Two new sentencing guidelines for sentencing individuals or companies that sell or possess counterfeit goods intended for sale were published by the Sentencing Council today, following consultation.

Under the new guidelines, offenders who run a sophisticated operation or risk significant harm – including risk of serious physical harm or death to end users – will receive the highest level of sentences.

The new guidelines, which apply to using a trade mark without the owner’s consent contrary to section 92 of the Trade Marks Act 1994, will be used in all courts across England and Wales from 1 October 2021.

The guidelines will replace the current guideline published in 2008, which is used in magistrates’ courts and applies to individuals only. They will apply to adults only.

Sentencing Council member, District Judge Mike Fanning, said:

“Selling counterfeit goods may appear to be a victimless crime, but it harms not only the owner of the trade mark but also legitimate traders and – in some cases -can put the people who buy them at risk of serious harm.

“The new guidelines, which will for the first time apply to organisations, will  enable courts to impose sentences that are consistent and proportionate  in these cases which can be complicated and, by reason of the relative infrequency with which they come before the courts, unfamiliar  to many sentencers.”

Director of Policy for the Association of Chief Trading Standards Officers, Wendy Martin said:

 “We welcome these sentencing guidelines for the offence of unauthorised use of a trade mark which will ensure a consistency of approach in sentencing these often complex cases. Selling counterfeit goods is not a harmless activity and can have a significant financial impact on the trade mark owner and genuine traders while exposing consumers to dangerous or substandard products.”

The cases vary from the very unsophisticated such as selling a few obviously fake items on a market stall or online, to highly organised and profitable businesses manufacturing or importing a large quantity of high-quality counterfeit ‘designer’ goods. They may also relate to possession of labels or packaging bearing trademarks rather than the counterfeit goods themselves.

Typical counterfeit goods include clothes, shoes or handbags and belts, but could also include products like computer games, toys, cosmetics, cigarettes and tobacco, car parts and electrical equipment. Counterfeit goods are unlikely to have undergone the same safety tests as genuine goods and therefore may risk causing injury.

The new guidelines assess harm based on the monetary value of the counterfeit goods with reference to the retail value of equivalent genuine goods, with seriousness increased by any significant additional harm suffered by the trade mark owner, or risked by purchasers/end users of the counterfeit goods.

Notes to editors

1. There is currently a guideline for sentencing individuals convicted of the offence for use in magistrates’ courts (https://www.sentencingcouncil.org.uk/offences/magistrates-court/item/trade-mark-unauthorised-use-of-etc/), produced by the Sentencing Guidelines Council (SGC) in 2008 but there is no guideline for sentencing organisations and no guidelines for use in the Crown Court.
2. This is a relatively low-volume offence with around 370 adults and 40 organisations sentenced in 2019. It is an offence that sentencers are unlikely to have much experience of sentencing and the Council considered that comprehensive guidelines would therefore be of great assistance
3. Most of the cases apply to individuals and are heard in magistrates’ courts.
4. Most of the organisations prosecuted for trademark offences are relatively small businesses usually with only one or two director / owners, with an estimated annual turnover not more than £2 million.
5. An organisation that is a legal entity can be prosecuted for this offence and, on average, 30 are sentenced each year. The majority (67 per cent in 2019) are sentenced in magistrates’ courts.
6. An organisation cannot be sent to prison or given a community order and therefore the only sentences available are a fine or a discharge. The statutory maximum fine is unlimited.
7. In 2019, 36 per cent of adult offenders sentenced received a community sentence, 31 per cent received a fine, 17 per cent received a suspended sentence, 4 per cent were sentenced to immediate custody and 5 per cent were given a discharge. The remaining 6 per cent were ‘otherwise dealt with’, which includes disposals such as an order for forfeiture of property; one day in police cells; victim surcharge; confiscation order; compensation; and other miscellaneous disposals. In 2019 the average (mean) immediate custodial sentence length (after any reduction for a guilty plea) was 12 months, and no sentences exceeded 36 months
8. All new sentencing guidelines follow more recent Council guideline models and include a stepped approach to sentencing
9. Sentencing guidelines must be followed, unless the court is satisfied that it would be contrary to the interest of justice to do so in all the circumstances of a particular case.
10. Guidelines set sentencing ranges within the maximum for the offence as set out in current legislation. The guidelines are intended to reflect current sentencing practice for these offences.
11. The Sentencing Council was established by Parliament to be an independent body, but accountable to Parliament for its work which is scrutinised by the Justice Select Committee. Justice Ministers are accountable to Parliament for the Sentencing Council’s effectiveness and efficiency, for its use of public funds and for protecting its independence. Judicial Council members are appointed by the Lord Chief Justice with the agreement of the Lord Chancellor. Non-judicial council members are appointed by the Lord Chancellor with the agreement of the Lord Chief Justice.

For more information, please contact Kathryn Montague, Sentencing Council Press Office, on 020 7071 5792 / 5788 / 07912301657 or email press.office@sentencingcouncil.gov.uk