Liability for illegal use of a trademark

A trademark is one of the most valuable assets for a business, it reflects the identity of a product or service, and also creates trust and recognition among consumers. The legislation of many countries regulates liability for illegal use of a trademark.

What is the illegal use of a trademark?

The term "trademark infringement" is often used to mean any use of a trademark without the owner's permission that may cause confusion among consumers as to the origin of a product or service.

The main forms of trademark infringement include:

• counterfeit goods,
• counterfeit production,
• unauthorized use of a sign or symbol similar to a trademark,
• as well as the use of the trademark in advertising materials without the permission of the owner.

These violations can occur both in the physical world and in cyberspace.

Types of liability for illegal use of a trademark

The consequences of illegal use of a trademark can be serious for infringers. The owner of a trademark can file a lawsuit (this is a civil liability) to stop the illegal use, as well as to recover damages, including loss of profit, reputational damage, and legal fees. In Ukraine, this type of responsibility may include:

• stopping the movement of goods across the customs border of Ukraine,
• confiscation and destruction of such goods,
• confiscation of materials and tools for the production of such goods
• application of a one-time cash payment (compensation)
• compensation for damages caused by illegal use of the object of intellectual property rights,
• publication of information about infringement of intellectual property rights in mass media.

The legislation of many countries also provides for criminal liability for serious trademark infringements, in particular for mass counterfeiting and distribution of counterfeit goods. Ukrainian legislation includes fines from 17,000 to 255,000 hryvnias, as well as a ban on holding certain positions or engaging in certain activities. At the same time, the imposition of criminal liability does not exclude the additional application of civil and compensation for damages.

In addition to civil and criminal liability, there is also administrative liability for illegal use of a trademark. Some countries give public authorities the power to impose fines on infringers and to take measures to stop illegal use of a trademark, including canceling the registration of a trademark or blocking access to an illegal website. In Ukraine, violation of someone else's TM is interpreted as unfair competition, i.e. illegal copying of form, packaging, external design, as well as imitation, copying, direct reproduction of the goods of another entrepreneur, arbitrary use of his name, and entails a fine from 510 to 748 hryvnias with mandatory compulsory confiscation of all such goods, production tools and raw materials.

As the world becomes more globalized, trademark infringement is becoming a problem not only for local companies but also for global brands. Therefore, there is also international trademark protection, particularly through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides a minimum level of trademark protection worldwide.

In general, liability for trademark infringement is serious and can have a significant impact on the infringer. The legislation provides trademark owners with powerful tools to protect their rights and recover damages. The proper use and protection of trademarks is an important aspect of any business that wishes to maintain its identity and reputation, as well as to ensure consumer confidence in its goods and services.

To receive specific information about liability for trademark infringement in Ukraine or another country, we recommend that you consult the lawyers of Prikhodko and Partners.