The Benefits of Filing a Criminal Case Based on Trademark Infringement for Counterfeit Products Subjected to the Crime of Smuggling

Turkey’s geographical location and dynamic population make Turkey an important market for smuggled products and one of the major transit countries. In its most basic definition, a smuggled product corresponds to the products entering the country without permission or with underreporting/false declaration. Products subject to the crime of smuggling comprise a wide range of sectors from pharmaceuticals to tobacco and alcohol products, from textiles to phones and car components. In some product groups, particular conditions are required for the occurrence of the crime of smuggling, and there are also aggravating provisions.

According to the data of the Ministry of Interior, 420 thousand bottles and 795 thousand liters of alcohol, and 23 million pharmaceuticals were seized in 2019 based on smuggling provisions. The amount of smuggled pharmaceuticals increased by 324% compared to 2018. Smuggled products that are subjected to trade cause tax losses for the state. In addition to the monetary damage, the public health is also threatened due to the introduction of prohibited and regulated products without checking their conformity.

Most of the smuggled products entering the country are also counterfeit. This creates a similar monetary loss to the state and even a more serious public health threat. Counterfeit pharmaceuticals and alcoholic beverages directly cause death, our children are threatened by the paints with carcinogenic effects in counterfeit toys and stationery material, and all of us are at the risk of explosion in products, such as counterfeit batteries and chargers used for phones. Also, the use of profits generated from smuggled and fake products is a severe topic that must be dealt with separately.

Essentially, a counterfeit product is the use of the trademark, or its identically similar form, on products without the permission of the trademark owner. Due to the Customs IP Program “CIP,” when counterfeit products enter the country through customs, it is more likely that these products will be identified, and the entry will be prevented by informing the right holders. Therefore, counterfeiters export the products either by misrepresentation or by other illegal routes. For example, mobile phone accessories that bear registered trademarks without permission, brought from China outside of the legal route, would be considered as smuggled products according to Law No. 5607, and counterfeit products according to IP Law No. 6769. Due to the fact that the vast majority of smuggled products are simultaneously counterfeits, the Ministry of Justice emphasized the need for cooperation between the institutions by including the following statement; “The institutions and organizations must cooperate to prevent tax losses of the state and to protect IP rights, and the IP right holders must be notified of suspicious products.” in its Circular No.160 dated 20/02/2015.

The crime of smuggling is not a complaint-based crime, and the state is directly targeted with it. For this reason, an ex-officio investigation can be initiated by prosecutors. However, trademark infringement is a complaint-based crime, and it is only possible to prosecute the crime with the complaint of the trademark right holder. However, the trademark owner must be aware of the act and the suspects in order to exercise its legal rights. In this context, the Customs General Directorate expanded the CIP program for the products seized and delivered by the police to the Customs Liquidation Service (TASİŞ) under Communique No. 38850468-164. Accordingly, the representative of the trademark right holders should be notified of the seized products as soon as they are taken to the warehouse by TASİŞ.

However, there is no system used by the police and gendarmerie, similar to the CIP program implemented in customs. This situation makes coordination between IP right holders and units combatting crimes of smuggling difficult, and causes both smuggled and counterfeit products to be investigated only for the crime of smuggling. The lack of complaint of the IP right holder might result in the re-entering of the smuggled and counterfeit products to the market with a possible release or sale decision to be made in the smuggling file.

In practice, some prosecutors and judges believe that the acts that constitute trademark infringement and crimes of smuggling should be evaluated as a single act; for this reason, they believe that a case should only be brought for the crime of smuggling, which is considered to be a more serious crime. However, besides the difference in actus reus and mens rea of these two separate crimes, the trial procedures and the subjects harmed by the crime are also different. The 19th Criminal Division of the Court of Appeal (CoA) put an end to these discussions and decided that smuggling and trademark infringement crimes are different crimes that need to be investigated and tried separately with Decision No. 2016/13094E. and 2017/3661K.

The District Courts, especially in Istanbul, also follow the CoA’s decision with its consistent decisions. Therefore, if the products subject to the investigation carried out in accordance with smuggling provisions are also counterfeit products, a different judicial process should be initiated based on the crime of trademark infringement per Article 30 of the IP Law, measures such as seizure decisions should be taken to prevent the release/sale of the products, and the products should be destroyed.

At this point, since a separate file is carried out based on the crime of trademark infringement, informing the relevant authorities dealing with the crime of smuggling will prevent the release or sale of fake products.

In order to inform the representatives of the trademark owners of the smuggled products, a system similar to the CIP Program could be established, or that the current CIP program could be integrated into the gendarmerie and police who deal with crimes of smuggling.

At the same time, it is essential to provide regular training on IP rights to institutions, such as prosecution offices, courts, police, gendarmerie, and TASIS, which are dealing with crimes of smuggling, to ensure unity in practice and strengthen the fight against products that pose dangers to society, and which also infringe upon the IP rights of the trademark owners.

First published by ManagingIP in Jul 08, 2021.

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