Counterfeiters must also compensate brands for the moral damage caused

The Supreme Court has established that counterfeiters must also compensate brands for the moral damage caused because fake products are “a source of reputational damage.”

The ruling dismisses the appeal of a Chinese businessman before the Provincial Court of Valencia, and establishes doctrine by pointing out that “the intangible elements of exclusivity and commitment to quality that brands intend to transmit to all consumers” have been compromised.

The court determines that there is compensable damage because from the display for sale of the products “implicit moral damage arises that does not require further proof.”

Isabel Pascual de Quinto, a lawyer who has represented the BIMBA Y LOLA brand, states that counterfeits “contribute to the loss of the brand image created by the owners throughout their entire business history. Hence the importance that this damage be repaired.” And she also considers that marketing these products “implies that consumers of a brand reject the purchase of legitimate merchandise given that infringing products are found massively on the market.”

The Supreme Court cites the jurisprudence of the Court of Justice of the European Union in the Liffers case, stating that “the greater the prestige of a trademark, the greater the level of protection that that sign deserves to obtain from the courts.”

The businessman has been sentenced to three years in prison for a crime against intellectual property and to compensate the brands Bimba and Lola, Michael Kors, Chanel, Yves Saint Laurent, Carolina Herrera and Hello Kitty, as civil liability, with 25% of the total value of the more than ten thousand forgeries seized.

In 2022 in Spain, more than 2.6 million counterfeits worth 121 million euro were intercepted by the State Security Forces and Bodies, according to data from the Crime Statistical Portal of the Ministry of the Interior. In fact, it is the second country in the European Union that buys the most counterfeit products, behind Bulgaria, according to a study by the European Union Intellectual Property Office (EUIPO) published in June.

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