Criminal penalties provisions of Trademarks Act clarified

In Commonwealth Director of Public Prosecutions Reference No 1 of 2008 ([2008] VSCA 214, October 30 2008), the Court of Appeal of the Supreme Court of Victoria has held that the criminal penalties provisions of the Trademarks Act do not require that the accused appreciated that his or her conduct was unlawful or wrong.

The act includes criminal penalties for false application of a registered trademark (Section 146) and for importing, possessing or selling goods to which a registered trademark has been falsely applied (Section 148). Penalties include fines of up to A$55,000 and imprisonment for up to two years (Section 149).

Notwithstanding that these provisions and their predecessors have been in the trademark legislation for over a century, cases concerning them have been relatively infrequent. This has been perceived to be due to:

past reluctance on the part of state and federal police to devote resources to such cases;
the necessity to satisfy the criminal standard of proof (beyond reasonable doubt); and
the necessity to establish the mental element of the crime.

The latter element was the subject of the decision of the Court of Appeal of the Supreme Court of Victoria in the present case. The matter came to the court pursuant to a reference under Section 450(A) of the Crimes Act (Vic), which provides that where a person has been acquitted, the director of public prosecutions may refer to the Court of Appeal a point of law which has arisen in the case.

The accused, HG, was charged in the County Court with offences under Sections 148(b), (d) and (g) of the Trademarks Act in that he had intentionally imported and exposed for sale counterfeit handbags and other goods "knowing that, or reckless of whether or not, a registered trademark was falsely applied to or in relation to the goods". In his charge to the jury, the learned trial judge stated that:

"the Crown would need to prove beyond reasonable doubt that […] each accused individually was aware that it is wrong. That is, unlawful in a criminal sense."

The director of public prosecutions sought the opinion of the court on:

what were the elements of the offence under Section 148; and
whether these elements "include[d], as ruled by the learned trial judge, that the accused had knowledge, awareness or belief that the conduct was unlawful in a criminal sense".

The Commonwealth Criminal Code codifies the principles of the common law in relation to criminal responsibility and sets out requirements for the showing of physical elements - for example, facts such as conduct or circumstances, and fault elements (mental elements) such as intention, knowledge, recklessness or negligence.

The physical elements were not in dispute. In relation to the fault element, the court accepted the submissions of the director of public prosecutions that all that was required of the prosecution was to establish that:

"the accused knew that, or was reckless of whether or not, a trademark was applied to the goods without authorization. Proof of the knowledge of that fact is sufficient. There is no requirement that the accused appreciated that his conduct was unlawful or wrong."

The opinion of the court may come as no surprise to criminal lawyers, but its clarification of the question may at least partly relieve the burden on the prosecution in the application of the criminal provisions in counterfeiting cases.

Shortly after this decision was published, IP Australia released an options paper, Review of Penalties and Additional Damages - Trademarks Act 1995, seeking submissions in relation to, among other things, procedural and fault liability changes to the act to facilitate enforcement and increases in the penalties prescribed.

Des Ryan, Davies Collison Cave, Melbourne

Criminal penalties provisions of Trademarks Act clarified

Related Topics