Criminal Trademark Bill severely criticized

The Paraguay Congress is considering a Criminal Trademark Bill aimed at punishing violations of trademark rights protected under Trademark Law 1294/98. However, there is no consensus as to the need for a new law.

The main criticism against the Criminal Trademark Bill is that the Trademark Law already includes a chapter linking civil and criminal actions for trademark infringements. It is felt that any shortcomings in these provisions could be remedied with a number of amendments, such as increasing penalties and fines, or adding new penalties, such as removing infringers from commercial registers. Some offences, such as false accusations or complaints, are established criminal offences in the Criminal Code, and thus do not need to be included in a separate Criminal Trademark Law.

Another objection is that the bill establishes that trademark infringement actions will be decided by civil courts where the value of the matter at issue is less than 10 times the minimum daily wage. Critics suggest that actions should follow the standard criminal procedure rules and not be defined by the value of the matter.

The bill also provides that parties found guilty of keeping, selling or intending to sell, promoting or circulating for commercial purposes goods or services that are counterfeit or altered should only pay a fine. Critics feel that this is not severe enough punishment. In contrast, the bill proposes tough criminal sanctions in cases of false claim of ownership of a registered trademark or licence.

The bill establishes that a trademark owner will be responsible for any prejudice caused by its representative during a criminal action. However, the mark owner is not criminally liable for wrongly initiating proceedings.

The Trademark Law recognizes counterfeiting as a crime punishable by either a prison sentence or a fine, but the bill seeks to impose both. It also provides that a trademark owner may initiate criminal actions where prosecutors fail or refuse to initiate a prosecution.

The bill provides for the introduction of public auctions to sell infringing goods with the aim of raising funds to pay damages to the mark owner. However, the current draft actually allocates auction proceeds to the Supreme Court of Justice.

Brigitte Urbieta, Berkemeyer Attorneys & Counselors, Asuncion