Trademark Piratism Problems

Rozenfelds & Partners


Rozenfelds & Partners
Latvia traditionally is listed among those EU countries that experience problems in protection of intellectual property.
Latvia Intellectual Property
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Latvia traditionally is listed among those EU countries that experience problems in protection of intellectual property. Usually it is considered that these problems are not related to the legislation, but rather to its application. Although it is true that before joining the EU, the legislation including that related to the intellectual property, was harmonized and recognized as compliant to the EU average level, the practice of combating piratical alcoholic beverages proves that the legislation is still full of defects.

Criminalisation problem of trademark piracy in Latvia

In the sphere of trademark piracy one has to face situations when obvious and intentional trademark infringements remain unpunished due to legislation or due to is extremely narrow interpretation. The illegal alcohol trade still makes up a remarkable portion in the Latvian shadow economy. Usually these activities are of an organizational character. To launch piratical production, empty alcoholic bottles are collected with respective labels, then filled in with vodka made of contraband spirits, and ensured with corks that are difficult to distinguish from the original ones; besides it is frequent that this piratical production is sold at official trade stores alongside with the legal alcohol. Elements of the organized crime are expressed here already through the fact that one person is not capable of ensuring appearance of such piratical goods on the market, besides in large amount. It is considered that approximately 10 – 20% out of the strong alcoholic beverages consumed in the country are of an illegal origin.

However no grouping has ever been called to liability in relations to such crimes. The irony of it is that law enforcement institutions have also failed to call to liability individual persons who not only were caught with a large number of counterfeit productions, but have also confessed in such crimes. Due to the defects in the existing legislation, the trademark forgers may be called to criminal liability only in case they have acted in the sphere of commercial activities. Although the Latvian legislation is familiar with the notion of illegal entrepreneurship and also envisages criminal liability for it, it has not yet been possible up to now to combine these two necessary elements so that the individual persons caught in trademark forgery are called to liability exactly for that crime they are charged with, namely for the trademark forgery expressed through commercial activities. It is clear that such gross expressions of piracy do not show up in a form of legal entrepreneurship. Consequently it turns out that it is more efficient to combat piracy in the form of legal entrepreneurship. Whereas, the combat against more brutal piracy in a form of an organized crime has not turned out to be successful by now. In difference from brutal piracy, there is a particular respondent in case of legal entrepreneurship – a legally acting company against which seizure may be applied.

Seizure of piratical goods

Seizure of piratical goods is possible already at the moment when the action is brought or even before bringing such action. The grounds for initiation of such activities are the court’s decision to secure a claim before raising the claim or simultaneously with raising such claim.

These activities have their own limits. The first condition to initiate such activities is existence of a respondent as such. As already mentioned above, it is frequent that we have to deal with as if a non-existent opponent in particularly gross trademark piracy cases expressed through individual activities. It is also often to face situations when the eventual respondent is ephemera, usually an offshore company whose only existence is a postal address. Yet alongside with piracy cases concerned with trademark passing-off bordering on the piracy or often qualified as the piracy, legal companies also practice such cases. It is exactly these companies that are effectively combated by the trademark seizure mechanism and later applied with compensation of damages.

Seizure may be carried out by a law enforcement officer based on the writs of execution and an application filed by the trademark owner on initiation of executive proceedings.

First, the law enforcement officer sends an invitation to the respondent to voluntarily discontinue distribution of the piratical goods, which costs LVL 24 (1.00 LVL = 0.702 EUR). Further expenses depend on the number of places where the seizure has to take place, as a list of the seized goods shall be drafted at each time of seizure.

It is frequent that the sale of the piratical goods is not concentrated in supermarkets, but instead such goods are delivered to small, yet many stores in quite small numbers. Thereof such type of delivery excludes a quick and cost effective seizure, as one has to deal with several trade stores having a small amount of the goods.

Expenses for the law enforcement officer to seize such goods draw up LVL 24 at each trade store. These expenses are influenced by the value of the goods to be seized and the number of the goods listed in the act of seizure, which is drafted at each trade store. Considering a price for a bottle of vodka in Latvia (LVL 2,00 – 3,00), the costs may exceed the value of the seized goods.

If the value for the goods to be seized varies from LVL 3001 - LVL 10000, the above sum will double; if from LVL 10001 - LVL 100000, it would triple; but if the value for the goods is more than LVL 100000 – it will increase five times.

In case the number of the goods to be seized exceeds 10 in the list of the seized goods, but is still below 50 – the costs of seizure at this trade store would be LVL 34,90, but if the number exceeds 50 – LVL 69,80.

These expenses of the law enforcement officer may be collected from the respondent provided that the judgement is favourable. The respondent’s interests are protected by the possibility to claim damages caused during the seizure if the action on the trademark infringement is dismissed against such respondent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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