Organisations: Unauthorised use of a Trade mark - draft for consultation only

Trade Marks Act 1994, s.92
Effective from: to be confirmed (draft for consultation only)

Triable either way

Maximum: Unlimited fine
Offence range: £250 fine to £450,000 fine

Use this guideline when the offender is an organisation. If the offender is an individual please refer to the Individuals: Unauthorised use of a trade mark guideline.

User guide for this offence


Guideline users should be aware that the Equal Treatment Bench Book covers important aspects of fair treatment and disparity of outcomes for different groups in the criminal justice system. It provides guidance which sentencers are encouraged to take into account wherever applicable, to ensure that there is fairness for all involved in court proceedings.

Applicability

In accordance with section 120 of the Coroners and Justice Act 2009, the Sentencing Council issues this definitive guideline. It applies to organisations who are sentenced on or after the effective date of this guideline, regardless of the date of the offence.

Section 125(1) of the Coroners and Justice Act 2009 provides that when sentencing offences committed after 6 April 2010:

“Every court –

  1. must, in sentencing an offender, follow any sentencing guidelines which are relevant to the offender’s case, and
  2. must, in exercising any other function relating to the sentencing of offenders, follow any sentencing guidelines which are relevant to the exercise of the function,

unless the court is satisfied that it would be contrary to the interests of justice to do so.”

Structure, ranges and starting points

For the purposes of section 125(3)–(4) Coroners and Justice Act 2009, the guideline specifies offence ranges – the range of sentences appropriate for each type of offence. Within each offence, the Council has specified a number of categories which reflect varying degrees of seriousness. The offence range is split into category ranges – sentences appropriate for each level of seriousness. The Council has also identified a starting point within each category.

Starting points define the position within a category range from which to start calculating the provisional sentence. The court should consider further features of the offence or the offender that warrant adjustment of the sentence within the range, including the aggravating and mitigating factors set out at step four and the further set of factors that may require a final adjustment to the sentence at step five. Starting points and ranges apply to all offenders, whether they have pleaded guilty or been convicted after trial. Credit for a guilty plea is taken into consideration only at step seven after the appropriate sentence has been identified.

Step 1 – Compensation

The court must consider making a compensation order requiring the offender to pay compensation for any personal injury, loss or damage resulting from the offence in such an amount as the court considers appropriate, having regard to the evidence and to the means of the offender.

Where the means of the offender are limited, priority should be given to the payment of compensation over payment of any other financial penalty.

Reasons should be given if a compensation order is not made.

(See section 130 Powers of Criminal Courts (Sentencing) Act 2000)

Step 2 – Confiscation

Confiscation must be considered if either the Crown asks for it or the court thinks that it may be appropriate.

Confiscation must be dealt with before, and taken into account when assessing, any other fine or financial order (except compensation).

(See Proceeds of Crime Act 2002 sections 6 and 13)

Step 3 – Determining the offence category

The court should determine the offence category with reference to culpability and harm.

Culpability

The level of culpability is determined by weighing up all the factors of the case to determine the offending organisation’s role and the extent to which the offending was planned and the sophistication with which it was carried out.

A – High culpability

  • Organisation plays a leading role in organised, planned unlawful activity (whether acting alone or with others)
  • Involving others through pressure or coercion (for example employees or suppliers)

B – Medium culpability

  • Organisation plays a significant role in unlawful activity organised by others
  • Some degree of organisation/planning involved
  • Other cases that fall between categories A or C because:
    • Factors are present in A and C which balance each other out and/or
    • The offender’s culpability falls between the factors as described in A and C

C – Lesser culpability

  • Organisation plays a minor, peripheral role in unlawful activity organised by others
  • Involvement through coercion, intimidation or exploitation
  • Little or no organisation/planning
  • Limited awareness or understanding of the offence

Where there are characteristics present which fall under different levels of culpability, the court should balance these characteristics to reach a fair assessment of the offender’s culpability.

