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	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Hatton, R. v [2007] EWCA Crim 1860 (12 July 2007) URL: http://www.bailii.org/ew/cases/EWCA/Crim/2007/1860.html Cite as: [2007] EWCA Crim 1860

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IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		12th July 2007

1. MR JUSTICE DAVIS: The appellant is a man now aged 54. On 1st March 2004 at the Crown Court at Mold the appellant pleaded guilty to a number of offences and, on 10th April 2007, he was sentenced by HHJ Merfyn Hughes QC as follows: on counts 1 to 8 and 10, applying a false trademark, counts 9, 11 and 12, possessing an article for making copies of a trademark and counts 13 to 16, distributing goods bearing a false trademark he received concurrent sentences of 18 months' imprisonment; an additional order for forfeiture was made. Against that sentence he now appeals by leave of the single judge.
2. The background facts are these. On 9 March 2006 a warrant issued under the Trademarks Act was executed at the appellant's home in Wrexham. Police officers were accompanied by Trading Standards officers and a representative of a trade association for the software publishing industry.
3. The appellant took them to an upstairs room and told them, "This is where I do all my copying." The room had shelving all round the walls. Officers seized computer equipment, some seven DVD rewriters, at least three of which were in working order, printers and empty plastic covers for DVDs. There were approximately 20,000 discs. About 500 of those were blank discs; 11,000 individual music albums were found on computer hard drives.
4. The retail value of the music seized, if it had been genuine, was £530,000. In addition, over 5,000 DVDs were seized, which would have had an average price of £15 to £16 each, and hundreds of computer games that retailed for much more than that.
5. The computers contained the necessary hardware and software to duplicate and compile video data, CDs and DVDs. The hard drives contained computer games and the necessary software to decrypt that material. There were also music files and movies. The computer also contained thousands of images which were designed and intended to be used as covers for discs and disc cases.
6. E-mails recovered listed films and computer games. They were ordered by various people. The fact that people ordered more than one copy of individual titles suggested that those people might themselves have been dealing to a certain extent on a commercial level.
7. The Crown's case was that the appellant was to an extent wholesaling to regular retail customers.
8. When interviewed, the appellant said that he sold discs for about £2 each, but the price of the CDs had been higher: it would have been about £5 in 2004. He said that he had no idea how much money he had made from the enterprise. He said that the majority of the master discs had been bought from a man in Manchester whose name he said he did not know. He bought the blank discs, he said, from a computer fair in Manchester at a cost of £15 per hundred.
9. It would appear that the unlawful activities of the appellant lasted for around four or five years between 2001 and 2006. It was ultimately accepted that he personally profited from his activities in a sum of around £10,000.
10. There was a basis of plea which was in these terms:

"1. In 2001 I began to purchase and collect compact discs, MP3 format discs, videos and digital versatile discs. This became a hobby and I quickly began to obtain a large amount of the said items.

2. I purchased the majority of these items from a computer fair in Manchester.

3. Many of the items were purchased for my own personal use. However I accept that between 2002 and 2006, I copied and supplied counterfeit MP3 discs, MP3 format discs and Digital versatile discs to friends and family.

4. On average I sold the said items for between £1 and £3 each and I accept that I made a profit from selling counterfeit discs.

5. I have never supplied discs directly to members of the public."

As for this fifth point, it appears that at one stage this was going to be an issue between the appellant and the prosecution and a Newton hearing had been mooted, but in the end this was not pursued.

11. Before the judge there was a pre-sentence report which, in effect, reported favourably on the appellant and emphasised that he had showed real remorse, and he was assessed as of low risk of reoffending. It is also the case that the appellant has no previous convictions. In addition, there were a number of character and personal references reporting very favourably on the appellant.
12. In the course of his clear and well structured sentencing remarks, the judge, amongst other things, said this:

"The retail value of goods found in your possession, namely in excess of one half a million pounds is not the only measure of your involvement but it is not irrelevant, if only to obtain a very broad indication of the level of your dishonest trading and that property does not of course include those discs which had already been sold on by you. It is recognised however that the level of sales which you made is very much less, although still substantial, estimated to be in the region of £10,000."

The judge then went on to emphasise the huge amount of materials and huge library which was found at the property, and noted that the equipment which was available for the appellant was a further measure of the sophistication required to copy the items and then to manufacture them for distribution. The judge further noted that the period between which he had been trading was one of at least four years.

