Additional civil options provided to rights holders during criminal prosecutions

United Kingdom

The Enterprise Act 2002 (Disclosure of Information for Civil Proceedings etc) Order 2007 has entered into force.

Local trading standards and customs bodies have long provided an invaluable resource to brand owners and copyright holders in the United Kingdom in controlling counterfeit or pirated products, particularly at the end of the distribution chain via seizures at market stalls or at borders. However, since 2002 the two potential approaches to tackling counterfeits or pirates - through criminal or civil redress - have been kept almost entirely separate.

Part 9 of the Enterprise Act 2002 controversially restricted the disclosure of certain information obtained for the purposes of a criminal prosecution from being admitted in civil proceedings. This meant that rights holders were prohibited from using information passed to them in the course of investigation by a public body to bring their own civil proceedings against infringers. This significantly hampered rights owners in their ability to follow up on infringers when, for example, a criminal prosecution was not considered worthwhile or there were other reasons for seeking financial or other redress.

Following extensive lobbying, the position has been changed with effect from October 1 2007. The new Section 241A of the Enterprise Act (inserted by Section 1281 of the Companies Act 2006) provides that information may be disclosed by public bodies and used for the purposes of, or in connection with, "proceedings in respect of the rights and obligations of consumers and those relating to or arising out of the infringement or misuse of IP rights".

In practical terms, the type of information that will be useful to brand owners will be quantities of counterfeit goods and information about the source of those goods. This will allow them to consider the options for bringing civil proceedings against counterfeiters or pirates, depending on the scale and importance of the operation or its position in the distribution chain.

The new powers to share information also apply to information that came into the possession of a public body prior to October 1 2007. This will allow rights holders to reassess their position historically with respect to major instances of piracy and to exert additional pressure in ongoing investigations by bringing parallel civil proceedings. Moreover, the new measures extend to any information obtained by a public body in the course of discharging a public duty, the main exception being information provided to the Office of Fair Trading in the course of competition investigations. The move will be widely welcomed by rights holders.

Hiroshi Sheraton, McDermott Will & Emery UK LLP, London

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