conduct constituting infringement by way of example and attaches various sanctions to its occurrence. The fact that the enumeration is illustrative means that conduct not appearing on the list but producing the same result may likewise be treated as an infringement. The principal instances of infringement provided for in the Act are as follows:
- Imitating the trademark by using the trademark, or a sign so similar that it cannot be distinguished from it, without the consent of the rightholder.
- Using the trademark in a manner contrary to the forms of use set out in Article 7 of the Industrial Property Act.
- Offering for sale goods bearing a counterfeit trademark by a person who knows, or who in the circumstances ought to know, that the goods bear such a trademark.
- Distributing, importing or exporting goods bearing the infringing sign, placing them on the market by other means, or holding them for commercial purposes.
- Making an offer to enter into a contract in respect of goods of that nature.
- Extending without authorisation the powers granted under a licence agreement, or transferring the rights arising from the licence to third parties.
Legal Remedies Available in Cases of Infringement
As we set out in detail in our study entitled Trademark Registration and the Rights Conferred by a Trademark, a range of powers is conferred on the proprietor of a trademark entered in the register. The most common manifestation of those powers in practice is an application to the court for a declaration, made by a proprietor who considers that its right has been infringed, in order to establish the scope of the act that has occurred. The rightholder is not obliged to be content with a declaration; it may also seek the prevention or cessation of the infringement or the removal of its consequences. Claims for pecuniary and non-pecuniary damages may likewise be raised together with those actions.
In addition, the proprietor may request the seizure of the infringing goods and of the equipment used in their manufacture, the grant to it of a right of ownership over that equipment, and the destruction of the counterfeit goods. It is also possible to seek an interim injunction in order to prevent the infringement from continuing while the proceedings are pending.
Finally, since infringement of a trademark right also constitutes a criminal offence, the rightholder has the option of setting criminal proceedings in motion against those who carry out the infringement.
Action for a Declaration of Infringement
An action for a declaration serves the purpose of having the court determine whether a legal relationship exists. In trademark law, this action is used to establish whether particular conduct amounts to an infringement.
Where the rights of the proprietor or of the licensee have been harmed or are under threat, there is a legal interest in having the position established by a court judgment. However, since a declaratory judgment does not produce a result capable of enforcement, in practice this claim is not generally raised on its own; it accompanies claims for performance such as the prevention or cessation of the infringement or an award of damages.
Action to Prevent a Likely Infringement
This action seeks to prevent at the outset an infringement that has not yet occurred but is expected to occur. Where, for example, preparatory activities are present, such as the procurement of equipment suitable for counterfeit production, recourse may be had to the courts before the infringement has actually begun.
Action for Cessation of the Infringing Act
What distinguishes an action for cessation from an action for prevention is that here the infringement has already begun and continues to produce its effects. A proprietor faced with a continuing infringement may use this action to seek the termination of the conduct giving rise to it.
For the claim to be granted it is not necessary that the infringer be at fault or that the rightholder have suffered a loss. Where, on the other hand, the element of fault is present, damages may also be sought together with the claim for cessation.
Actions for Removal of the Infringement and for Damages
Where an infringement has ended but its consequences persist, an action for the removal of the infringement arises. For this claim to be raised, an unlawful result must actually have come about; the manufacture of goods bearing the unlawful sign, their display at a trade fair or their being offered for sale are examples of such a situation.
Since infringement of an industrial property right is by its nature a tort, a rightholder who suffers loss as a result of the infringement may claim non-pecuniary damages and damages for injury to reputation in addition to pecuniary damages.
Criminal Liability for Trademark Infringement
The liability of the person committing the infringement is not confined to civil actions; the act also carries a criminal sanction. A proprietor whose right has been violated may file a criminal complaint with the public prosecutor and seek the punishment of the perpetrators. The Industrial Property Act provides that a term of imprisonment and a judicial fine may be imposed on those who commit these acts.
Law on Intellectual and Artistic Works Art. 71 — Infringement of moral, economic or related rights
“Any person who, by infringing the moral, economic or related rights relating to the intellectual and artistic works protected under this Act:
1. adapts, performs, reproduces, alters, distributes, communicates to the public by any means serving the transmission of signs, sounds or images, or publishes a work, performance, phonogram or production without the written consent of the rightholders, or who offers for sale, sells, disseminates by way of rental or lending or in any other manner, purchases for commercial purposes, imports or exports, holds otherwise than for the purpose of personal use, or stores works that have been unlawfully adapted or reproduced, shall be sentenced to imprisonment from one year to five years or to a judicial fine.
