Local Trading Standards Authorities (TSAs) are principally responsible for investigating and prosecuting IP crime in the UK. TSAs have statutory duties to enforce certain statutory offences including those set out below.

The police and crown prosecution do not generally prosecute such offences but may play a supportive role when TSAs exercise their powers of entry and search, or where there is other serious criminal activity associated with intellectual property (IP) crime. The National Crime Agency (based in the City of London Police) is tasked with serious or organised crime. 

Although not commonly understood, private individuals or companies can bring private prosecutions in the criminal courts. They are subject to the same obligations as public authorities and have a duty to act fairly and independently. Private prosecutions are rare but remain an option. 

UK Border Force and Her Majesty’s Revenue and Customs (HMRC) also play a role in detecting and detaining goods and may get involved if there are significant excise issues, e.g., in relation to tobacco or alcohol products.

According to statistics from the Ministry of Justice, during 2020, 180 people were found guilty of offences under the Trade Marks Act 1994 (TMA) and one under the Copyright, Designs and Patents Act 1988 (CDPA). This compared with 401 and 23 in the previous year. 

The most common intellectual property offences are under these statutory provisions:

• Section 92 Trade Marks Act 1994: Unauthorised use of a trade mark in relation to goods. These offences relate to counterfeit goods that infringe trade marks. A person commits an offence if, with a view to gain for himself or another, or with the intent to cause loss to another and without the consent of the rights holder, applies to goods or packaging an identical sign, or one likely to be mistaken for, a registered trade mark; sells, hires or deals in such goods, packaging or advertising etc.
• Section 107 and 198 Copyright Designs and Patents Act 1988: Criminal liability for making or dealing with infringing articles, and criminal liability for making, dealing with or using illicit recordings. These offences include making and dealing in infringing copies of copyright works, i.e., pirated goods, unlawful streaming and downloads of copyright works and recordings.
• Section 35ZA Registered Designs Act 1949 (RDA): Unauthorised copying etc., of design in the course of business. These offences relate to the intentional copying of registered designs, making and dealing in such copied products. 
• Other offences. There are no specific offences relating to patents or unregistered designs but other statutes and common law offences may be relevant. One such statute is the Fraud Act 2006, which creates offences out of making dishonest representations and for making, supplying or possessing articles used in connection with the commission of a fraud. 

Process

Prosecution of IP offences normally begins with the “laying of an information” in a Magistrates Court. One challenge over civil proceedings is a higher evidential burden; to prove all necessary facts beyond reasonable doubt for a conviction. In prosecuting offences, rights holders will be required to provide evidence to assist in proving ownership of IP rights and infringement. However, the prospect of a custodial sentence and criminal record may afford a more powerful outcome and public deterrence. 

Penalties

Generally, these offences are punishable on summary conviction (i.e., at the Magistrates Court) by a prison sentence of up to six months and/or a GBP 5,000 fine, or in more serious cases (at the Crown Court) by a prison sentence of up to 10 years and/or a fine. 

Confiscation Orders

After conviction, the prosecution, or the Crown Court of its own motion, can institute confiscation proceedings seeking an order that the infringer pay a sum equal to the proceeds of their crime.

It may be important to bear in mind that the criminal courts are not specialised in intellectual property matters. However, the civil courts do have judges that are specialised in intellectual property with their own dedicated court lists and courts to sit in. 

The TMA, CDPA and RDA contain the provisions that apply to cases involving infringement of trade marks, copyright and registered designs respectively. Claims for infringement of each of them can be prosecuted in the Civil Courts of England and Wales. Northern Ireland has its own jurisdiction and Scotland has a different court system too. 

The Intellectual Property and Enterprise Court in England and Wales is intended to provide access to small and medium sized enterprises and individuals. It is intended for shorter, less complex and less valuable claims (less than GBP 500,000 damages). It has cost rules that limit the amount of recoverable costs and imposes a cap of GBP 60,000. The Intellectual Property List and the Patents Court deal with more difficult and valuable claims, whose value exceed GBP 500,000.

In England and Wales, the framework for civil enforcement is provided for in the Civil Procedure Rules and Practice Directions. 

The final remedies available in each court include injunction, delivery up or destruction of infringing goods, damages or (at the claimant’s election) an account of profits derived from the infringing acts, and (in some cases) publication or other declaratory relief, in addition to legal costs. Punitive damages are not generally available though there are damages available for flagrancy in cases of blatant copying. 