Harm

The assessment of harm for this offence involves putting a monetary figure on the offending with reference to the value of equivalent genuine goods and assessing any significant additional harm suffered by the trade mark owner or purchasers of the counterfeit goods:

  1. Where there is evidence of the volume of counterfeit goods sold or possessed, the monetary value should be assessed by taking the equivalent retail value of legitimate versions of the counterfeit goods involved in the offending;
  2. Where there is no evidence of the volume of counterfeit goods sold or possessed:
    1. In the case of labels or packaging, harm should be assessed by taking the equivalent retail value of legitimate goods to which the labels or packaging could reasonably be applied, taking an average price of the relevant products.
    2. In the case of equipment or articles for the making of copies of trade marks, the court will have to make an assessment of the scale of the operation and assign an equivalent value from the table below.

The general harm caused to purchasers, legitimate businesses and to the owners of the trade mark is reflected in the sentence levels at step two. Examples of significant additional harm may include but are not limited to:

  • Substantial damage to the legitimate business of the trade mark owner (taking into account the size of the business)
  • Purchasers put at risk of significant physical harm from counterfeit items
 

Equivalent value of legitimate goods

Starting point based on

Category 1

£1million or more or category 2 value with significant additional harm

 £2 million

Category 2

£300,000 – £1million or category 3 value with significant additional harm

£600,000

Category 3

£50,000 – £300,000 or category 4 value with significant additional harm

£125,000

Category 4

£5,000 – £50,000 or category 5 value with significant additional harm

£30,000

Category 5

Less than £5,000 and little or no significant additional harm

£2,500

Step 4 – Starting point and category range

Having determined the category at step one, the court should use the appropriate starting point (as adjusted in accordance with step one above) to reach a sentence within the category range in the table below. The starting point applies to all offenders irrespective of plea or previous convictions.

Where the value is larger or smaller than the amount on which the starting point is based, this should lead to upward or downward adjustment as appropriate.

The fine levels below assume that the offending organisation has an annual turnover of not more than £2 million. In cases where turnover is higher, adjustment may need to be made at Step 5 below including outside the offence range.

 

Culpability

Harm

A

B

C

Category 1

£1 million or more

 

Starting point based on £2 million

Starting point

£250,000

 

Category range

£150,000 – £450,000

Starting point

£100,000

 

Category range

£50,000- £200,000

Starting point

£50,000

 

Category range

25,000 – £100,000

Category 2

£300,000 – £1million

 

Starting point based on £600,000

Starting point

£150,000

 

Category range

£75,000 – £250,000

Starting point

£50,000

 

Category range

25,000 – £100,000

Starting point

£30,000

 

Category range

£15,000 – £50,000

Category 3

£50,000 – £300,000

 

Starting point based on £125,000

Starting point

£50,000

 

Category range

£25,000 – £100,000

Starting point

£25,000

 

Category range

£15,000 – £50,000

Starting point

£10,000

 

Category range

£5,000 – £25,000

Category 4

£5,000- £50,000

 

Starting point based on £30,000

Starting point

£25,000

 

Category range

£15,000 – £50,000

Starting point

£10,000

 

Category range

£5,000 – £25,000

Starting point

£5,000

 

Category range

£2,000 – £10,000

Category 5

Less than £5,000

 

Starting point based on £2,500

Starting point

£10,000

 

Category range

£5,000 – £30,000

Starting point

£5,000

 

Category range

£2,000 – £10,000

Starting point

£1,000

 

Category range

£250 – £5,000

 

