The case: A licensee, who was permitted to manufacture and distribute wristwatches by well-known brands on an exclusive basis, sold them in Germany under a selective distribution system. He monitored their quantity and also checked the current stock of the watches. Nevertheless, he failed to notice that over a period of time about 22,000 watches had been imported from China into the European Union and sold in Germany without his consent. He was alerted when an anonymous letter was sent to one of the trade mark owners, in which the eventual defendant was accused of being the organiser of an international fraud system. There could have been a punishable import of branded goods. The trade mark owner filed criminal charges for commercial infringement of his Union trade mark.

At this point, the public prosecutor’s office became involved. For tactical reasons, it initially called in only the customs authorities and the tax investigation department. This resulted in further suspicions against the defendant. In particular, an independent, unprompted report from Belgian customs confirmed the suspicion that counterfeit watches were being imported into Belgium via a letterbox company. This indicated the existence of a commercial infringement of a Union trade mark by way of the import of brand watches without the consent of the trade mark owner. This violation is punishable by imprisonment ranging from three months to five years, even if the goods are genuine.

Because there was a suspicion of commercial infringement, the investigations could also include the secret surveillance of telecommunications traffic. Landline and mobile phone lines and email inboxes were monitored. The device number, the location of the monitored mobile phones and the number of the SIM card used in them were also determined.

In addition, long-term observation of the parties involved were carried out, in conjunction with searches of residential and business premises as well as the premises of an auditing and tax consultancy firm.

In particular, an evaluation of the WhatsApp communications showed that the defendant, who has since been found guilty, was intentionally infringing the Union trademarks in 32 cases by illegally importing a total of 29,032 watches with a value of $1,888,538.60 into the European Union or the Federal Republic of Germany. The defendant was sentenced to three years and three months total imprisonment, Bonn District Court, 7th Grand Criminal Chamber, Sentence of 07.03.2016 – 27 KLs -430 Js 794/15-4/15. The Federal Supreme Court later stated that the maximum sentence in the specific case would be four years imprisonment.

Learnings: In case of doubt, criminal prosecution is an option in dealing with trade mark infringements. As this case shows, the investigating authorities have a number of options they can pursue. If there is a suspicion of trade mark infringement on a commercial or gang basis, the public prosecutor’s office can – as in the case described above – even use the particularly effective means of covert telecommunications surveillance (TKÜ).