Applications can be made for urgent interim injunctive relief and other interim remedies are also available, such as Norwich Pharmacal Orders, to obtain the names and contact details of wrongdoers, orders for pre-action disclosure of other information against wrongdoers (or third parties), and orders for the preservation of evidence.

In prima facie cases it is possible to apply for an order allowing entry onto premises to search for and seize evidence and materials; particularly where there is a real risk a wrongdoer will dispose of these. The draconian nature of search-and-seizure orders means that there are strict requirements for their execution, including the supervision of an independent solicitor.

Unlike counterfeits, grey goods are authentic goods diverted from official distribution channels and sold without the trade mark owner’s consent in a different country; usually because of a price advantage in the destination country.

Rights holders/owners cannot object to the resale of goods in the European Union (EU) or the UK which were first put on sale in the EU by the rights holder, or with its consent. The trade mark rights are said to be "exhausted" in those two situations. This can lead to significant loss of revenue and impact brand value and perception too; particularly where goods are sold through the wrong channels or in the wrong packaging.

Following a consultation on the future of exhaustion of rights in the UK, the UK government announced in January 2022 that no imminent changes will be made to the current unilateral application of the European Economic Area (EEA) exhaustion regime. In practice this means that parallel imports from the EEA into the UK can continue but parallel exports from the UK to the EEA can be prohibited. Therefore, rights holders can take civil action for grey goods in the UK from outside the EEA but not from within it, although if the goods do not meet with other applicable laws in the UK (e.g. relating to product safety) then separate action may be taken in those respects. 

Criminal action might also be taken in respect of unlawful grey goods, as the Court of Appeal confirmed in R v. C and others (2016) EWCA Crim 1617.

There are advantages in requiring TSAs to undertake their duty to investigate and take enforcement action against counterfeits. This is principally because these activities are at the public’s expense. Moreover, TSAs have a broad range of investigatory statutory powers, which rights holders looking to take action do not have, such as powers to enter and search premises, inspect documents, request the production of documents or products, seize and test products, and so on. 

However, where local authority budgets are under pressure it may not be easy to persuade local TSAs to take action, except in the more serious or meritorious cases.

Correspondingly, taking civil action can be relatively expensive and costs can be high, particularly when pursuing ex parte search and seize applications. Also, the costs of proceedings may not be recoverable.

While criminal prosecutions can be quicker sometimes, the different standards of proof (beyond reasonable doubt in criminal proceedings), and corresponding care over evidential requirements, can make them more difficult than proceeding in the civil courts, where proving infringement is decided on a balance of probability.

Also, in the case of Border Control seizures, civil proceedings are a pre-requisite to the retention of goods where the seizure is contested by the importer. 

Counterfeit activity is prevalent across all sectors including clothing, beauty and cosmetics, toys and pharmaceuticals. In recent years, beauty and hygiene products have become a target for counterfeiters with fakes appearing to be almost identical to the genuine product. Not only is this an issue for rights holders but a serious issue for the health and safety of consumers, and the environment too. 

Operation Rivean, a UK Border Force operation which took place in the run-up to Christmas 2023, saw Border Force officers seize 250 counterfeit Dyson haircare products (retail value for genuine goods would have been in excess of GBP 98,000); 120 counterfeit GHD hair-styling tools (valued at GBP 31,980); and 640 non-branded hair straighteners. Border Force officers found that the non-branded hair straighteners did not meet health and safety laws and standards and therefore posed a safety risk. It is estimated that 98% of counterfeit electrical goods are not fit for purpose because they do not meet safety standards, putting the consumer at an increased risk of injury or harm. 

In early 2024, the UK Intellectual Property Office (UKIPO) launched the awareness campaign “Choose Safe Not Fake”. The campaign was launched after findings that a large proportion of consumers purchasing counterfeits wrongly assumed that they were produced in the same or similar environments to the genuine goods. Whereas the opposite is true: conditions are poor and unsanitary, and often the products contain harmful and carcinogenic ingredients. The aim of the campaign is to raise awareness of the dangerous ingredients present in counterfeit goods (as well as the detrimental working conditions for those producing them) and encourage consumers to make more informed buying decisions and reduce their desire to purchase counterfeit goods. 

