Proper sanctions for repeat offenders
Resolution 1181-TPI/INDECOPI, issued on June 6, approved an $82,290 fine for a trademark infringer that illegally sold pipes bearing a trademark owned by a third party.
This is considered to be a drastic yet justifiable sanction given the nature of the infringer’s illegal conduct. In this case, the defendant offered, through its website, products bearing a trademark belonging to Estudio Delion client Crane Co, which is based in the US.
Once the infringement complaint was filed, the defendant argued that it was offering legally-purchased products. This meant that the case would focus on trademark exhaustion because the defendant argued that Crane could not take any action as the pipes were legitimate products. The defendant pointed to a number of invoices that suggested that its suppliers had legitimately purchased the goods.
"INDECOPI'S SECOND INSTANCE COURT APPLIED THE LEGAL PRINCIPLE THAT WHOEVER AFFIRMS A FACT MUST PROVE IT AND SAID THAT IT WAS UP TO THTE DEFENDANT TO SUBSTANTIATE ITS ARGUMENTS."
The Administrative Court of First Instance of the National Institute for the Defense of Competition and Protection of Intellectual Property (Indecopi) stated that as Crane could not prove that these documents were false, it had to find that the infringement complaint against the defendant was unfounded.
Crane appealed against this decision. Indecopi’s second instance court applied the legal principle that whoever affirms a fact must prove it and said that it was up to the defendant to substantiate its arguments. As the defendant was not able to do so, it was fined to set an example.
The resolution represents a good precedent. It is useful as a lesson to those that repeatedly infringe third-party trademark rights. Before, they could be confident that any infringement charge would result in a relatively low fine, which only encouraged them to continue infringing. With this resolution, Indecopi clearly states that if repeat infringers are caught, their punishments will hit them hard economically, and in a worst-case scenario, an infringer will be bankrupted.
