Students convicted for selling fake copies of Microsoft software

Sweden

A law student and a computer science student have been convicted of trademark and copyright infringement by the Stockholm District Court.

The students had come across a blog about how to earn extra money while studying and found a website called DHgate. Through DHgate, they had contacted a factory in China from which they imported copies of Windows 7 and Microsoft Office. They then sold the programs through online marketplaces in Sweden and in Norway. The price varied, but they claimed that it was Skr1,000 or less. The students themselves paid Skr150 to Skr200 for the products, including customs duties. They claimed that they were convinced that they were doing business directly with an official Microsoft factory and never suspected that they were selling fakes. The products came in boxes bearing Microsoft logotypes, the software connected to the Internet and the supplied product keys worked almost every time.

When selling the products, the students used aliases and different addresses, claiming that they wanted to stay anonymous on the Internet. Occasionally, their accounts on the online marketplaces were shut down; they claimed that they did not know why and never suspected that this was due to the fact that their business could be illegal.

Trademark infringement may occur when someone, during the course of business, intentionally or through gross negligence, purchases or imports goods that have been unlawfully marked with someone else’s trademark, and stores, offers, advertises or sells such goods. Copyright infringement may occur when someone, intentionally or through gross negligence, takes measures which infringe the sole rights of a copyright holder.

Fourteen of the computer programs were examined by Microsoft and all of them were found to be fake. Due to the scale of the students' activity, the court found that the students' actions were “in the course of business” and that, therefore, they had an extended obligation to examine the origin and authenticity of the goods. In addition, the court argued that extra caution was necessary because of the extent of the market for fake copies over the Internet, and because China is a major producer of counterfeit goods.

The court found that the students had not made any efforts to check the origin of the goods, even though the price of Skr150 to Skr200 was exceptionally low. The students had also imported counterfeit Canada Goose jackets, which is a common product on the counterfeit market. The use of false identities showed that the students were aware of the fact that they were selling fake copies for the purpose of earning easy money. This led to the conclusion that the students had acted intentionally and should be convicted for these crimes. Each imported computer program was seen as a separate crime, which resulted in the students being found jointly responsible for over 400 crimes. The punishment was set at eight months' imprisonment, but the students were both given a suspended sentence and community service.

The counterfeit market is constantly growing. Before the harmonisation of IP rights in the European Union through the IP Rights Enforcement Directive (2004/48/EC), often trademark cases in Sweden were criminal in nature only if other crimes (eg, tax crimes or smuggling) could conceivably be present. This was in spite of the fact that trademark infringement has been recognised as a crime in Sweden since 1960. The Swedish legal system has been harsher in copyright cases, where criminal proceedings have historically been more common. In recent years, however, the amount of criminal trademark cases, as an alternative to civil law cases, has increased, even where there was no association with other crimes. There is a public interest in imposing stricter penalties on those who commit trademark infringement - time will tell whether criminal law is the way to go in the fight against piracy.

Ellinor Wilow, von lode advokat ab, Stockholm

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