Similarly, the Chartered Trading Standards Institute (CTSI) launched the campaign “#CostofBeauty” aimed at warning consumers about the potential dangers of using certain illegal and unsafe cosmetic products including UV gel, nail kits, skin lightening creams and teeth whitening kits.

Counterfeit activity remains a problem for online marketplaces and brick-and-mortar establishments. However, the rapid growth of social commerce will, undoubtedly, expand the arena for counterfeit activity. According to the 2024 report from Retail Economics in partnership with TikTok, the social commerce market in the UK (sometimes referred to as “live shopping”) is projected to double in size over the next four years reaching GBP 15.7 billion by 2028 (see https://newsroom.tiktok.com/en-gb/retail-economics-report and www.issuu.com/tiktokforbusinesseu/docs/thepowerofsocialcommerce-retiktok-fullreport). This statistic is perhaps unsurprising given that 90% of adults in the UK (around 48 million people) are active users on social platforms, each spending an average of 2 hours 42 minutes per day on these platforms. 

These days consumers are more likely to browse and discover new brands and products on social media platforms than via internet search engines, or brand websites. This is the starting point for the social commerce journey. Unlike the typical e-commerce sites, social commerce allows consumers to discover and research new products, purchase products in the app, watch real time reviews, demonstrations and “unboxing” experiences by brands and content creators, and then maintain engagement with the brand or influencer post-purchase. Social commerce brings together social media, brands, products, content creators and consumers in an interactive and immersive way.

Community commerce (a sub-category of social commerce) takes the shopping experience one step further: the emphasis is placed on content creators and the creation of a community connection. Content creators are encouraged by brands to create genuine and authentic content demonstrating the product(s) in their daily lives, for example, by way of live streaming. The immersive nature of live shopping often leads to higher conversion rates and increased sales as well as a greater sense of rapport and trust in the brand (and usually an increased chance of transforming consumers into loyal brand advocates). 

Brands and content creators must stand out from the crowd to maintain consumer interest. This is often achieved by actively seeking out new and “trendy” ways to present their products, leveraging storytelling, visual appeal and the consumer’s fear of missing out or “FOMO”. 

TikTok Shop, the social commerce platform from TikTok, celebrated a recent success story with one of its UK-based TikTok accounts. The account, Made by Mitchell, boasting over 25.8 million likes on TikTok and praised by followers for their authentic marketing and demonstrations, became the first UK beauty business to earn USD 1 million in a day on the TikTok Shop (see www.cosmeticsbusiness.com/made-by-mitchell-on-making-one-million-on-tik-tok-shop). Made by Mitchell sold one cosmetic product every second during the brand’s 12-hour live-streaming event in June 2024 as part of TikTok Shop’s live summer sale. 

As content creators and influencers take on more prominent roles in the advertising and marketing of brands and products, it makes it difficult for rights holders to track who is a genuine content creator or influencer (paid or otherwise) and who is counterfeit. This shopping revolution not only requires rights holders to “stay ahead” and evolve new marketing strategies, but it also requires an increased vigilance to new counterfeit activities.

The question has been posed as to whether ‘look-alike’ products, often promoted on social media by entrepreneurial businesses and influencers alike, have contributed to a rise in counterfeit goods. 

It is common in the UK for retailers to offer own label products which are benchmarked against branded goods that meet the same intended need or purpose; and therefore have similar characteristics and/or similar (if not identical) ingredients or composition. Similarly, suppliers of such merchandise are motivated to offer such goods because for retailers they create competition in the market and offer lower priced alternatives to branded goods that otherwise consumers might not buy. 

Where such goods comprise similar packaging, they are sometimes disparagingly referred to as “look-a-likes”. However, they are not the same as counterfeit goods because they do not confuse or deceive the consumer into believing that they are a brand owner’s goods by being a fake copy. 

In recent times there have been inflationary pressures on consumer spending that might contribute to an increase in the purchase of own label products over branded goods. Such pressures may have also caused an increase in counterfeit goods in some sectors; but it does not follow that an increase in ‘look-alikes’ would contribute to an increase in counterfeits. To the contrary, although we are not aware of any evidence to support any correlation between the two, if there were any, one would expect the opposite, and for cheaper ‘look-alike’ products to result in lower numbers of counterfeits. However, at the end of the day such products are different in nature for the reasons above and so any correlation is not likely. 

