Three Dimensions of “Illegal Income” of Intellectual Property Crimes

2022-06-03 0 By

The eleventh amendment to the Criminal Law amended the crime of infringing intellectual property rights. One of the contents was to change the “sales amount” of the crime of selling goods with counterfeit registered trademarks into the “amount of illegal income” and other requirements.Thus, among the crimes of intellectual property infringement, the crime of selling counterfeit registered trademarks, the crime of selling infringing copies and the crime of infringing copyright are directly expressed in the provisions such as “amount of illegal income”, while the crime of counterfeiting registered trademarks, the crime of illegally manufacturing and selling illegally made registered trademarks.Although the crime of counterfeiting patent and the crime of infringing trade secrets are stated as “serious” in the provisions, the judgment of serious circumstances in the relevant judicial interpretation requires comprehensive consideration of the amount of illegal business or illegal income.In judicial practice, the amount of illegal business is used to determine the amount of criminal cases, while the amount of illegal income is used to determine the amount of criminal cases.The main reason lies in the adoption of the “amount of illegal gains” standard to determine the case needs to clarify three questions: how to define the connotation and extension of illegal gains?How is illegal income calculated and what expenses need to be deducted?It is difficult to collect evidence of illegal gains. Where should the burden of proof belong?Generally speaking, in the crime of infringing intellectual property, the amount of illegal income is the amount of profit.Because of the eight crimes of intellectual property infringement, illegal business amount, illegal income, sales amount and value of the four concepts are clearly defined.Relevant judicial interpretations specify different standards for the amount of illegal business and illegal gains for conviction and sentencing, but there is no standard calculation method for the specific costs and expenses deducted from “illegal gains”.In this regard, the author thinks that the identification rules of the amount of illegal income should be defined from three dimensions: the object of crime and the nature of the act, the connection between administrative law enforcement and criminal justice, judicial efficiency and fairness and justice.The first dimension: judging whether necessary expenditures need to be deducted from the different objects of crime and the nature of the crime.In general, if the operating cost is directly related to the object of the crime, it should be deducted;On the contrary, it is necessary to adhere to the practice of no deduction of operating costs.Different calculation methods can be adopted according to different illegal acts such as production, sales and service.First, the illegal income generated by production behavior.If the crime of counterfeiting a registered trademark is committed, “it shall be calculated by deducting the purchase price of raw materials from the total sales income of illegally produced goods”.For advertising expenses, logistics expenses, packaging expenses, gift purchasing expenses, house rent, employee wages, depreciation costs, loan interest, water, electricity and fuel costs and other accounting production and operation costs, because they are not directly related to the social interests reflected by the target of the crime, can not be deducted.Second, illegal income generated by sales behavior.For example, the traditional crime of infringing copyright, the crime of selling counterfeit registered trademarks, the crime of selling illegally manufactured registered trademarks, and the crime of selling infringing copies.”Calculated by deducting the purchase price of the sold goods from the sales income of the illegally sold goods”.The calculation of “postage” is treated differently: for buyers to pay postage, transportation costs are regarded as buyers’ shopping costs, “postage” should be deducted in the sales amount, and then not reflected in the illegal income.To the seller “free postage” cost, “free postage” is the seller’s marketing strategy, similar to advertising costs, will not be deducted.The amount of money sold for returned goods.The ownership of the goods shall be transferred after the seller delivers the goods to the buyer, and the sales shall be completed at this time. The refund of the returned goods shall be included in the sales income and shall not be deducted.Similarly, for production crimes, because counterfeit products have been completed, no deduction will be made.Third, the illegal income generated by the act of counterfeiting the registered trademark of the service.Service trademark is completely dependent on business behavior, how to identify the value of service?If the price of the services is clearly marked and no corresponding commodities are used, the total income shall be regarded as illegal income.Where both a commodity trademark and a service trademark are used, “the added value of the service trademark shall be determined on the basis of the role of the service trademark in the operation of the services provided”.The four special circumstances are determined as not to be deducted in full: the production and sale of fake and shoddy food, drugs, cosmetics, medical equipment and products prohibited by law that seriously endanger life and safety is a bad behavior that needs to be punished severely, the relevant costs are not deducted, and the illegal gains should be calculated in full.For software copyright infringement, due to the special software products, the cost is mainly research and development expenses. After the successful development, the cost does not change with the sales volume.The cost of crime is very low, and