Fines
  Starting point Range
Fine Band A  50% of relevant weekly income  25 – 75% of relevant weekly income
Fine Band B  100% of relevant weekly income  75 – 125% of relevant weekly income
Fine Band C  150% of relevant weekly income 125 – 175% of relevant weekly income
Fine Band D  250% of relevant weekly income 200 – 300% of relevant weekly income
Fine Band E 400% of relevant weekly income 300 – 500% of relevant weekly income
Fine Band F  600% of relevant weekly income  500 – 700% of relevant weekly income
  • The court should determine the appropriate level of fine in accordance with this guideline and section 164 of the Criminal Justice Act 2003, which requires that the fine must reflect the seriousness of the offence and that the court must take into account the financial circumstances of the offender.
  • Where possible, if a financial penalty is imposed, it should remove any economic benefit the offender has derived through the commission of the offence including:
    • avoided costs;
    • operating savings;
    • any gain made as a direct result of the offence.
  • The fine should meet, in a fair and proportionate way, the objectives of punishment, deterrence and the removal of gain derived through the commission of the offence; it should not be cheaper to offend than to comply with the law.
  • In considering economic benefit, the court should avoid double recovery.
  • Where the means of the offender are limited, priority should be given to compensation (where applicable) over payment of any other financial penalty.
  • Where it is not possible to calculate or estimate the economic benefit, the court may wish to draw on information from the enforcing authorities about the general costs of operating within the law.
  • When sentencing organisations the fine must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with the law.  The court should ensure that the effect of the fine (particularly if it will result in closure of the business) is proportionate to the gravity of the offence.
  • Obtaining financial information: It is for the offender to disclose to the court such data relevant to their financial position as will enable it to assess what they can reasonably afford to pay. If necessary, the court may compel the disclosure of an individual offender’s financial circumstances pursuant to section 162 of the Criminal Justice Act 2003. In the absence of such disclosure, or where the court is not satisfied that it has been given sufficient reliable information, the court will be entitled to draw reasonable inferences as to the offender’s means from evidence it has heard and from all the circumstances of the case. In setting a fine, the court may conclude that the offender is able to pay any fine imposed unless the offender has supplied financial information to the contrary.

The court should then consider further adjustment for any aggravating or mitigating factors. The following list is a non-exhaustive list of additional factual elements providing the context of the offence and factors relating to the offender. Identify whether any combination of these, or other relevant factors, should result in an upward or downward adjustment from the starting point.

Factors increasing seriousness

  • Previous relevant convictions or subject to previous relevant civil or regulatory enforcement action

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm or those inherent in the offence

    Guidance on the use of previous convictions

    The following guidance should be considered when seeking to determine the degree to which previous convictions should aggravate sentence:

    Section 143 of the Criminal Justice Act 2003 states that:

    In considering the seriousness of an offence (“the current offence”) committed by an offender who has one or more previous convictions, the court must treat each previous conviction as an aggravating factor if (in the case of that conviction) the court considers that it can reasonably be so treated having regard, in particular, to—

    (a) the nature of the offence to which the conviction relates and its relevance to the current offence, and

    (b) the time that has elapsed since the conviction.

    1. Previous convictions are considered at step two in the Council’s offence-specific guidelines.
    2. The primary significance of previous convictions (including convictions in other jurisdictions) is the extent to which they indicate trends in offending behaviour and possibly the offender’s response to earlier sentences.
    3. Previous convictions are normally relevant to the current offence when they are of a similar type.
    4. Previous convictions of a type different from the current offence may be relevant where they are an indication of persistent offending or escalation and/or a failure to comply with previous court orders.
    5. Numerous and frequent previous convictions might indicate an underlying problem (for example, an addiction) that could be addressed more effectively in the community and will not necessarily indicate that a custodial sentence is necessary.
    6. If the offender received a non-custodial disposal for the previous offence, a court should not necessarily move to a custodial sentence for the fresh offence.
    7. In cases involving significant persistent offending, the community and custody thresholds may be crossed even though the current offence normally warrants a lesser sentence. If a custodial sentence is imposed it should be proportionate and kept to the necessary minimum.
    8. The aggravating effect of relevant previous convictions reduces with the passage of time; older convictions are less relevant to the offender’s culpability for the current offence and less likely to be predictive of future offending.
    9. Where the previous offence is particularly old it will normally have little relevance for the current sentencing exercise.
    10. The court should consider the time gap since the previous conviction and the reason for it. Where there has been a significant gap between previous and current convictions or a reduction in the frequency of offending this may indicate that the offender has made attempts to desist from offending in which case the aggravating effect of the previous offending will diminish.
    11. Where the current offence is significantly less serious than the previous conviction (suggesting a decline in the gravity of offending), the previous conviction may carry less weight.
    12. When considering the totality of previous offending a court should take a rounded view of the previous crimes and not simply aggregate the individual offences.
    13. Where information is available on the context of previous offending this may assist the court in assessing the relevance of that prior offending to the current offence
  • Organisation or subsidiary set up to commit counterfeiting activity
  • Counterfeiting activity endemic within organisation
  • Purchasers put at risk of harm from counterfeit items (where not taken into account at step one)
  • Attempts to conceal/dispose of evidence

