Court of Appeal rejects appeal by traders over convictions for selling counterfeit goods

The Criminal Division of the Court of Appeal has upheld jail sentences imposed in a case brought by City of Wolverhampton Council against counterfeit traders, saying one aspect of the appellants' argument lacked “any sense of reality”.

Lord Justice Holgate heard that in December 2023 at Wolverhampton Crown Court Majid Iqbal and his brother Muhammad Iqbal were both convicted unanimously of four counts of conspiracy to sell, offer, expose for sale or distribute goods bearing a sign identical to a registered trademark, four counts of conspiracy to possess goods bearing a sign identical to a registered trademark, one count of conspiracy to market, import, export or use products copying a design registered under the Registered Designs Act 1949 and one count of conspiracy to transfer and/or convert criminal property.

In addition, Majid Iqbal was convicted of one count of unauthorised possession of goods bearing a sign identical to a trademark contrary to s.92(1)(c) of the Trade Marks Act 1994.

In March 2024, Her Honour Judge Jacobs sentenced both to imprisonment for 31 months. Their wives, Hina Naz and Fatima Aamir respectively, were convicted on various counts and received suspended prison sentences.

Both brothers appealed against sentence and their convictions for conspiracy to market, import, export or use products copying a design registered under the Registered Designs Act 1949.

The counterfeit goods were Sky remote controls, Samsung products, Apple products and CND nail varnish. The copyright-infringing goods were earphones to be passed off as Apple Airpods.

At the original hearing counsel for the appellants made oral submissions which relied on the decision of the House of Lords in R v Saik [2007] 1 AC 18.

Holgate LJ said: “In a nutshell, it was said that the prosecution’s case relied upon evidence that the conspiracy had been implemented by a course of conduct which included marketing and sale of actual items said to infringe Apple’s copyright.

“As a result, the Crown was required to prove that those items were the same or not materially dissimilar from Apple’s AirPod and also that the appellants knew that fact.”

This was denied by the prosecution, which said it did not have to prove that the items marketed for sale actually infringed Apple’s copyright designs or that the defendants knew that fact.

The appellants raised two points, did HHJ Jacobs err in her application of Saik to identify the requirements which the prosecution had to prove for the conspiracy under this count and if not, did she nevertheless misdirect the jury.

They argued HHJ Jacobs misapplied the principles laid down by Lord Nicholls in Saik by ruling that the earphones represented unidentified rather than identified property, so that the prosecution only had to prove that a defendant intended to market and sell earphones which were copies of AirPods and not that the items were copies and that he or she knew that to be the case.

Holgate LJ said in his judgment: “The error in the appellants’ approach is that they equated the moment when they found that the earphones were good copies of AirPods with the making of a conspiracy agreement.

“But the agreed principle…is not that the moment when property becomes ‘identified’ determines when a conspiracy agreement is made. As Saik makes clear, at the moment when that agreement is made the property or relevant fact or circumstance may be either identified or unidentified. Indeed a person may be guilty of participating in a conspiracy agreed at a time when the relevant property or fact is unidentified and never subsequently becomes identified.

“There is nothing in Saik (including [40]-[41] of Lord Hope’s speech) to support the appellant’s approach.”

He said the brothers’ submission “lacks any sense of reality” and had been described as absurd by HHJ Jacobs.

“It depends upon saying that the appellants made a series of separate conspiracy agreements, effectively in the same terms, each time they found upon inspecting a delivery that they had received ‘design-infringing’ goods, Holgate LJ said.

“The submission was no more than a contrivance to justify treating all of the earphones the subject of [this] count as ‘identified’ property when applying the principles in Saik.

“The judge was not obliged to direct the jury on such a basis, a fortiori when the appellants did not even give evidence that they had acted in such an absurd way.”

He said HHJ Jacobs had correctly directed the jury to be sure that a defendant joined a conspiracy to offer or put on the market earphones infringing the AirPod design, intending that goods infringing that design would be offered or put on the market, whether by themselves or another participant in the conspiracy.

The Court of Appeal also found that HHJ Jacobs had been correct in her approach to sentencing of the defendants and left these unaltered.

Mark Smulian