Court of Appeal confirms criminal offences cover the sale of "grey" goods

The Court of Appeal (Criminal Division) has recently confirmed that the sale of "grey" goods can be a criminal offence under the Trade Marks Act 1994 (TMA).

Genuine goods (in this case shoes and clothing) that had not been put on the market in the EU with the trade mark owner's consent were being sold in the UK.  Although there was no finding on the facts at this stage, the Court of Appeal has confirmed that criminal proceedings under s92 of the TMA are not limited to cases involving counterfeits (where the manufacture of the goods itself was unauthorised) but can also be brought for the sale of 'grey' goods (where the trade mark owner has consented to the manufacture of the goods but not the onward sale/distribution in the EU).

The criminal standard is of course higher than in civil cases, the obvious difference being the mental element; whilst stopping short of requiring dishonesty the relevant act must be done "with a view to" gain or causing loss. The Court of Appeal recognised that this may be particularly difficult to establish in the case of 'grey' goods and echoed the words of previous judges that "those who act honestly and reasonably are not visited with criminal sanctions".

Whilst private criminal prosecutions are likely to remain exceptional (in this particular case there was a suggestion of bogus investigations and forged documents), it is worth bearing in mind that such an action might be brought (or threatened) against directors of companies involved in grey market goods to provide additional leverage.