5 June 2019TrademarksPaulo Armando Innocente de Souza and Rafaella Gonçalves Franco

The liability of shop owners

Like many other developing countries, Brazil is engaged in a war against piracy, with different initiatives and strategies being executed by public and private entities to strike at the giant industry of counterfeited products, which is worth up to $460 billion annually worldwide, according to OECD’s 2018 report (an increase of 36% from 2016’s report). In Brazil, the losses caused by piracy are currently estimated at around $30 billion annually.

The effectiveness of civil anti-counterfeiting actions in Brazil may be jeopardised by the fact that most infringers are small retailers or individuals, which discourages civil actions due to a poor cost-benefit ratio (civil infringement actions may be expensive and time-consuming when targeted at very small infringers).

As a result, many enforcement strategies are limited to criminal actions with the exclusive purpose of seizing and destroying counterfeit products, without any effective order to prevent the infringers from resuming the illegal activity.

However, these obstacles are being overcome by new anti-piracy strategies targeted not at small retailers but at shopping malls and the commercial complexes that host them. Recent court decisions, mostly from São Paulo’s State Court, have accepted landlord liability arguments against recurrent piracy committed by retailers.

Case study

This is the case of a mall named Shopping 25, located in the most popular commercial area of São Paulo, where lots of stores are known in the market for selling products at a very low price reproducing well-known or highly reputed marks.

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