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm or those inherent in the offence

    The more sophisticated, extensive or persistent the actions after the event, the more likely it is to increase the seriousness of the offence.

    When sentencing young adult offenders (typically aged 18-25), consideration should also be given to the guidance on the mitigating factor relating to age and lack of maturity when considering the significance of such conduct.

    Where any such actions are the subject of separate charges, this should be taken into account when assessing totality.

  • Attempts to conceal identity
  • Failure to respond to warnings about behaviour

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm or those inherent in the offence

    Where an offender has had the benefit of warnings or advice about their conduct but has failed to heed it, this would make the offender more blameworthy.

    This may particularly be the case when:

    • such warning(s) or advice were of an official nature or from a professional source and/or
    • the warning(s) were made at the time of or shortly before the commission of the offence.

    When sentencing young adult offenders (typically aged 18-25), consideration should also be given to the guidance on the mitigating factor relating to age and/or lack of maturity when considering the significance of this factor.

  • Blame wrongly placed on others

Factors reducing seriousness or reflecting mitigation

  • No previous convictions or previous relevant civil or regulatory enforcement action

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm

    • First time offenders usually represent a lower risk of reoffending. Reoffending rates for first offenders are significantly lower than rates for repeat offenders. In addition, first offenders are normally regarded as less blameworthy than offenders who have committed the same crime several times already. For these reasons first offenders receive a mitigated sentence.
    • Where there are previous offences but these are old and /or are for offending of a different nature, the sentence will normally be reduced to reflect that the new offence is not part of a pattern of offending and there is therefore a lower likelihood of reoffending.
    • When assessing whether a previous conviction is ‘recent’ the court should consider the time gap since the previous conviction and the reason for it. 
    • Previous convictions are likely to be ‘relevant’ when they share characteristics with the current offence (examples of such characteristics include, but are not limited to: dishonesty, violence, abuse of position or trust, use or possession of weapons, disobedience of court orders).  In general the more serious the previous offending the longer it will retain relevance.
  • Offender co-operated with investigation, made early admissions and/or voluntarily reported offending

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm

    Assisting or cooperating with the investigation and /or making pre-court admissions may ease the effect on victims and witnesses and save valuable police time justifying a reduction in sentence (separate from any guilty plea reduction).

  • Business otherwise legitimate

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm

    Where the offending arose from an activity which was originally legitimate, but became unlawful (for example because of a change in the offender’s circumstances or a change in regulations), this may indicate lower culpability and thereby a reduction in sentence.

    This factor will not apply where the offender has used a legitimate activity to mask a criminal activity.

  • Little or no actual gain to organisation from offending
  • Lapse of time since apprehension where this does not arise from the conduct of the offender

    Effective from: 01 October 2019

    Care should be taken to avoid double counting factors including those already taken into account in assessing culpability or harm

    Where there has been an unreasonable delay in proceedings since apprehension which is not the fault of the offender, the court may take this into account by reducing the sentence if this has had a detrimental effect on the offender.

    Note: No fault should attach to an offender for not admitting an offence and/or putting the prosecution to proof of its case.