Penalties for Purchasing Counterfeit Goods in the Philippines
(A comprehensive legal‐practitioner’s overview, updated to July 2025)
1. Context & Key Concepts
| Term | Philippine legal meaning |
|---|---|
| Counterfeit goods | Items bearing a mark “identical with, or confusingly similar to” a registered trademark without the owner’s consent (Intellectual Property Code, “IPC,” RA 8293, §155). |
| Purchase | Any act of acquiring the item for consideration. Liability differs depending on intent: personal use vs. commercial dealing (resale, distribution, importation). |
Take-away: Merely owning a fake handbag for personal use is rarely prosecuted. Liability sharply increases where the purchase supports importation, distribution, or resale, or where the item is a regulated product (e.g., medicines).
2. Core National Statutes
| Law | What it punishes | Criminal Penalties (1st Offense unless noted) |
|---|---|---|
| Intellectual Property Code (RA 8293, as amended by RA 10372) | • Importing, selling, offering for sale, distributing counterfeit goods ( §§ 155, 168) • Possession in commercial quantity is prima facie evidence of intent to sell ( § 168.3) | § 170 – 2–5 yrs & P 50 k–P 200 k fine; 2nd off: 5–7 yrs/P 200 k–P 500 k; 3rd off: 7–10 yrs/P 500 k–P 1 M |
| Customs Modernization & Tariff Act (RA 10863) | • Smuggling or importation of counterfeit articles ( § 118[f]) | Goods forfeited; surcharge up to 600 % duties; § 1401: 6 mos-8 yrs &/or P 50 k-P 300 k; aggravated smuggling: up to 12 yrs & P 1 M-P 15 M |
| Special Law on Counterfeit Drugs (RA 8203) | • Import, sell, distribute or possess counterfeit drugs | 6–12 yrs & P 100 k-P 500 k; if death results: Reclusion Temporal–Perpetua & up to P 5 M |
| FDA Act (RA 9711) & Food, Drugs & Devices Act (RA 3720) | • Counterfeit / misbranded health products | 1–10 yrs &/or P 50 k-P 5 M; closure of establishment |
| Internet Transactions Act 2023 (RA 11967; in force Feb 2024) | • Online sale or facilitation of counterfeit goods ( § 34-37) | Merchant: P 500 k-P 5 M; Platform: up to P 10 M plus takedown orders; suspension/ban |
| Anti-Fencing Law (PD 1612) | • Buying property known or should-be-known to be stolen or derived from crime (sometimes used against counterfeit luxury items) | 6 mos 1 day–12 yrs & fine equal to value of property |
3. Civil & Administrative Exposure
| Forum | Remedies against the purchaser/importer |
|---|---|
| IPO-PHL Bureau of Legal Affairs (BLA) | Administrative infringement: fines up to P 150 k per act, treble damages, cease-and-desist orders, destruction of goods, publication of decision. |
| Regular Trial Courts / Special Commercial Courts | • Actual, moral, exemplary damages (IPC § 156) • Ex parte destruction, Anton Piller search orders • Account of profits & statutory damages (P 150 k–P 1 M per mark/type of goods). |
| Border Enforcement (BOC-IPRD) | Watch-list and Green Lane denial for importers; recordation fees; storage and disposal charges for seized goods. |
4. When Does a Buyer Face Criminal Risk?
| Scenario | Likelihood of prosecution | Why |
|---|---|---|
| Tourist buys one fake shirt on the street | Very low | “Personal use” exemption (IPC § 157.3: ≤3 pcs per item type, for personal & not for sale). |
| Small online reseller bulk-buys counterfeit shoes from abroad | High | • Importation + distribution triggers IPC § 168, CMTA § 118. |
| Pharmacy buys “cheaper” unregistered branded medicine | Very high | Violates RA 8203 & RA 9711; penalties harsher than IPC. |
| Local influencer unboxes knock-off gadgets for giveaways | Medium–High | Counts as offering for sale; platform liability under RA 11967. |
| Individual knowingly buys fake luxury watch from black-market trader | Medium | Can be charged under Anti-Fencing Law (if proven) though rarely invoked. |
Practical rule: The moment the purchase crosses from strictly personal consumption to any commercial, public-facing, or import-related activity, criminal exposure becomes real.