The role that online marketplaces play in the prevention of counterfeit goods has been widely discussed and continues to evolve. The high-profile case Louboutin v. Amazon Europe Core Sàrl and others ((Joined Cases C‑148/21 and C‑184/21) EU:C:2022:1016 (2022)) suggests a shift of responsibility may be on the horizon. Louboutin sued Amazon (in Luxembourg and Belgium) for trade mark infringement of the EUTM registration for the red colour applied to the sole of a high-heeled shoe. Louboutin’s claim arose from Amazon’s listings for shoes (claimed to be counterfeit) on the Amazon website, which incorporated an online marketplace for third-party sellers. Following questions referred by courts in Luxembourg and Belgium, the European Court of Justice (ECJ) held that the operator of an online sales website incorporating an online marketplace for third party-sellers as well as that operator’s own sales offerings, could be regarded as itself using a sign where third-party sellers offered for sale on that marketplace, without the EUTM owner’s consent, such goods bearing that sign, if a well-informed and reasonably observant site user established a link between the operator’s services and the sign. The ECJ did not definitively rule on whether, under the Amazon marketplace model, Amazon was itself infringing the EUTM because third-party sellers were selling goods bearing that EUTM (a matter for the national courts). However, the ECJ noted that to be able to rely on the hosting defence under Article 14(1) of the E-Commerce Directive, an operator must play a merely neutral and technical role and not actively contribute to providing public access to protected content (see L’Oréal SA and others v. eBay International AG and others (2011) Case C-324/09). In L’Oréal the ECJ held that an active role in offers of infringing goods placed on an operator’s website would include assisting in matters of presentation to consumers or promotion of listings. 

There may not have been any recent legislative changes in favour of rights holders, but the Police Intellectual Property Crime Unit (PIPCU) continues to act as a useful resource. Please refer to Section 8, below, for further details on PIPCU. 

Online marketplaces in the UK (such as Amazon, Facebook Marketplace and Ebay), and others based abroad (such as Aliexpress, Baidu, DHGate and Taobao), continue to be the most problematic for the sale of counterfeit goods online. However, social media platforms offering shopping functionality are an increasing threat in relation to unchecked product and the promotion of counterfeit products – see further discussion below. 

Domain names are often used as an instrument for fraud and to commit brand abuse; whether used to host phishing websites, to send phishing emails and/or to promote counterfeit goods or to perpetrate other ‘cybercrimes’ and financial frauds. 

Civil action, including applications for injunction, can be made to restrain infringements online just as they can in relation to the sale of counterfeit and pirated goods in physical marketplaces. While action can be taken against primary infringers and third-party hosting intermediaries on notice, such measures may not be effective against those primary offenders who simply move hosting of the infringement to another place online and/or to another jurisdiction. 

Therefore, in certain circumstances rights holders may prefer to target the Internet Service Provider (ISP) responsible for providing access to infringing content or goods. Section 97(1) CDPA provides jurisdiction for the UK courts to grant blocking-orders requiring ISPs to block access to websites and other locations online. In Twentieth Century Fox Film Corp. and others v. BT plc (2011) EWHC 1981 (Ch) the court granted injunctions requiring BT to block access to the Newsbin website which contained infringing copyright material. The jurisdiction has also been used to block live-streaming infringing content in FA Premier League v. BT and others (2017) EWHC 480 (Ch). 

ISPs may also be required to block access to websites that advertise and sell counterfeit goods as was established in the case of Cartier International AG and others v. British Sky Broadcasting Ltd and others (2014) EWHC 3354 (Ch). 

In Nintendo Co Ltd v. Sky UK Ltd (2019) EWHC 2376 (Ch) the High Court also affirmed that it had jurisdiction to grant injunctions blocking websites selling devices that enabled the circumvention of technical protection measures on Nintendo’s games console.

ISPs must have knowledge of the infringement and therefore generally it is necessary to put them on notice of the infringement. Also, the duration of any order will be for a fixed period of time and the cost of implementation will be borne by the rights holder. 

Google delisting, abuse complaints to Domain Name System hosts and website hosts are all within the toolkit of those seeking to combat these activities in the UK, as with elsewhere. In addition, complaints can be made under the relevant Registrar’s Dispute Resolution Service (DRS). 

The Nominet Dispute Resolution Service (Nominet DRS) manages disputes concerning UK country code domains. To succeed with a complaint the rights holder must prove that the domain name is identical or confusingly similar to a mark in which they have legitimate rights, such as a registered trade mark, and to show that registration of the domain name was abusive and/or that the domain is being used in an abusive manner. The threshold for success is seemingly lower than that required in domain disputes before the Uniform Domain Name Dispute Resolution Policy (UDRP) (where evidence that use and registration of the domain has been made in bad faith must also be provided).

