R v M
| Jurisdiction | England & Wales |
| Judge | Lord Hughes,Lord Neuberger,Lord Mance,Lord Sumption,Lord Hodge |
| Judgment Date | 03 August 2017 |
| Neutral Citation | [2017] UKSC 58 |
| Court | Supreme Court |
| Date | 03 August 2017 |
[2017] UKSC 58
THE SUPREME COURT
On appeal from: [2016] EWCA Crim 1617
Lord Neuberger, President
Lord Mance
Lord Sumption
Lord Hughes
Lord Hodge
Appellant (M)
Henry Blaxland QC
Edward Henry
(Instructed by Stokoe Partnership Solicitors)
Appellants (C and T)
Michael Bromley Martin QC
Simon Baker
(Instructed by Stokoe Partnership Solicitors)
Respondent
Julian Christopher QC
Brian Nicholson
Joel Smith
(Instructed by CPS Specialist Fraud Division)
Heard on 19 June 2017
( with whomLord Neuberger, Lord Mance, Lord SumptionandLord Hodgeagree)
This is an interlocutory appeal in a criminal case which concerns the correct construction of section 92(1) of the Trade Marks Act 1994 ("the 1994 Act").
The appellants are a limited company and two individuals connected with its management. They are indicted for, inter alia, offences of unauthorised use of trade marks, contrary to section 92(1)(b) and (c) of the 1994 Act. No trial has yet been held, and the Crown case remains at this point a matter merely of allegation, which may or may not be proved. At a preparatory hearing in the Crown Court, they advanced a submission that part of what was alleged was, on any view, outside the terms of section 92 and no offence. Both the trial judge and the Court of Appeal (Criminal Division) rejected that submission. They renew it in this court.
What is alleged is that the defendants are engaged in the bulk importation and subsequent sale of goods such as clothes and shoes. The goods, or many of them, are said to bear what appear to be the trade marks of well-known brands, such as Ralph Lauren, Adidas, Under Armour, Jack Wills, Fred Perry or similar. The goods were manufactured abroad, in countries outside the EU.
Some of the goods in the possession of the defendants are said to have been manufactured by people who were neither the trade mark proprietor, nor authorised by the proprietor to make them. This first category of goods, the appellants describe as counterfeits in the true sense.
A significant portion of the remainder of the goods are, however, ones where there had originally been an authorisation of manufacture by the registered trade mark holder, whether by subcontract, licence or otherwise, but whose sale had not been authorised by him. They were thus sold, bearing the trade mark, without the consent of the owner of the mark. The causes of the non-authorisation of sale might be, it is said, various. Some garments might deliberately have been made by the factories in excess of the numbers permitted by the trade mark owner, so that the balance could be sold for their own benefit. Some might have been made in excess of the order without that original ulterior intention (indeed perhaps as precautionary spare capacity planned and approved by the trade mark owner), but then have been put on the market without his consent. Some might have been made under a permission which was cancelled by the trade mark owner; that in turn might include cases where the trade mark owner was dissatisfied with the quality and not prepared to have the goods put on the market as if their own, but cancellation might not be limited to that cause. Those are not exhaustive of the possibilities. These latter various types of goods are described by the appellants as goods appearing on the "grey market".
It is common ground that neither the indictment nor the way the Crown puts its case distinguishes between these various different provenances. That led to submissions that the indictment would turn out either to be bad for duplicity or to be misleading, and at risk of producing verdicts which it was difficult to interpret. Thus was the point now at issue identified.
In short, it is common ground that:
(i) before there can be a criminal offence of unauthorised use of a trade mark there must be an infringement of that mark which would be unlawful as a matter of civil law; see R v Johnstone [2003] UKHL 28; [2003] 1 WLR 1736; and
(ii) the sale, or the possession in the course of trade, of goods of any of the various provenances set out in para 5 above, would amount to an infringement of trade marks, giving rise to civil liability.
But the appellants' case is that whilst any of the various provenances set out would involve civil liability, it is only in the case of what they describe as true counterfeits that there is any criminal offence. They say that goods which were originally manufactured with the permission of the trade mark proprietor, but which are ones where he has not authorised the sale, are not true counterfeits and are not within the statute. Section 92(1) does not apply, they contend, to goods put on the grey market.
The resolution of this contention depends on the true construction of section 92(1) of the 1994 Act. It says:
" 92.—(1) A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor —
(a) applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or
(b) sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears, such a sign, or
(c) has in his possession, custody or control in the course of a business any such goods with a view to the doing of anything, by himself or another, which would be an offence under paragraph (b)."
Subsection 92(5) adds a reverse onus statutory defence:
"(5) It is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark."
The appellants' contention focuses on the use of the expression "such a sign" in subsection (1)(b). That refers back, they say, to subsection (1)(a). And by referring back to (1)(a), they say, it means that (b) applies only to goods where the relevant sign (ie trade mark) has been applied without the consent of the proprietor. Any goods in the "grey market" category have had the trade mark originally applied with the consent of the proprietor. It is only the sale which the proprietor has not authorised. Therefore, they say, those goods are not ones to which paragraph (a) of the subsection could apply. It follows, they contend, that they are not, when it comes to paragraph (b), goods which bear "such a sign".
It may readily be agreed that the expression "such a sign" in section 92(1)(b) refers back to the sign described in the immediately preceding paragraph (a). The difficulty comes when one is asked to read "such a sign" as incorporating the words "without the consent of the proprietor" which appear in the first few lines of the section before (a), and also the requirement that the sign has been applied to the goods (without such consent), which is the central component of the offence under (a). This is simply not a possible construction of section 92(1). There is no difficulty, on the ordinary reading of paragraphs (a) and (b), in seeing what the reference back to "such a sign" in (b) imports from (a). "Such a sign" in (b) plainly means a sign such as is described in (a). The sign described in (a) is a sign which is "identical to, or likely to be mistaken for, a registered trade mark". Signs (or trade marks) having any of the provenances described in para 5 above are squarely within this description. So-called grey market goods are caught by the expression.
The offences set out in paragraphs (a), (b) and (c) of section 92 are, as a matter of plain reading, not cumulative, but separate. It is not necessary that one has been committed (by someone) before one can say that the next in line has been. The mental element of a view to gain or the intent to cause loss is applicable to all three....
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