Brazil’s General Sports Law and Counterfeiting: A New Criminal Law Approach Begins to Deliver Results
By: Guilherme Sampaio
Product counterfeiting is still often perceived as a relatively minor offense, limited to the infringement of a trademark owner's rights.
This understanding, however, appears increasingly disconnected from the economic and social realities surrounding the market for counterfeit goods.
The production and commercialization of counterfeit products frequently take place within economic supply chains characterized by informality.
Beyond the infringement of industrial property rights, such activities commonly involve failures to comply with tax and social security obligations, as well as employment relationships operating outside the protections established by law, without the proper payment of statutory contributions or compliance with legally guaranteed working conditions.
In other words, product counterfeiting can no longer be understood exclusively as a private dispute between the infringer and the trademark owner.
Against this backdrop, the contrast between the legal framework established by Brazil’s Industrial Property Law (Law No. 9,279/1996) and the more recent provisions introduced by the General Sports Law (Law No. 14,597/2023) is particularly noteworthy.
As is well known, traditional trademark legislation provides for relatively lenient criminal penalties. Article 189 of the Industrial Property Law, which addresses the unauthorized reproduction or imitation of a registered trademark, establishes a penalty of three months to one year of detention or a fine.
Article 190, which covers, among other conduct, selling, offering for sale, displaying for sale, or keeping in stock products bearing unlawfully reproduced or imitated trademarks, provides for only one to three months of detention or a fine.
These offenses are therefore classified as minor criminal offenses under Brazilian law and fall within the jurisdiction of the Special Criminal Courts, since their maximum statutory penalties do not exceed two years.
In practice, this means that incidents involving counterfeit products generally result in the issuance of a Termo Circunstanciado de Ocorrência (TCO), a simplified police incident report, and are subject to the procedures and mechanisms established by Law No. 9,099/1995.
The mere issuance of a TCO does not, of course, constitute a criminal conviction, nor does it establish recidivism.
It is precisely at this point that the General Sports Law introduces a significant shift in perspective.
Article 169 of Law No. 14,597/2023 establishes a penalty of two to four years of imprisonment, in addition to a fine, for anyone who imports, exports, sells, distributes, offers or displays for sale, conceals, or keeps in stock, for commercial or advertising purposes, symbols of sports organizations or products resulting from their unauthorized reproduction, imitation, counterfeiting, or modification.
Furthermore, unlike trademark offenses under the Industrial Property Law, which generally require the rights holder to initiate criminal proceedings, the offense established under Article 169 is subject to unconditional public prosecution, meaning that criminal proceedings may be initiated by the Public Prosecutor’s Office without a complaint or request from the rights holder.
The distinction is significant: for commercially similar conduct, the criminal law response moves beyond the framework applicable to minor offenses and allows for prosecution carrying substantially more serious legal consequences.
And this legislative change is already beginning to produce tangible results.
In a recent ruling, the First Criminal Panel of the Court of Justice of the Federal District and Territories (TJDFT) upheld a conviction under Article 169 of the General Sports Law in a case involving the possession of counterfeit products in stock and their display for sale.
The defendant was sentenced to two years, seven months, and fifteen days of imprisonment, under an initial semi-open prison regime, in addition to a fine.
The case is particularly noteworthy because it illustrates a practical consequence of this new criminal law approach: the genuine possibility of a conviction may affect an offender’s status as a first-time offender and the assessment of recidivism in subsequent offenses. This represents a substantial departure from repeated police incidents that conclude without a final criminal conviction.
The decision also clarified important aspects of the prosecution of these offenses.
The TJDFT characterized Article 169 as a conduct-based offense involving abstract endangerment, for which proof of actual harm is not required. The Court also accepted, under the circumstances of the case, the use of authenticity assessment reports prepared by the rights holders, provided that their findings were corroborated by other evidence.
There is also an important implication for the holders of the infringed rights.
Criminal proceedings that effectively lead to the offender being held accountable create a more concrete basis for addressing compensation for losses arising from unlawful activities, in contrast to successive incidents that conclude without an effective criminal law response.
The General Sports Law does not, of course, resolve every aspect of the counterfeiting problem. Nevertheless, it offers an important alternative to the longstanding framework established by the Industrial Property Law.
By providing for a penalty of two to four years of imprisonment for certain forms of commercial exploitation of counterfeit products associated with sports organizations, the legislature has established a criminal law response that differs substantially from the treatment afforded to traditional trademark offenses.
The experience under the General Sports Law should therefore prompt a broader reflection: if counterfeiting affects not only trademark owners but also the formal economy, tax revenues, competition, consumers, and labor relations, does it still make sense for trademark offenses under the general legislation to remain subject to such lenient penalties?
The recent TJDFT ruling demonstrates that, when legislation provides enforcement mechanisms proportionate to the scale of the problem, intellectual property protection becomes more effective and begins to produce tangible consequences under criminal law.
To learn more about the Court's decision, access the full text of the judgment (available in Portuguese) through the link below:
Comentários