Private Prosecutions – a viable line of attack against counterfeiters

May 2017

In the commercial world producers of quality goods rely upon exclusivity and their reputation within the marketplace.  The preservation of their products’ reputation being integral to long term commercial success. 

The problem encountered by producers and brand owners of commercially successful goods is the determination of counterfeiters to exploit the consumers’ wish to be associated with the relevant brand and their willingness to embrace cheap, and illegally produced, copies. Significant investment in the protection of intellectual property, and the concerted pursuit of civil enforcement proceedings, can provide producers and brand owners some protection but has less impact against determined and organised criminals. The activities of the organised counterfeiters can cost the original manufacturers and brand owners millions of pounds in lost profits and an unquantifiable loss of reputation. 

The failure of civil proceedings to deter the determined criminal is evident from the continued prevalence of counterfeit goods. This is to a large extent fuelled by the consumers’ perception that counterfeiting is, somehow, a victimless crime – there is a failure to recognise the social consequences generated by the counterfeit market, safety concerns and the extent to which the purchase of counterfeit goods implicitly condones the criminals’ behaviour. The pursuit of civil proceedings alone potentially does little to dispel that perception.

There is increasing recognition by the original manufacturers that alternative enforcement proceedings may provide more effective protection.  Historically, the publicly funded prosecution authorities have been perceived to be reluctant to pursue complex and expensive litigation in all but the clearest cases – the strain upon public funds, which doubtless informs that decision, is unlikely to ease in the foreseeable future.  

The hitherto relatively rare option of launching a private prosecution against the counterfeiters has now become a realistic option. There are a number of hurdles to be overcome (see s6(1) Prosecution of Offences Act 1985 for the fundamental requirements to launch such a prosecution) but the pursuit of criminal proceedings has the potential to provide an effective deterrent to the counterfeiters and a reminder to the end consumer of the criminal nature of their purchases. The private prosecutor bears the burden of investigating the activities of the alleged counterfeiters and presenting the court with a “prima facie” case. The option for the publically funded prosecuting authorities to “take over” the case exists throughout the process and only time will tell whether there is a genuine appetite for well prepared and viable prosecutions to be so adopted.

There are costs involved for the potential prosecutor and not all the costs are necessarily recoverable, however, those costs need be balanced against the commercial damage inflicted by the perpetrators. The burden of disclosure obligations and the compilation of evidence are also matters which need careful consideration but both are manageable with the requisite amount of preparation by an appropriately qualified combination of professionals. In the right case the commencement, and pursuit, of a private prosecution, by those whose businesses are being damaged by the activities of counterfeiters, is likely to prove to be an effective deterrent.       

This update was prepared by Michael Duck QC (No.5 Chambers, London). HGF Law Partner Marie McMorrow will be hosting a discussion lunch with Michael Duck QC at INTA on 21 May 2017, on the use of private prosecutions against counterfeiters.