The relief sought is usually the same: to seek transfer of the domain name. However, this is not immediate, although summary decisions are available in cases where no defence is filed. Where it is possible to identify a culprit through a disclosure request then separate civil action can be taken.

In the UK, Nominet will also suspend use of a domain name if the police or other law enforcement agency provide evidence that the domain is being used for criminal activity (or when criminal activity is suspected). In serious cases other relief may be sought from the court.

Typosquatting (where fraudsters acquire domains containing minor differences and/or misspellings to that of the genuine domain) is more prevalent in some sectors than others, typically where there are potentially larger financial gains. For example, the financial services sector may be seen as particularly vulnerable. Purchase fraud is a growing problem with fraudsters seeking to capitalise on consumers’ typically low degree of attention to minor differences between domain names, or subtle differences on fake sites. The creation of new domain extensions (e.g., TLDs) offers more choice and range. The greater number of domains available to purchase means that there is more opportunity for a counterfeiter to purchase and host a fake website or online shop. However, new top level domains are not widely in use by brands and therefore may be less attractive to fraudsters where more subtle typosquats are possible with the top level domains or specific country code domain that the relevant public might expect to see. 

For other businesses, it is not the concern of counterfeit goods or services but the consumer’s private data shared with website operators. It came to light recently that some consumers in Europe and the United States had been impacted by a deceptive network of fake online designer shops operated from China (see www.theguardian.com/money/article/2024/may/08/chinese-network-behind-one-of-worlds-largest-online-scams). The investigation found that around 800,000 people had provided personal names, phone numbers, email addresses, postal addresses and some even sharing their debit and credit card details and security numbers. The investigation revealed that the network used expired domains to host fake shops with around 76,000 created. However, most consumers involved were not financially impacted (some payments were blocked by their banks, or never taken) and the ordered goods never materialised. Rather, the investigation suggests that the websites were focused on obtaining personal data over trading counterfeit goods. 

Until governments make scam prevention a genuine priority, the onus is on the rights holder to ensure that they have appropriate enforcement processes in place to act quickly e.g. domain watches, online monitoring, and marketplace detection with appropriate takedown actions and proceedings. 

The increase in online shopping and social commerce, the boom in influencer/creator marketing, the use of technologies such as Augmented Reality, and introduction of chat bots have elevated social media channels and online marketplaces and, in doing so, created new channels of opportunity for counterfeiters and their dealers. 

In December 2021 the UKIPO published the results from a pilot study conducted of 1,000 female UK consumers who use social media: 

• 17% of participants purchased a counterfeit product online; 
• 70% of them were aged between 16 and 33; and 
• 10% of participants were prompted by social media content and influencers to buy counterfeit products. 

It follows that the use of online detection, and increased use of social media takedown processes, are increasingly important features of any anti-counterfeit strategy. 

Unlike the EU, there is no current legislation in place relating to the use of AI. However, the UK government published a white paper on AI regulation in March 2023, which set out a framework for regulation of AI (see www.gov.uk/government/publications/ai-regulation-a-pro-innovation-approach/white-paper#executive-summary). The framework comprises five principles to be applied across different sectors, including: 

• safety, security and robustness; 
• transparency and explainability; 
• fairness; 
• accountability and governance; and 
• contestability and redress. 

The aims of the framework were to drive growth and prosperity, increase public trust, and strengthen the UK’s position as a global leader in AI. A number of regulators were required to provide guidance according to the framework. 

The Competition and Markets Authority (CMA) published a strategic update in which it identified risks to consumers through price fixing, exploitation of consumers with targeted advertising and the promulgation of misleading information, amongst other things (see www.gov.uk/government/publications/cma-ai-strategic-update/cma-ai-strategic-update#the-cmas-approach-to-ai-risks). It aims to protect consumers from unfair practices facilitated by AI, ensuring transparency and accountability. In this context the CMA may have a role to play in combatting false advertising, phishing scams and the promotion of counterfeits online. Similarly, in the financial services sectors, the Financial Conduct Authority (FCA) responded to the government white paper in April 2024 (see www.fca.org.uk/publications/corporate-documents/artificial-intelligence-ai-update-further-governments-response-ai-white-paper). The FCA’s stated aims are to ensure that markets function well, protect consumers, enhance integrity and promote competition. It is investing in AI to enhance its own regulatory capabilities and in collaborating with other regulators it is focussed on the safe and responsible use of AI in UK financial markets. 

