Levi's secret marks remain a secret, rules court

The High Court of the Canton Zurich has affirmed (Case SB000650) the conviction of a wholesale trader for selling fake Levi's jeans. At first instance, the court allowed Levi's to conceal from the court and the defendant the details of secret marks found only on genuine products. It was the absence of these marks on the defendant's goods that identified them as counterfeit. The appellate court ruled that the decision to keep the marks secret did not violate the defendant's rights.

The wholesaler had been selling fake jeans to retail shops in Switzerland and was charged with dealing in counterfeit goods. At the first-instance criminal proceedings, the court accepted Levi's argument that the details of secret marks used to identify genuine Levi's products should not be disclosed in open court to prevent them from being used on counterfeit goods in the future. Therefore, the secret marks were neither disclosed to the defendant nor to the court.

Levi's provided an independent expert with details of the secret marks and he was instructed to test 50 pairs of jeans of the same type. The test sample included a number of the defendant's alleged counterfeits. The expert was not made aware of the source of the sample goods but managed to identify all the defendant's jeans as counterfeit. The expert's findings were confirmed by further evidence, such as quality defects, typographical errors on labels and buttons, and an unusually low purchase price. The court of first instance convicted the defendant based on this evidence.

The defendant appealed, arguing that when he purchased the jeans he had believed them to be parallel imports from an original source. He further contended that the court had violated his rights by refusing to allow the disclosure of essential evidence (ie, details of the secret marks) upon which his conviction was based.

The appellate court affirmed the conviction, ruling that the defendant's rights had not been violated. The court of first instance was free to base the conviction on the expert's opinion even though it had no knowledge of the reasoning behind the decision. The court also rejected the defendant's argument that he had purchased the jeans in good faith.

The defendant was given a five-month prison sentence on probation and ordered to pay a fine of SFr10,000.

J David Meisser and Bettina Bochsler, Meisser & Partners, Klosters