Counterfeit goods and fraud

18 August 2021

Not reviewed after the date of publication

Question:

I am currently dealing with an incident whereby two suspects were arrested after being found with a large quantity counterfeit goods, trying to be sold out of their vehicle. In interview both suspects stated the goods were fake and they were trying to sell them. I believe that a better charging decision would be articles for the use in Fraud- Sec 6 of the Fraud Act 2006.

However, would these articles (perfume and Airpods) fit the definition of 'Article' considering they are counterfeit goods.

Answer:

Fraud Act 2006

Section 2 of the Fraud Act 2006 (D16754 on PNLD) sets out one way of committing fraud under section 1 of the Act, namely fraud by false representation and provides:

“2(1) A person is in breach of this section if he –

(a) dishonestly makes a false representation, and
(b) intends, by making the representation –

(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.”

Section 6 of the Fraud Act 2006 makes it an offence for a person to possess or have under his control any article for use in the course of or in connection with any fraud.

Section 7 of the Fraud Act 2006 makes it an offence to make, adapt, supply or offer to supply any article knowing that it is designed or adapted for use in the course of or in connection with fraud, or intending it to be used to commit or facilitate fraud. "Knowledge" is a strict mens rea requirement. The House of Lords in Montila [2004] UKHL 50 said:

"A person may have reasonable grounds to suspect that property is one thing (A) when in fact it is something different (B). But that is not so when the question is what a person knows. A person cannot know that something is A when in fact it is B. The proposition that a person knows that something is A is based on the premise that it is true that it is A. The fact that the property is A provides the starting point. Then there is the question whether the person knows that the property is A."

In practice, the use to which the article can be put is likely to provide sufficient evidence of the defendant's state of mind and this could be achieved where a defendant presents counterfeit goods as genuine.

Trade Marks Act 1994

Section 92 of the Trade Marks Act 1994 provides a number of offences in relation to trade marks. In our opinion, depending on the exact circumstances, consideration could be given to an offence under subsections (b) or (c) which provide:

“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).”

Copyright, Designs and Patents Act 1988

Section 107 of the Copyright, Designs and Patents Act 1988 provides the offences for breaching copyright.

We would advise that officers liaise with the CPS at the earliest opportunity and provide them with the full facts of the case in order to obtain charging advice specific to their case.

Should the investigation involve pirate films we would also advise to contact FACT (https://www.fact-uk.org.uk/contact-us/) who will be able to assist. 

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