Recognising the potential for AI to cause consumer harm in the processing of personal data, the Information Commissioner’s Office (ICO) is another important regulator who with the CMA, FCA and Ofcom formed the Digital Regulation Cooperation Forum (DRCF) (see www.gov.uk/government/collections/the-digital-regulation-cooperation-forum).

The ICO published its strategic approach in response to the white paper in April 2024 (see www.ico.org.uk/media/about-the-ico/consultation-responses/4029424/regulating-ai-the-icos-strategic-approach.pdf). It believes many of the principles of data protection law mirror those in the framework and it says it will continue a long tradition of regulating in this field within the existing collection of data protection laws. A new law under the Data Protection and Digital Information Bill has been proposed to further regulate processing of personal data, the security of electronic communications and electronic signatures amongst other things (see www.bills.parliament.uk/bills/3430). However, it is not entirely clear whether this is supported by the new Labour government, and it may be subject to change. The ICO provides substantial guidance on its website for further reading (see www.ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/artificial-intelligence/guidance-on-ai-and-data-protection).

When it comes to the creative sector, and the potentially unlawful exploitation of copyright works, whether in training www.lawgazette.co.uk/obiter/from-handwritten-law-report-to-ai/5119053.articleAI generative models or in their output, the UKIPO working group was unable to reach agreement on a voluntary code of practice for copyright and AI. At the time of writing the current position appears to be that AI developers and the creative sectors are expected to work it out between themselves within the existing law.

Following the General Election in July 2024, much may change with the new Labour government in the UK. Peter Kyle MP, the newly appointed Secretary of State for the Department of Science, Innovation and Technology (DSIT), is reported to have said that the Labour government would be ready to legislate on AI, particularly around the safety of Frontier AI systems. Within DSIT sits the AI Safety Institute (AISI), which is a research organisation whose aim is to equip governments with an understanding of the safety of advanced AI systems. 

And as if that does not provide sufficient further reading, for readers who are lawyers, the Solicitors Regulation Authority in England and Wales has published a Risk Outlook report on the use of AI in the legal market (see www.sra.org.uk/sra/research-publications/artificial-intelligence-legal-market). How far we have come since the first law reporting in 1189! (See https://www.lawgazette.co.uk/obiter/from-handwritten-law-report-to-ai/5119053.article.)

The impact of emerging technologies like AI and blockchain seem likely to be mixed. No doubt we shall see the technology usefully employed in the detection and reporting of counterfeits through image recognition or natural language processing, and in facilitating IP rights management. Another example comes from the Medicines and Healthcare products Regulatory Agency (MHRA) who in their strategic approach to AI announced a tool for identifying fake or illegal medicines and devices on marketplaces (see www.gov.uk/government/publications/impact-of-ai-on-the-regulation-of-medical-products). However, the inherent privacy concerns associated with the large datasets required, and risks of false positives for infringement detection, will also be issues to tackle across different sectors.

The ICO acknowledged in its response that many AI risks sit outside of data protection law. It cites the threat to national security and election integrity from deepfakes. These along with more serious non-consensual uses of deepfake technology will fall to be dealt with under new laws and the creation of new criminal offences such as the last UK Government’s proposal to criminalise making a sexually explicit deepfake image. (The Criminal Justice Bill ran out of parliamentary time. However, section 187 Online Safety Act 2023 makes it an offence to share unwanted sexually explicit photos which would include deepfakes.)

Within the scope of counterfeiting and piracy, the legal issues are more likely to arise in the context of creating fake video or sound recordings, false endorsement, or breach of image rights (passing off). To date, celebrities appear to be the main targets for misleading advertising and use in the promotion of products and services (genuine or otherwise). Advertising regulation, the laws on intellectual property discussed elsewhere in this chapter, privacy and defamation laws are most likely to be engaged in this area. 

The prevalence of deepfakes are not day-to-day issues for most, perhaps because many deepfakes are not yet perfect, but we may see these issues increase as the technology advances, and with it a call for more regulation in this area.

