Home Adidas product Supreme Court rejects consumer error theory – Commentary

Supreme Court rejects consumer error theory – Commentary

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Facts
Background
Decision
Comment

On September 16, 2021, the second chamber of the Supreme Court dismissed for examination the cassation appeal lodged by the defendant against the judgment rendered by the Superior Court of Justice of Madrid, which had dismissed the appeal against the first convicting judgment. instance. proceeding by the Provincial Court of Madrid. The Madrid Provincial Court had sentenced the offender to imprisonment, a fine, payment of civil liability in favor of Adidas and costs (for details, please see “The Superior Court of Justice upholds the criminal conviction for wholesale and retail sale of fake clothing “).

Facts

This article deals with the cassation appeal brought by the defendant which gave rise to the recent Supreme Court decision. The respondent reiterated the allegations made in its previous appeal. In particular, he again insisted on a legal question of interpretation of the law for an alleged misapplication of articles 273 and 274 of the Penal Code relating to intellectual property infringements for infringement of registered industrial designs and registered trademarks. , respectively.

The defense argued once again that the facts declared as proven did not constitute an intellectual property crime since the seized products created no risk of confusion for potential consumers.

Background

The So-called “Consumer Error Theory” and Its Gradual Abandonment in Provincial Court Jurisprudence(1) was a case-law trend that for a crime to be committed, the characteristics of the illicit goods had to sufficiently mislead the potential buyer as to their authenticity. The theory has led to the pronouncement of acquittals in cases where the low quality of the counterfeit products, the low price at which they were marketed or the place where they were sold could not lead to this deception.

This theory of consumer error has its origins in certain Supreme Court judgments rendered under the old Criminal Code of 1973 in which an assessment was made to determine whether there had been a “fraud” of the type. described in the Code. In such evaluations, it was relevant to examine whether the consumer had been misled when purchasing a product with a counterfeit trademark.

However, the new Criminal Code of 1995 represented a paradigm shift for this type of crime. It aimed to protect the trademark right for what it was – namely a property right, and not for the protection of consumers (as was the case with “fraud” in the previous code). The only right legally protected in the current article 274 of the Criminal Code is the right to the exclusive and exclusive use or exploitation of an intellectual property right. It does not matter whether the use of another’s mark may mislead the consumer, as long as there is no unauthorized use of the mark by a third party.

Despite this reform, some provincial courts have continued to adopt the theory of consumer error.

Subsequent amendments to the penal code and the law on criminal procedure in 2015 led to an increase in the prison sentences for these crimes and a reform of the cassation appeal procedure in the criminal jurisdiction which allows the Supreme Court to be referred to the Supreme Court for cases. reasons for interpreting the law. Previously, this was not possible and therefore there was an inconsistency in the case law criteria for the same type of offense.

Decision

In this case, both the public prosecutor and the public prosecutor opposed the admission of the cassation appeal, asking, in the alternative, that it be dismissed.

Regarding the theory of consumer error, the Supreme Court has ratified and approved the findings of the Provincial Court of Madrid and the Superior Court of Justice of Madrid, stating that consumer error is not a requirement for a crime and that its assistance is irrelevant. , given that “the right protected by law in article 274 of the Penal Code is the exclusive use of the mark, to which the prestige or the commercial reputation of its owner is inextricably linked”.

The Supreme Court also held that:

the circumstances which would allow the consumer – at least potentially – to know that the product was not genuine (price and place of marketing), disappeared upon purchase of the goods and, therefore, they could not be seen by other potential consumers.

The Supreme Court confirmed that “it is not that the confusion must occur between the products, but rather between the registered trademark and the imitated sign”, as well as “the circumstances under which the customer purchases the product and which could to lead to consider that the product is not authentic is not relevant “because the aforementioned offense” does not punish a fraud against the final consumers, but rather an infringement of the holder of the intellectual property right “.

Comment

Since 1995, few Supreme Court resolutions have addressed this issue. Never before have two paragraphs been published with such clarity and force by the Supreme Court in its dismantling of this theory.

This Supreme Court ruling will certainly have a huge impact on the practice of combating counterfeiting and criminal litigation in the field of intellectual property crimes, in which the theory of unfortunate consumer error has been one major areas of conflict for years.

For more information on this topic, please contact Jordi Camo to Grau & Angulo by phone (+34 93 202 34 56) or email ([email protected]). The Grau & Angulo website can be accessed at www.gba-ip.com.

End Notes

(1) For more details, please see:


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