the illegal income is basically equal to the sales price, and the expenditure of purchasing the “objective carrier attached to the intellectual achievements” will not be deducted.For crimes of infringing copyright in the field of information network, the illegal income generated through membership recharge and advertising income shall be recognized in full.Among them, renting servers, buying servers and other criminal tools on the input is not deducted.Other persons directly responsible in the unit crime, petty laborers in the joint crime and joint offenders who provide funds, equipment, sites, technology, licenses and other convenient conditions for illegal activities shall be identified in full if their wage remuneration is taken as illegal gains.The second dimension: Judging from the effective connection between intellectual property administrative enforcement and criminal justice, China’s legal system for intellectual property protection is a trinity of civil, administrative and criminal protection.The three are both different from each other and connected with each other.Criminal, civil, administrative three kinds of legal relations of the illegal income amounts to the same thing, especially under the condition of the harm the social nature of basic same, the number of lines is watershed, distinguish between criminal and administrative responsibility in criminal justice, should not only refer to the administrative department for industry and commerce administrative punishment cases illegal income that way “, as far as possible the calculation of unified administrative law enforcement and criminal justice,The particularity of criminal crime should also be considered.First, it is calculated by gross profit (pre-tax profit), rather than net profit (after-tax profit), and the taxes and fees paid are not deducted.Second, the amount of illegal gains includes actual gains and deserved illegal gains.First of all, from the perspective of systematic interpretation, Article 9 of the Interpretation on Several Issues concerning The Specific Application of Law in Handling Criminal Cases of Intellectual Property Infringement by the Two High Schools defines the amount of sales in the crime of selling goods with counterfeit registered trademarks, and stipulates that it includes all illegal income earned and deserved.In the calculation of illegal gains, the identification of “gains” and “deserved” should be continued.Actual income refers to the amount actually received after production and sale.”Due” means the amount produced or purchased but not sold, and the amount sold but not received.Otherwise, can affect strike intensity, increase investigate difficulty.Secondly, from the perspective of the theory of crime constitution, according to the general determination standard of the completion of crime — “the theory of complete elements of crime constitution”, if the perpetrator completes the illegal production and sales act, it can be regarded as the result of the crime has taken place, and should be regarded as the completion of the crime.As for the standard of the completion of the implementation of illegal sales, it should be based on the perpetrator to deliver the infringing copies out of his control, and not on the balance of money and goods between the buyer and the seller.Finally, from the provisions of other crimes, similar situations are clearly stipulated in the crime of environmental pollution. For example, the “Interpretation of Several Issues concerning the Application of Law in Handling Criminal Cases of Environmental Pollution” issued by the “Two High Schools” in 2016 stipulates that “illegal income” refers to the income from criminal acts and all illegal income available.The third dimension: judging from the efficiency and fairness of law enforcement, the concept of illegal gains itself means to measure the seriousness of illegal activities by economic gains.In the calculation of illegal gains, the cost of law enforcement should be considered comprehensively and the value of fairness and efficiency of law should be balanced.Overly complicated evidence collection calculations not only consume public resources, but also hinder the fight against crimes and the realization of fairness and justice.Infringement of intellectual property crime has the infringement on the liquidity, the concealment of the sales channels, the price of randomness, in some cases illegally obtained evidence is only the defendant to master, even if the end all detection means, can not be obtained if the offender refuses to cooperate to obtain evidence, forensic investigation, judicial review is expensive.Of course, the investigation agency should bear the main responsibility of finding out the actual profit amount, but the defendant should bear the burden of proof when the defendant makes a reasonable expenditure excuse, such as the confusion of real and fake goods or false brush transaction.The procuratorial organ shall examine and judge the defense, the reasons for argumentation and the factual basis, and shall exclude or deduct those that meet the standards and procedural requirements of the proof entity; those that fail to meet the standards of proof shall not be accepted.Where only partial evidence of cost can be provided, the criminal presumption rule shall be applied to comprehensively judge the illegal gains by combining the evidence materials such as seized articles, sales list, defense of the doer, testimony of the witness and so on.If the defendant intentionally destroys account books, falsifies accounts, or obstructs or interferes in investigation by other means, thus making it impossible to find out the cost of production or sales, the defendant shall bear adverse legal consequences and directly identify the sales income as “illegal income”.(Author: The Third Branch of Shanghai People’s Procuratorate) Source: Procuratorial Daily