13. The judge, having referred to a decision of the Court of Appeal in R v Woolridge, indicated that it was appropriate that the sentence to be imposed should contain some element of deterrence. In the circumstances he imposed the total sentence of 18 months' imprisonment to which we have referred.
14. We should perhaps add that, since being sent to prison a prison report has been provided to the court which reports in very favourable terms on the conduct of the appellant whilst in prison.
15. Mr Duffy, in the course of his excellent submissions on behalf of the appellant, drew attention to the early plea and to the previous good character of the appellant. He further said that the profits which the appellant made were not so very great: although he necessarily had to admit that the illegal activities extended over a very significant period of time. In addition he emphasised the basis of plea and in particular that the dealing was with family or friends - that is to say, people who would know the counterfeit nature of the goods they were buying. In addition he drew attention to the age and comparative poor health of the appellant.
16. Mr Duffy realistically accepts that the custody threshold was passed in this case; but he says that in current times prisons are, as is well known, overcrowded, and he emphasises that the sentence of imprisonment is by statute required to be the lowest term imprisonment that may be imposed, commensurate with the seriousness of the offence. In that regard Mr Duffy also has drawn attention to the decision of a constitution of this court in R v Stark [2007] EWCA Crim 252. Mr Duffy in effect says that this was not a case involving any violence or sexual conduct, that the damage to the public here was of a commercial nature and, as he would say, of a commercial nature only, and in effect what it comes to, he says (although not put exactly in these words) is that there are more deserving candidates than this appellant for receiving a sentence of this order: and mercy can properly be shown.
17. As far as the case of Woolridge [2005] EWCA Crim at 1086; [2006] 1 Cr App R (S) 13 is concerned, which was referred to by the judge, that, in our judgment, is highly material to the approach which was adopted by the judge in this case. In that case a sentence of nine months' imprisonment was upheld in respect of illegal trademark activities which, on any view, were significantly less serious than in the present case, involving lesser sums of money and a lesser period of illegal activity. But of course it can be said that the facts nevertheless were special to that particular case.
18. However, these general points were made by Silber J (giving the judgment of the court) in paragraph 13 of his judgment, where this was said:

"Our starting point is to bear in mind that trademark offences of the kind committed by this appellant entail three serious matters, of which the first is that the appellant was dishonestly exploiting and taking advantage of the reputation of the owners of the trademarks for his financial benefit. The second consequences is the purchasers of the counterfeit goods were deceived into buying goods which they would not otherwise have bought or, at least, not bought at the price which was paid for them. As I have explained, was a finding by the judge that only an expert would have realised that these goods were counterfeit goods. The third consequence of the appellant's conduct is that the appellant was receiving money from the purchasers which he would not have received if the counterfeit trademarks had not been put on the goods."

Pausing there, Mr Duffy is entitled to say that the second point is not so material in the present case, as here most of the purchasers, if not all of them, from this appellant were presumably aware of the counterfeit nature of the goods being provided.

19. However, Mr Justice Silber also went on to say this, at paragraph 14:

"It seems clear to us that the sentence imposed for trademark offences has to contain some element of deterrence, especially as trademark offences are often difficult, time-consuming and expensive to detect. It is after all the duty of the courts to protect the interests of the owners of the trademarks, and this means frequently sentencing offenders for trademark offences to prison."

20. Other cases which perhaps are material in it context include the decision of a constitution of this court in R v Gross [1996] 2 Cr App R (S) 189 and the more recent decision of a constitution of this court in R v Kirkwood [2006] 2 Cr App R (S) 79, [2005] EWCA Crim 3534. That last case again was a case on its own facts. However, it would appear that the activities there had at least some similarities to the present, although arguably in fact were less serious. Relatively small profits were made in that case, the sales started and were made directly to family and friends and the period of the illegal activity was around three years. It is to be noted that the court in that case imposed a sentence of 21 months for that particular offending.
21. If one concentrates simply on the personal circumstances and personal mitigation available to this appellant, there is much indeed to be said for Mr Duffy's submissions. But this court, as any sentencing court, also has to have regard to the circumstances of the offences themselves. It is to be borne in mind that counterfeit and illegal activities of this kind do have a damaging impact on the public. Further, commercial activities of manufacturing and retailing companies specialising in this field and their profits and ultimately the jobs of their employees are affected by what people such as the appellant are doing. It seems necessary in such circumstances for a court, at least in the normal way, to consider including a deterrent element in sentencing for offences of this kind. In the present case, this offending was of a serious and sustained nature; and whilst we acknowledge the personal situation of this particular appellant, and whilst it might perhaps be said that this sentence was a relatively severe one, we are not persuaded that the sentence is manifestly excessive. Accordingly this appeal is dismissed.