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16 November 2017

Sale of grey goods is a criminal offence

A recent case before the UK Supreme Court has clarified whether a criminal offence is committed under the Trade Marks Act 1994 (“the Act”) if a defendant sells so-called “grey” goods as opposed to counterfeit goods bearing a registered trade mark.

Definitions

Counterfeit goods are those to which a trade mark has been applied without the owner’s consent e.g. a cheap running vest bearing the ADIDAS name but manufactured with no involvement of Adidas. Counterfeit goods are notoriously of poor quality and can be dangerous in certain sectors, such as pharmaceuticals and electricals.

Grey goods are those to which a trade mark has been applied with the owner’s consent but which have been put on the market in a specific territory without the owner’s consent. In other words, they are manufactured as genuine goods but are not being sold legitimately. There can be several reasons for this. For example, the goods might be rejects within an authorised run, or part of an overrun authorised by the manufacturer to make allowance for rejects, or simply genuine goods put on sale in a particular territory without authorisation.

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