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House Of Lords Ruling Clarifies Trade Mark Law

03 June 2003

In a landmark judgment delivered on May 22, (Regina v Johnstone) the House of Lords clarified section 92 of the Trade Marks Act 1994, the section commonly used by Trading Standards authorities to prosecute traders in counterfeit goods. Band names are often registered as trade marks to protect against illegal copies of sound recordings. Where a trade mark is infringed, for example on an unauthorised copy of a CD, trading standards officers have a statutory duty to act.

The Lords held that that the burden of proving the statutory defence under the Act rests upon the accused and that the prosecutor does not have to disprove that defence. Their Lordships said, "given the importance and difficulty of combating counterfeiting, and given the comparative ease with which an accused can raise an issue about his honesty, overall it is fair and reasonable to require a trader, should need arise, to prove on the balance of probability that he honestly and reasonably believed the goods were genuine".

The court went on to describe counterfeiting as "a serious contemporary problem" having "adverse economic effects on genuine trade. It also has adverse effects on consumers, in terms of quality of goods and, sometimes, on the health or safety of consumers".

Mr Johnstone had been found in possession of bootleg CDs of major recording artists including Bon Jovi, The Rolling Stones and U2. He pleaded guilty on October 27 1999 to 12 trade mark offences. He later appealed against conviction on the grounds that he had not been allowed to run certain defences, including the statutory defence under s92. The Court of Appeal allowed his appeal on January 31 2002. The Crown Prosecution Service subsequently appealed this decision and the court allowed the BPI to assist their Lordships as an intervener in this case.

Although the House of Lords dismissed the CPS appeal, ruling that Johnstone should have been permitted to run the defences he wished, their Lordships made it clear that Johnstone "would have had a difficult task in making good the defences on which he wished to rely".

BPI Director General Andrew Yeates said, "The BPI is pleased to have been involved in this final appeal and regards this as an important step forward in the ongoing fight against counterfeiting and piracy."

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