Criminal liability for counterfeiting: when a civil lawsuit is not enough

For most right holders, the fight against counterfeiting begins and ends with civil law tools: a pre-trial claim, a lawsuit for compensation under Articles 1252, 1301, and 1515 of the Civil Code of the Russian Federation, and a demand for the seizure and destruction of goods. This path is predictable, does not require proof of intent, and allows for monetary compensation, including without proving the exact amount of damages.

However, a civil lawsuit has a systemic limit: it addresses the consequences of a specific violation rather than the source of the counterfeit trade itself. If the infringer is not a one-time seller but an organized distribution channel, civil proceedings turn into an endless series of repetitive cases against changing defendants, some of whom are formal "shell companies" with no assets. In such a situation, it makes sense for the right holder to transition to criminal law mechanisms.

How does the criminal track fundamentally differ?

A civil lawsuit is aimed at restoring the financial position of the rights holder. Criminal prosecution serves a different purpose – the termination of the illegal activity itself and the punishment of the perpetrators, up to and including imprisonment.

The practical difference for the rights holder is as follows:

• Evidence collection powers. Investigators have tools unavailable to a plaintiff in a civil trial – searches, seizures, access to bank transactions, and establishing the entire supply chain from the counterfeit manufacturer to the retail seller;

• Impact on unidentified defendants. If the manufacturer or the organizer of the distribution channel is not identified, a criminal case allows for their identification, whereas filing a civil lawsuit requires first identifying a specific defendant;

• A more serious deterrent effect. An infringer often factors a civil lawsuit fine into their business model as an expense. The prospect of criminal prosecution, including actual prison sentences, significantly changes the approach to "calculating" risks.

• A higher burden of proof. In a criminal case, it is necessary to prove the elements of the crime, including significant damage or repeated offenses, as well as guilt – this is more difficult and slower than in a civil process, where a presumption of guilt of the intellectual property infringer is applied.

From this follows a practical conclusion: criminal prosecution does not replace a civil lawsuit but complements it in situations where the true goal is not compensation, but the suppression of systemic, organized infringement.

Article 180 of the Criminal Code of the Russian Federation: Illegal Use of a Trademark

The primary provision for counterfeit cases is Article 180 of the Criminal Code of the Russian Federation, which covers the illegal use of another's trademark, service mark, appellation of origin of goods, or similar designations for homogeneous goods.

Liability under Part 1 of Article 180 of the Criminal Code of the Russian Federation arises under any of the following conditions:

1. the act was committed repeatedly, meaning the offender has already been held administratively liable for a similar violation or has committed it more than once;

2. the act caused large-scale damage to the right holder.

The threshold for large-scale damage under this article is defined by a separate note to Article 180 of the Criminal Code of the Russian Federation and currently amounts to a sum exceeding 400,000 rubles - this figure is periodically revised by the legislator, so it should be checked against the current version of the article when preparing an application.

Sanctions under Part 1 include a fine, compulsory, correctional, or forced labor, as well as imprisonment for a term of up to two years.

Stricter liability is established by Parts 2 and 3 of Article 180 of the Criminal Code of the Russian Federation. In particular, if the crime is committed by a group of persons by prior conspiracy (for example, according to a prior agreement, some accomplices purchased counterfeit items for the purpose of sale, others stored them, and others transported or directly sold them), then the term of imprisonment under Part 2 of Article 180 of the Criminal Code of the Russian Federation is up to four years.

If the crime is committed by an organized group, which is typical for established channels for the sale of counterfeit goods through intermediaries, warehouse networks, and online platforms, then the term of imprisonment under Part 3 of Article 180 of the Criminal Code of the Russian Federation is up to 6 years.

Other legal norms

Limiting the assessment of a criminal case's prospects solely to Article 180 of the Criminal Code of the Russian Federation is a common mistake. Depending on the specifics of the violation, other provisions may also apply:

• Article 146 of the Criminal Code of the Russian Federation – infringement of copyright and related rights. This is relevant if the counterfeiting involves the illegal use of copyrighted works: packaging design, characters, audiovisual content, or software;

• Article 171.1 of the Criminal Code of the Russian Federation – production, acquisition, storage, transportation, or sale of goods and products without mandatory identification marking or without the information required by Russian legislation. This provision is particularly relevant in cases involving the counterfeit circulation of goods subject to the "Chestny Znak" mandatory marking system, such as footwear, perfumes, and certain categories of clothing and textiles;

• Article 238 of the Criminal Code of the Russian Federation - production, storage, transportation, or sale of goods that do not meet safety requirements. This is a key provision for cases where counterfeit products pose a threat to consumer health, such as counterfeit cosmetics, perfumes, alcohol, children's goods, etc. The sanctions here are significantly more severe, and the crime is considered committed even if no actual harm to health has occurred, provided there is a real danger to life or health.

Practical difficulties of the criminal path

Moving a case into the criminal realm requires the right holder to be prepared for a more labor-intensive process:

• Proving the amount of damages. The calculation methodology is one of the most contested elements of such cases. Courts scrutinize the right holder's calculations and often appoint a forensic economic appraisal. If the calculation is based on incorrect assumptions (for example, based on the price of the original rather than the value of the seized counterfeit goods), the damages may not reach the "large scale" threshold - in which case the case will be dismissed or the offense reclassified;

• Establishing intent. Unlike civil proceedings, where liability for infringement of exclusive rights generally arises regardless of fault, criminal prosecution requires proof that the person acted intentionally, aware of the illegality of using another's designation;

• Timelines and resources. A criminal investigation, unlike a civil lawsuit with clear procedural deadlines, can stretch on for months or years, and initiating it requires active cooperation between the right holder and investigative authorities - providing samples of original products, expert reports on the counterfeit nature of the goods, documents confirming trademark rights, etc.

When it makes sense to take the criminal route

In practice, reporting to law enforcement is justified if:

• the infringement is systematic and organized in nature, rather than an isolated incident;

• it is impossible to identify all participants in the distribution chain through civil proceedings;

• the counterfeit goods pose risks to consumer health or safety;

• previous civil lawsuits and claims have not stopped the infringer, who continues their activities through new legal entities or sales channels;

• the right holder's goal is not so much monetary compensation as the complete shutdown of the distribution channel itself.

In other cases - involving a one-time violation, an identifiable defendant, and where monetary compensation is sufficient - civil law mechanisms remain a faster and more predictable protection tool. Criminal prosecution is not an alternative to a lawsuit, but the next level of protection, which should be pursued deliberately and with a full understanding of evidentiary requirements.