Article 49 - Principles of legality and proportionality of criminal offences and penalties
Article 51 - Field of application
Key facts of the case:
Reference for a preliminary ruling – Enforcement of intellectual property rights – Directive 2004/48/EC – Article 13 – Criminal procedure – Scope – Harm suffered by the trade mark proprietor as a constituent element of the offence – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – Article 61 – Charter of Fundamental Rights of the European Union – Article 51(1) – Implementation of EU law – Powers – Article 49(1) and (3) – Legality and proportionality of penalties.
Outcome of the case:
On those grounds, the Court (Fourth Chamber) hereby rules:
1. Article 49(1) of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that the principle of the legality of criminal offences and penalties does not preclude national legislation which provides, where a trade mark is used in the course of trade without the consent of the holder of the exclusive right, that the same conduct may be categorised both as an administrative offence and as a criminal offence, without that legislation including criteria allowing a distinction to be drawn between, on the one hand, the administrative offence and, on the other, the criminal offence, the offence being described in similar, or identical, terms, in the criminal law and the law on trade marks.
2. Article 49(3) of the Charter of Fundamental Rights of the European Union must be interpreted as precluding a national legal provision that provides for a custodial sentence of a minimum of five years where a trade mark is used, repeatedly or with significant harmful effects, in the course of trade without the consent of the holder of the exclusive right.
22) In the second place, the referring court states that the principle of the legality of criminal offences and penalties, enshrined in Article 49(1) of the Charter, presupposes that legislation coming within the scope of EU law clearly lays down the limits of the conduct that constitutes a criminal offence and, in particular, determines the constituent elements of the offence in question. The Bulgarian legislation contains provisions which define the same conduct, namely use in the course of trade of a trade mark without the consent of the holder of the exclusive right, as an administrative offence (Article 81(1) of the old ZMGO and Article 127(1) of the new ZMGO) and as a criminal offence (Article 172b of the Criminal Code). Nevertheless, that legislation does not include any criterion to differentiate categorisation as a criminal offence and as an administrative offence. That absence of a clear and precise criterion leads to contradictory practice and unequal treatment of litigants who have committed practically the same acts.
23) In the third place, the referring court seeks clarification as to whether the principle of proportionality enshrined in Article 49(3) of the Charter precludes legislation such as the Bulgarian legislation, having regard to the severity of the penalties provided for with a view to punishing the offence under Article 172b(2) of the Criminal Code, namely a long term of imprisonment, together with a heavy fine. That court states, in that context, that the possibilities to reduce or suspend the sentence are limited and that those penalties are accompanied by the confiscation and destruction of the counterfeit goods.
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34) By its third and fourth questions, the referring court seeks an interpretation of Article 49 of the Charter for the purpose of ascertaining whether that article is compatible with Article 172b(2) of the Criminal Code.
35) At the outset, it must be borne in mind that the Court has jurisdiction to reply to the questions referred for a preliminary ruling where the legal situation which gave rise to the main proceedings comes within the scope of EU law. In that regard, it is settled case-law that any provisions of the Charter relied upon cannot, of themselves, form the basis for such jurisdiction (judgment of 24 February 2022, Viva Telecom Bulgaria, C‑257/20, EU:C:2022:125, paragraph 128 and the case-law cited).
36) The Austrian Government argues that the Court has no jurisdiction to reply to the third and fourth questions. According to that government, the criminal provisions at issue in the main proceedings do not amount to an implementation of EU law for the purposes of Article 51(1) of the Charter and they cannot, therefore, be assessed in the light of Article 49 of the Charter.
37) In that regard, according to Article 51(1) of the Charter, the provisions of the Charter are addressed to the Member States only when they are implementing EU law. Accordingly, as follows from settled case-law, the fundamental rights guaranteed by the Charter are applicable in all situations governed by EU law, but not outside such situations (judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraphs 17 and 19 and the case-law cited, and of 5 May 2022, BPC Lux 2 and Others, C‑83/20, EU:C:2022:346, paragraphs 25 and 26).
38) The Court previously held that when Member States perform their obligations resulting from an international agreement entered into by the European Union, which forms an integral part of EU law from its entry into force, they must be considered to be implementing EU law, within the meaning of Article 51(1) of the Charter (see, to that effect, judgment of 6 October 2020, Commission v Hungary (Higher education), C‑66/18, EU:C:2020:792, paragraphs 69 and 213).
42) It follows that, as the Advocate General noted in point 30 of his Opinion, when Member States are discharging their obligations under the TRIPS Agreement, including those arising from Article 61 thereof, they must be considered to be implementing EU law, within the meaning of Article 51(1) of the Charter.