2. Any person who gives his own name to a work belonging to another shall be punished with imprisonment from six months to two years or with a judicial fine. Where this act is committed by way of distribution or publication, the upper limit of the term of imprisonment shall be five years and no judicial fine may be imposed.
3. Any person who quotes from a work without indicating the source shall be punished with imprisonment from six months to two years or with a judicial fine.
4. Any person who, without the consent of the rightholders, makes a public disclosure concerning the content of a work that has not been made public shall be punished with imprisonment of up to six months.
5. Any person who indicates the source of a work in an insufficient, incorrect or misleading manner shall be punished with imprisonment of up to six months.
6. Any person who reproduces, distributes, disseminates or publishes a work, performance, phonogram or production using the name of a well-known other person shall be punished with imprisonment from three months to one year or with a judicial fine.
Those who commit without authorisation the acts referred to in the first paragraph of Additional Article 4 of this Act, and information content providers who continue to infringe the rights recognised under this Act, shall be sentenced to imprisonment from three months to two years, provided that their acts do not constitute an offence requiring a heavier penalty.
Where a person who offers for sale, sells or purchases a work, performance, phonogram or production that has been unlawfully produced, adapted, reproduced, distributed or published states, before the prosecution stage, from whom he obtained them and thereby enables their apprehension, the penalty to be imposed on him may be reduced, or it may be decided not to impose a penalty at all.”
Law on Intellectual and Artistic Works Art. 72 — Preparatory acts aimed at rendering protective programs ineffective
“Any person who produces, offers for sale, sells, or holds otherwise than for the purpose of personal use programs or technical equipment intended to render ineffective the additional programs created in order to prevent the unlawful reproduction of a computer program shall be punished with imprisonment from six months to two years.”
In cases of infringement of rights falling within the scope of the Law on Intellectual and Artistic Works, authors may likewise apply to the public prosecutor and have criminal proceedings brought against those responsible. Our detailed assessment on this subject may be found in the article entitled Criminal Actions Available Against Infringement of Rights in Intellectual and Artistic Works.
Courts with Subject-Matter and Territorial Jurisdiction
In civil actions arising from trademark infringement, subject-matter jurisdiction lies with the Civil Court for Intellectual and Industrial Property Rights. Where no such specialised court has been established in the relevant judicial district, the case is heard by the civil court of first instance. As regards territorial jurisdiction, the claimant is given more than one option: the court of the rightholder’s domicile, the court of the place where the unlawful act was committed, or the court of the place where that act produced its effects has jurisdiction.
In criminal proceedings, the court with subject-matter jurisdiction is the Criminal Court for Intellectual and Industrial Property Rights; where no such court exists in the locality concerned, the proceedings are conducted by the criminal court of first instance. Since no special provision on territorial jurisdiction is laid down in the Industrial Property Act, the general and special jurisdiction rules contained in the Code of Criminal Procedure No. 5271 apply.
Independent Legal Assessment
What is decisive in trademark infringement cases is the strength of the evidence rather than the content of the statement of claim. Where the presence of the counterfeit product on the market, the volume of sales and the date on which the infringement began cannot be established in concrete terms, the merits of the case cannot be translated into heads of damages. For that reason, steps to obtain a determination and to secure evidence must be taken swiftly as soon as the infringement is discovered.
The second critical point is the correct construction of the claims. Since claims for a declaration, prevention, cessation and removal rest on different factual conditions, an action brought without a correct assessment of the stage the particular case has reached may prove fruitless. The following matters should be taken into account in a trademark infringement file:
- Establishing whether the infringement is continuing, has ended, or is still at the preparatory stage
- Recording the evidence through instruments such as a notarial determination, purchase records and internet archives
- Raising a request for an interim injunction together with the action in order to halt the spread of the goods on the market
- Justifying the heads of pecuniary damages, non-pecuniary damages and damages for injury to reputation separately
- Planning the civil action and the criminal investigation so that they support one another
- Where a licence relationship exists, reviewing the limits of the powers granted under the agreement
Independent Legal provides services across the full range of industrial property disputes in cases of trademark infringement, from the determination and injunction stage through to the conduct of damages actions and criminal proceedings.