The case: The German manager of a freight forwarding agency relied on the advice of several lawyers and as a result proceeded to assist an Italian manufacturer of Bauhaus furnitures to achieve his aim. The business model of the manufacturer was tricky, in that the production and sale of the goods was permitted in Italy, but the sale in Germany was in breach of copyright laws. The freight forwarder did not consider that he could be liable to prosecution.
So, rather than delivering directly to Germany, what could be more obvious than maintaining a distribution warehouse in Italy, so that German customers could pick up the goods in Italy themselves. In addition, and to make things easier for the German customers, they could simply hire a forwarding agent to bring the goods to Germany and the agent could collect the purchase price there. All that was needed to finalise this redirection model in Germany was to place the advertisement. The German customers could then complete an order form on a website, after which they would receive all the necessary information.
The concept behind this business model was generally endorsed by several lawyers. The lawyer for the forwarding agency said that importing into Germany must be permitted under EU law. To enable this, the warehouse would have to be located outside Germany and the customers would need to be free to choose the freight forwarder. The lawyer for the Italian furniture manufacturer told the freight forwarder that the risk of prosecution could be avoided if the distribution warehouse was moved to Italy. The freight forwarder’s lawyer in Frankfurt also advised him to do this. Finally, a third Frankfurt lawyer whose opinion was sought said that he did not see a problem in principle, but that he would have to clarify the matter. No further clarification was provided by him.
The freight forwarder was therefore quite surprised when he was accused of aiding and abetting commercial copyright infringement after having put into place the above model. He argued that he could not be prosecuted for his actions and that he could not have done more than seek advice from his lawyers, who had told him that his actions would be permitted.
The German Federal Supreme Court (BGH) said in response that none of the advice provided by the freight forwarder’s lawyers was reliable. He ought to have been able to recognise this and therefore he was not exempt from prosecution.
The advice provided by a lawyer would only be considered reliable if it was given after a thorough and careful examination of all the facts and if the lawyer clearly and unequivocally confirmed the absence of any criminal liability. It is regularly the case that in a complex scenario involving inevitably difficult legal questions, a detailed written expert opinion is required. A lawyer for one of the parties involved, such as the manufacturer’s lawyer in this case, is not considered an advisor because they are free to pursue their own interests and cannot be considered neutral.
Because the freight forwarder was aware of the circumstances that meant the lawyer’s information was unreliable, the possibility that the Italian furniture manufacturer was committing a criminal commercial copyright infringement in Germany would have been obvious to him – and that he was ultimately assisting such an infringement. He knew that the entire marketing model was specifically aimed at the German market. His error in relation to the legality of his actions was avoidable and therefore irrelevant.
The freight forwarder was sentenced to a total prison term of two years for criminal aiding and abetting the commercial unauthorised exploitation of copyright-protected works in 485 cases, suspended on probation, BGH – Italian Bauhaus Furniture, judgment of 11.10.2012, 1 StR 213/10.
Learnings: This case from copyright law is also applicable to trade mark law. Do not ignore the potential for criminal liability of intentional trade mark infringements.
If a trade mark infringement is a possibility, obtain the advice of a lawyer who is not involved in the matter, and certainly avoid the advice of one who is acting on behalf of third parties. After undertaking a thorough examination of all the facts of the case, the lawyer must provide a written report with detailed reasons as to why you may or may not proceed. The more complex and difficult the legal question is, the more detailed the lawyer’s statement must be. Do not rely on ad hoc advice; information with a ‘fig-leaf function’ has no value in white-collar crime law.