IP Crime: A Primer on India’s Trademark Infringement Laws

City of Skulls

 Editor’s Note: This post takes a look the consequences of infringing trademarks and other actions that are considered “IP crime” under Indian criminal laws. India’s attempts to take stricter measures to curb “IP crime” stems from its obligations under TRIPS, the WTO-administered international agreement that sets out minimum standards a signatory country must adhere to.

TRIPS and IP Crime
Article 61 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) mandates that Member States must provide for criminal remedies for willful trademark counterfeiting and copyright piracy. The criminal remedies include imprisonment of the infringer(s). The Article further directs Member States to impose monetary fines and at appropriate circumstances, to search and seize the infringing/counterfeit goods. The two legal prerequisites for constituting an IP crime are 1) willfulness 2) commercial purpose. Interestingly, Article 61 speaks about only trademarks and copyrights infringements, and not other IP infringements.

India being a signatory to the TRIPS, has incorporated article 61 in her Trademarks Act, 1999 as well as the Copyright Act, 1957. The other penal statutes that are to be read with while prosecuting are the Indian Penal Code and the Code of Criminal Procedure.

What Does “Applying of a Trade-mark” Mean?
Applying of trade-marks or trademarks descriptions on any goods or services means and includes woven, impressed on or otherwise worked into, annexed or affixed to, the goods or packaging.

Falsely applying a trademark means applying of a trademark in the above mentioned manner without the authorization of the owner(s) of the trademark. Falsifying a trademark can be done by either alteration or addition or effacement of a genuine trademark which makes it to be appearing as a deceptively similar trademark.  The penal punishment for falsely applying a trademark can extend anywhere between six months to three years and fine between ₹ 50,000 to ₹ 2, 00,000 (Indian Rupees). The burden of proof that the trade-marks were applied with the authorization of the owner lies on the accused (the supposed infringer).

Criminal Penalties for Trade-mark Infringement
The penalty for selling goods or providing services in order to facilitate the commercial use of falsely applied trademarks constitutes a criminal offense. The facilitator will be subjected to imprisonment of less than six months and or fine of less than ₹ 50,000. However the conviction would be subject to other grounds such as his/her innocence and other circumstantial evidences. Subsequent commission of the above mentioned two offenses would warrant enhanced penalties- imprisonment not less than one year and fine not less than ₹ 1, 00,000.

Representing a trade-mark as registered is an offense under the Trademarks Act. Any person falsely representing an unregistered trademark(s) as registered can be punished with an imprisonment extending up to three years. Interestingly there is no cap limit on the amount of fine (as compared to the above mentioned circumstances) that can be imposed in these instances.


What Else Falls Under “IP Crime”?
Not only the commercial use of counterfeit products constitute IP crime but fabricating the register of trade-marks (the record of all registered trademarks) or creating fake certificates as well invokes the penal provisions of the Trademarks Act resulting in imprisonment which can extend up to two years. In this case again, there is no upper limit for the amount of fine that can be imposed on the offender(s). Similarly, any person who reasonably leads other to believe that his place of business is officially connected with the Trademarks Office shall be punishable with an imprisonment which can extend to two years and or with fine with no upper limits.

Similar penal provisions for infringement of copyrights are provided in the Copyright Act with empowering the courts to order for imprisonment and or fine. Both the statutes authorize the investigating officer(s) to inspect and seize the infringing items without a warrant. Furthermore, search and seizure can be performed with only a reasonable belief of the investigating officer(s) and without waiting for the actual offense to be committed.

Conclusion
It is probably high time that the government should start thinking enforcing punitive damages against consumers willfully purchasing counterfeit goods? Establishing ‘individual purchaser’s liability’ has been in much discussion. Perhaps establishing the ‘intent and knowledge’ would be very tricky for the enforcement agencies. As long as the consumers are willing to purchase a fake or capable of being deceived into purchasing fakes there will be a desire by the criminals to exploit the opportunity and supply those goods.

Cover Image: “City of Skulls“, Courtney Rhodes, Flickr Creative Commons Attribution (CC 2.0 Generic Licence)

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About: Gokul Kamaraj

Gokul was called to the Bar in India and worked with one of the largest IP law firms in India. Currently, he is a graduate student at Osgoode Hall Law School, Toronto, and a NCA candidate. He is keen to qualify as a lawyer in Ontario and enjoys practicing in the areas of contentious and non-contentious Trademark laws.

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