The Justification forCriminal SanctionsNational Workshop on IPEnforcement - Indonesia

JakartaSeptember 15-16, 2011

Xavier VermandeleLegal Officer, Building Respect for IP Division

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Introduction

Article 61 TRIPS:“Members shall provide for criminal procedures andpenalties to be applied at least in cases of wilfultrademark counterfeiting or copyright piracy on acommercial scale. […]. Members may provide forcriminal procedures and penalties to be applied inother cases of infringement of intellectual propertyrights, in particular where they are committed wilfullyand on a commercial scale”.

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Introduction

Why criminalizing?Policy reasonsQuestion of effectiveness as well?

Scope?Emphasis on TM counterfeiting and copyright piracy… under conditions… and might go further

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1. What?

Art. 61 TRIPS and many legislation: criminalizationlimited to TM infringement and copyright piracy

TM counterfeiting: more than TM infringementImitation (two signs must be identical or fairlyindistinguishable), infringing goods = substantiallycopies => intention to cause confusion, to deceive

Copyright piracy: more than copyright infringementIllicit copy

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1. What?

TM infringement + Copyright piracy :WilfulnessCommercial scale

goal: obtaining a commercial advantagenot acts carried out by private users for personal

and not for profit purposessome countries go further

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2. Why criminalizing?

US DoJ: Criminal sanctions in order “to punish and deterthe most egregious violators: repeat and large-scaleoffenders, organized crime groups, and those whosecriminal conduct threatens public health and safety”

Policy considerations - Criminal Law, in general,protects private rights if there is (a) public policyelement(s)

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2. Why criminalizing?

For TM counterfeiting and copyright infringement, whichone(s)?

Protection of local and regional industries + of localand regional cultureProtection and encouragement of FDI andinternational trade relationsProtection of public health and safetyProtecting consumers from fraudTax and customs incomePrevention of corruption and organized crime

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2. Why criminalizing?

Criminalization as an alternative to civil proceduresexperienced as being less efficient to fight counterfeitersand pirates (instead of “mere” competitors who happento infringe IPRs)

Canadian anti-counterfeiting network: “Civil remediesare not effective because counterfeiters are criminals.They do not respect the law, and they strategicallyand tactically carry out their criminal activities in waysexplicitly designed to avoid the justice system, bothcivil and criminal”

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2. Why criminalizing?

Advantages in comparison with civil path:

Public intervention: investigation!Less costly and quicker than civil procedureDeterrent effect being more effective?

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2. Why criminalizing?

Disadvantages :

How to compensate the right holder – civil aspects(still) to be dealt with“Specialization” of judges in criminal courts? And ofinvestigation and prosecuting authorities?Over-criminalization / no proportionality in sentencesmay have a counter effect

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3. Why focusing on TM/copyright?

Faculty of MS to go furtherLess appropriate?

Example: Willful infringement of patent rightsPublic authorities not equipped to detect patent

infringementWillful infringement difficult to evidence – e.g.:

quid infringement by equivalent?Over-deterrent effect on innovation?Conflicting interests of right holders – e.g.: IT vs.

pharmaceutical companies?

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4. Alternative Criminal Charges

FraudCustomsTaxRacketeering and money launderingDrug and food legislationsLabour related legislationsComplicity - Attempts

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THANK YOU FOR YOUR ATTENTION!

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