Cryptoassets and more particularly non-fungible tokens (NFTs), using blockchain technology, are digital certificates of authenticity that can serve as a means of authenticating goods and therefore can be a useful anti-counterfeiting measure. However, there have been many instances of artworks and original creative works being misappropriated and resold as collectable NFTs with a value attributable to their scarcity or limited number. One famous example was the Hermés Birkin bag, which was reproduced as artworks, labelled MetaBirkins and sold as NFTs by an LA digital artist called Mason Rothschild. Hermés subsequently sued Rothschild for trade mark infringement in the United States. 

Some onlookers might have wondered what all the fuss was about. However, the value of NFTs can be volatile and lead to financial risks. Left unchallenged some consumers might think such artworks are endorsed or licensed by the brands and with that comes a risk of reputational damage. 

In the UK, the FCA categorizes cryptoassets based on their structure and use (see www.fca.org.uk/firms/cryptoassets). Firms carrying out regulated activities need FCA authorisation. Since January 2020, the FCA supervises Anti Money Laundering and Countering Terrorist Financing for certain cryptoassets, and as of October 2023, the FCA regulates financial promotions for qualifying cryptoassets, requiring firms to follow specific guidelines (see www.fca.org.uk/publication/finalised-guidance/fg23-3.pdf). The FCA has also banned the sale of derivatives and exchange-traded notes referencing cryptoassets due to concerns about retail consumers’ ability to assess risks.

Streaming pirated content involves acts of primary copyright infringement such as copying and communicating the work to the public without the copyright owner’s consent. These are actionable in the civil courts and platforms that facilitate such streaming can be liable for authorising copyright infringement if they enable or encourage users to access pirated content. 

UK courts can grant blocking orders to prevent access to websites that host or facilitate access to pirated content. These orders can be obtained against Internet Service Providers (ISPs) when certain conditions are met, such as evidence of substantial infringement and the inability to take down the content directly.

Streaming pirated material is also a criminal offence that can result in fines and/or imprisonment depending on the seriousness of the offence.

Since the COVID-19 pandemic we have seen a generation of consumers educated in the use of QR codes when prior to that they seemed of little significance. With this comes the opportunity for fraud and a new phenomenon, “Quishing”, which generally involves the placement of a false QR code over a genuine QR code usually in a physical placement; such as over a car parking machine or restaurant menu, which is used to then steal your personal data or commit fraud. The National Cyber Security Centre reports an increase in these kinds of attack (see www.ncsc.gov.uk/pdfs/blog-post/qr-codes-whats-real-risk.pdf).

HMRC is the UK Customs Authority responsible for national policy concerning IP enforcement at the border. Border Force, part of the Home Office, implement and enforce this policy at all major ports in the UK and are responsible for controlling goods entering the UK. While the Borders, Citizenship and Immigration Act 2009 provides Border Force officers with powers to search, seize and arrest, they rarely prosecute IP crime. They do however stop and seize counterfeit goods. 

Ex officio action in the UK

Border Force have ex officio powers to detain suspected shipments of counterfeit goods. In those cases, they look to the rights holder to act. Rights holders must submit an Application for Action (AFA) to cover seized (non-perishable) goods before they are destroyed or the goods will be released. 

Application for Action (AFA) in the UK

It is recommended rights holders submit an AFA with Border Force to assist with the identification and detention of suspected counterfeit goods on arrival into the UK. 

The AFA should include details of registered IP rights, descriptions of genuine products and packaging, and details of genuine importers and exporters within the distribution network. 

When a seizure is made by Border Force, the rights holder is notified and provided with 10 working days (three working days for perishable goods) to confirm if the goods are genuine or not. This may require parties to move quickly and request inspection of the goods in person, if required.

If the goods are found to infringe and the importer consents to their destruction (or does not respond) then the goods will be destroyed. If the rights holder does not respond and the importer does not agree to destruction, then the goods will be released. 

In situations where the rights holder responds and the importer objects, then the rights holder must commence legal proceedings within the initial 10-day time frame and provide evidence. If no evidence is provided the goods will be released. 

Rights holders are liable for any costs incurred by Border Force on the handling, transportation, storage and destruction of suspected counterfeit goods, and give undertakings to meet these costs when submitting an AFA.

There is a small consignments procedure that applies to goods arriving at the UK by post or express courier of up to three units or which weigh less than 2kg. This allows Border Force to destroy goods without consulting the rights holder. The AFA has an “opt-in” for the small consignments procedure.