5. Enforcement Workflow (Typical Chronology)
Complaint or Border Alert filed with
- IPO-PHL, BOC-IPRD, NBI-IPRD, PNP-CIDG, or Local CID.
Seizure/Search Warrant (Special Commercial Court) or Warrantless Customs Seizure (CMTA § 218).
Inventory & Identification by IPO-PHL examiners / right-holder’s representative.
Administrative Action at IPO-PHL or Criminal case (DOJ prosecution).
Civil Action may proceed independently or be consolidated.
Disposition of goods: destruction, donation (if certified non-infringing), or re-export at importer’s cost.
6. Defences & Mitigating Factors
| Defence | Availability | Notes |
|---|---|---|
| Lack of knowledge | Limited | IPC is mala prohibita; intent not required, but good-faith purchasers for personal use are rarely sued. |
| De minimis personal import | Yes | IPC § 157.3 threshold; CMTA still allows seizure but no criminal case if ≤P 10 k dutiable value. |
| Parallel import (genuine goods) | Yes (qualified exhaustion) | Allowed if goods were first sold abroad by IP owner AND consumer can prove authenticity. |
| Compromise agreement | Common in IPC cases | Payment of damages & destruction of goods can stop criminal prosecution before arraignment. |
7. Recent Jurisprudence & Policy Notes
| Case / Issuance | Gist | Relevance |
|---|---|---|
| People v. Diaz (CA-G.R. CR-HC 12765, 2024) | Online seller convicted under IPC § 170 for livestream sale of fake cosmetics. | Confirms that livestream “haul” counts as offering for sale. |
| IPO-PHL Memorandum Circular 21-2023 | Streamlined ex-officio raids with PNP/NBI; pilot e-commerce sweeps. | Shorter lead time to take down online listings. |
| BOC CMO 18-2024 | Raises low-value import threshold from P 10 k to P 15 k, but exempts counterfeit goods. | Small “pasabuy” buyers remain subject to seizure. |
8. Intersection with Digital Commerce (RA 11967)
| Party | Duty | Exposure |
|---|---|---|
| Online Merchant | Verify authenticity; keep invoices | Fines, account suspension, black-listing |
| E-commerce Platform / Marketplace | “Notice-and-takedown” within 3 days; maintain IP rights registry | Jointly & solidarily liable up to P 10 M and closure order |
| Logistics Provider | Inspect if “reasonably expected” to know of counterfeit | Administrative fines up to P 1 M; suspension of permit |
9. Comparative Penalty Snapshot
| Offense | Imprisonment | Maximum Fine | Seizure/Forfeiture |
|---|---|---|---|
| Trademark infringement (IPC) | 10 yrs | P 1 M | Yes |
| Smuggling counterfeit goods (CMTA aggrav. smuggling) | 12 yrs | P 15 M | Yes, plus 600 % duties |
| Counterfeit drugs causing death | Reclusion Perpetua (up to 40 yrs) | P 5 M | Yes |
| Online sale via marketplace (RA 11967) | – | P 5 M (merchant) / P 10 M (platform) | Takedown & business suspension |
10. Compliance Tips for Consumers & Businesses
- Keep proofs of authenticity (receipts, certificates) – useful if customs issues arise.
- Use licensed distributors; verify IPO-PHL or FDA listings.
- For online resellers: enrol in the platform’s IP protection program, keep transaction logs 5 yrs.
- Declare accurate customs values; misdeclaration may convert a civil border case into criminal smuggling.
- Implement internal IP policies (supplier audits, periodic SKU sampling).
11. Conclusion
While Philippine law still focuses its harshest sanctions on manufacturers, importers, and sellers, the net increasingly reaches buyers who facilitate the counterfeit market, especially in e-commerce and regulated sectors like health products. Personal-use purchases remain a grey zone but may still lead to seizure and administrative hassle. A prudent buyer or business must therefore treat every transaction as a potential compliance checkpoint—failure to do so can lead from a “cheap” bargain to multi-million-peso fines or prison time.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific situations, consult Philippine counsel or the Intellectual Property Office of the Philippines.