Defendant acquitted in counterfeiting case despite far-fetched claims

In a case involving a shipment of counterfeit goods from China, the Stockholm District Court has acquitted the defendant after the latter pleaded that he had not ordered the goods (Case B 6961-11).

In October 2009 the Customs authorities in Malmö, Sweden, found approximately 1.6 tonnes of counterfeit goods when they decided to examine a sealed container coming from Ningbo, China. The container, ordered by the company American Wear in Malmö, contained nearly 11 tonnes of goods. The actual order sheet was not found, but the packing list revealed that the cargo should have contained perfumes. The boxes also contained counterfeit clothes, and handbags were listed as plastic toys.

The owner of American Wear was prosecuted for trademark infringement and the prosecution was supplemented by a damage claim from nine of the affected brands (adidas, Chanel, Gucci, Kenzo, Lacoste, Louis Vuitton, Nike, Prada and Tommy Hilfiger) in the amount of approximately €145,000.

The main question in this case was whether the defendant had knowingly and specifically ordered the counterfeit goods, or whether the goods had ended up in the container in some other way.

The defendant admitted that he had ordered a container of goods from China, but denied that he had ordered any counterfeit goods. He explained that the order had gone through his contact in China, 'Jennie'. He stated that Jennie had once before sent him goods that he had not ordered, and gave various explanations as to how the counterfeit goods could have ended up in the container. According to the defendant, the goods were packed in large warehouses where workers did not speak English; further, he did not know whether the containers were sealed at the suppliers' premises or later. He also stated that the packing was normally supervised by Jennie but that, this time, the packing had been supervised by Jennie’s husband who, according to the defendant, may have believed that the defendant was having an affair with his wife and sought to take revenge.

The Stockholm District Court declared that, objectively, the import of the goods at issue constituted an infringement in the plaintiffs’ trademarks. However, in order to convict the defendant, it had to be established beyond reasonable doubt that the latter had bought the counterfeit goods intentionally or through gross negligence.

The court did not consider the defendant's claim that Jennie’s husband had packed the counterfeit goods in order to take revenge on the defendant, finding that the claim was unlikely. However, the argument that something had gone wrong during the packing process was not sufficiently unlikely to be left unconsidered. No evidence was presented with regard to the usual process of packing and loading goods in China, so the court could not exclude that something had gone wrong during the packing process. The bill of lading did not specify that the shipment contained counterfeit goods, and the packing list did not show that anyone had reviewed or approved the shipment. The court further stated that the high standard of proof ("established beyond reasonable doubt") remained, even though, in this case, it was particularly difficult to investigate the relevant circumstances.

As neither the prosecutor nor the plaintiffs succeeded in rebutting the defendant’s allegations that something had gone wrong during the packing process, the court held that it had not been established beyond reasonable doubt that the defendant had intentionally ordered the goods.

With regard to gross negligence, adidas and Tommy Hilfiger’s attorneys pointed out that the goods originated from Jiwu, a Chinese city which they called “the Wall Street of Counterfeiting”. According to them, everyone who trades with China is aware that the city is well known for counterfeit goods.

The court declared that the claim that the city of Jiwu is well known for the export of infringing goods had not been substantiated by any evidence. Since no evidence was presented to prove that the defendant should have been particularly vigilant when he ordered the goods, the court held that it had not been established beyond reasonable doubt that the defendant had committed an act of gross negligence. Therefore, the claim for damages was rejected.

Another claim that was brought up during the proceedings (ie, that American Wear had been involved in counterfeiting before), but was settled out of court, does not seem to have been taken into consideration by the court.

This judgment confirms that the standard of proof in criminal cases can be very high for trademark holders and prosecutors. It is extremely hard to prove circumstances that took place a long time ago in a different country to the point where they are beyond reasonable doubt. Is the standard of proof too high? This is debatable, but from now on, there is a clear risk that a defendant accused of importing counterfeit goods will argue that something has gone wrong during the packing process in order to get off the hook. 

Tom Kronhöffer and Isabella Palmgren, von lode advokat ab, Stockholm