It is important to note that EU-wide AFAs no longer cover the UK, post-Brexit. Therefore, a separate UK AFA has been required since 1 January 2021. UK AFAs are free to file so rights holders may be missing out if they overlook this.

Ordinary shops remained the most significant target for IP crime investigated by UK Trading Standards Authorities during the pandemic (tobacco, clothing and alcohol being the top three counterfeit goods investigated). However, according to the UK Intellectual Property Office IP Crime and Enforcement Report for 2020/21, there was a 40% increase in online sales of counterfeit goods during the pandemic as physical retail stores were forced to close. The shift online created opportunities for IP crime, as discussed in previous paragraphs. There was also a number of seizures at small parcel points in the UK, and Coventry Postal Hub saw a steep rise in the number of counterfeit consignments during the pandemic. Border Force also noticed a decline in the detention of counterfeit goods at traditional sea and airports, supporting the view that the world had migrated online.

In February 2022 the UKIPO released a five-year strategy outlining the UK government’s commitments to tackle IP crime and infringement, promising the creation of a national “centre of excellence” co-ordinating government agencies, TSAs, Border Force and police. See www.gov.uk/government/publications/ip-counter-infringement-strategy-2022-to-2027.

6.1 What can your lawyer do to help?

Listen to you and work with you to understand the commercial priorities, key sales markets, manufacturing territories, sales and distribution channels. Review intellectual property rights to ensure they are fit for purpose, undertake a gap analysis if required, review any existing strategy, amend or introduce a new one, ensure effective border controls and online monitoring, local measures and policing of distribution networks, consult on contractual arrangements. Also, keep and review effective records and management information (MI). 

6.2 What other important considerations are there?

Budget, best value return on investment, and being able to demonstrate each of these. In addition, ensuring brand reputation, compatibility with the high ESG standards and sustainability. 

In order to combat anti-counterfeiting in the UK effectively it is important to ensure adequate trade mark protection and advisable to have professional representation both at the UK Registry but also in taking any enforcement actions. A UK address for service is obligatory (and therefore ideally UK representation) in the event of proceedings at the UKIPO. 

We find that regular consultation with brand owners over their IP policies, as well as conducting audits to ensure that appropriate protection and processes apply are important elements in combatting counterfeits and IP infringement: Have a plan!

Police Intellectual Property Crime Unit (PIPCU) 

PIPCU is a specialist police team part of the National Lead Force Operations within the City of London Police (see www.cityoflondon.police.uk/police-forces/city-of-london-police/areas/city-of-london/about-us/about-us/pipcu). There is also a unit in the North West of England (NWPIPCU). PIPCU was initially set up and funded by the UKIPO. PIPCU’s focus is to investigate, disrupt and prevent intellectual property crime that causes significant harm to the UK economy and the public. They accept case referrals for investigation, but particular attention is given to high value cases and/or where the offences are believed to be linked to a network of organised crime. 

This was the case in November 2021, when two men were arrested during a raid by PIPCU of a shop in Manchester. They seized 4,342 items of counterfeit designer homeware products, estimated at a loss to the industry of GBP 827,000 (see www.cityoflondon.police.uk/news/city-of-london/news/2024/january/brothers-sentenced-after-800000-of-counterfeit-homeware-found-in-manchester-shop). The men later pleaded guilty at Manchester Magistrates Court to the acquisition of criminal property and distribution of infringing goods. They were sentenced to 16 months imprisonment, suspended for 18 months, and ordered to complete 180 hours of unpaid work.

More recently, in the run up to the UEFA Euro 2024 tournament, the increase in demand for football merchandise was a lucrative opportunity for counterfeiters to exploit consumers. At the time of edit, eight people have been arrested and GBP 100,000 worth of fake football shirts seized from several locations across England (www.cityoflondon.police.uk/news/city-of-london/news/2024/july/eight-arrested-and-100000-of-fake-football-shirts-seized-as-police-tackle-counterfeiting-during-euro-2024).

UK Border Force

There are some other national bodies who may be engaged in connection with counterfeit activity. The most obvious (referred to above) is UK Border Force which has responsibility for identifying and seizing counterfeit goods on arrival (www.gov.uk/government/organisations/border-force).

Her Majesty’s Revenue and Customs (HMRC) 

HMRC also play a role in detecting and detaining goods and may get involved if there are significant excise issues (www.gov.uk/government/organisations/hm-revenue-customs).