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2025 WIPO IP Judges Forum Informal Case Summary - Court of Cassation of Armenia [2021]: Gana Group Plus LLC v Zakaria Avetisyan, Case No. KD/0011/11/19

This is an informal case summary prepared for the purposes of facilitating exchange during the 2025 WIPO IP Judges Forum.

 

Session 8: Criminal Enforcement

 

Court of Cassation of Armenia [2021]: Gana Group Plus LLC v Zakaria Avetisyan, Case No. KD/0011/11/19

 

Date of judgment: 27 August, 2021
Issuing authority: Court of Cassation of Armenia
Level of the issuing authority: Final Instance
Type of procedure: Judicial (Criminal)
Subject matter: Enforcement of IP and Related Laws, Trademarks  
Plaintiff:  Gana Group Plus LLC
Defendant:  Zakaria Avetisyan
Keywords: Trademark infringement, unlawful use, criminal liability, damages, civil vs. criminal jurisdiction, procedural violations

 

Basic Facts:  In June 2019, a criminal case was initiated against Zakaria Avetisyan under Article 197 of the Criminal Code of Armenia (illegal use of a trademark causing substantial damage).

The Investigative Committee closed the case on 29 June 2019, concluding that:

  • The disputed trademarks (“Ապարան թան (Aparan tan)” and “Ապարանի ջրով և տնական մածուկով թան, ցմփորիկ (Aparani jrov ev tnakan matsunov tan, tsmporik)”) were not identical but similar․
  • The word trademark “Aparan tan” was not registered under Gana Group Plus LLC’s name. Although the word trademark “Ապարան թան” (“Aparan Tan”) was not registered as such, the case materials included extracts from the website of the Intellectual Property Agency of the Ministry of Economy showing that, while the word mark was not officially registered, the registered figurative trademark nevertheless contained the wording “Aparan tan”․ Moreover, apart from the word “Aparan,” the other inscriptions on the marks were not independently subject to protection. According to the Agency’s letter, the use of the word “Aparan” in both marks was considered confusingly similar. In addition, the mark was registered in a combination of colors — light and dark green, black and white, blue, gold, red, and yellow — which also appeared in the figurative trademark used by Zakaria Avetisyan (“Aparani jrov ev tnanakan matsukov tan, tsmporik”).
  • No substantial damage to the Gana Group Plus has been proven, as its 2019 turnover even exceeded 2018 levels.

Gana Group Plus appealed, but both the Prosecutor and the First Instance Court rejected the complaint. The Criminal Court of Appeal, however, on 19 November 2019, overturned the first instance decision, ordering further investigation to determine possible consumer confusion and potential damages. Zakaria Avetisyan filed a cassation complaint against the appellate ruling.

Held: The Court of Cassation sided with Avetisyan and quashed the Court of Appeal decision, reinstating the First Instance Court’s decision to reject the complaint. The Court of Cassation held that the Court of Appeal exceeded its jurisdiction by making determinations related to trademark ownership and consumer confusion, which are civil and administrative matters, not criminal. It emphasized that criminal procedural mechanisms cannot be used to resolve civil disputes or establish facts about intellectual property ownership. The Court of Cassation found that there was no evidence demonstrating substantial damage, a necessary element for criminal liability under the cited article.  Accordingly, the Court of Cassation held that the Court of Appeal’s decision violated Articles 290 and 358 of the Criminal Procedure Code and was annulled.

Relevant Holdings in relation to Criminal Enforcement: The Court of Cassation emphasized a clear distinction between civil and criminal remedies in trademark disputes, reaffirming its settled precedent that criminal procedure cannot be used as a shortcut to resolve civil intellectual property controversies. Questions such as who owns a trademark or whether two signs are confusingly similar fall within the jurisdiction of civil or administrative courts, not criminal proceedings. Allowing criminal mechanisms to determine these issues would improperly replace civil procedure rules with criminal procedure standards, undermining legal certainty and risking contradictory judgments. Under Article 197 of the Criminal Code, criminal liability for illegal trademark use arises only when investigators can establish both the objective and subjective elements of the offense — namely, unauthorized use of another’s registered and protected mark, intent, and substantial damage. If the existence or scope of the IP right itself is unsettled, that must first be resolved through civil or administrative procedures before pursuing criminal prosecution. In this case, the Court of Appeal overstepped by ordering investigators to send market inquiries to retailers to assess consumer confusion and potential damages — matters that the Court of Cassation considered inherently civil law questions that could not cure the lack of criminal elements. Moreover, the reasoning relied on materials suggesting a registered figurative mark containing “Aparan tan” but the Cassation Court held that determining such IP registration and ownership issues lies outside the criminal forum. Consistent with its prior jurisprudence, the Court reiterated that civil and criminal procedures serve different goals and apply different standards, and criminal procedural tools cannot be used to litigate civil relationships or establish civil law facts.

The Court of Cassation emphasized a clear distinction between civil and criminal remedies in trademark disputes, reaffirming its settled precedent that criminal procedure cannot be used as a shortcut to resolve civil intellectual property controversies. Questions such as who owns a trademark or whether two signs are confusingly similar fall within the jurisdiction of civil or administrative courts, not criminal proceedings. Allowing criminal mechanisms to determine these issues would improperly replace civil procedure rules with criminal procedure standards, undermining legal certainty and risking contradictory judgments. Under Article 197 of the Criminal Code, criminal liability for illegal trademark use arises only when investigators can establish both the objective and subjective elements of the offense — namely, unauthorized use of another’s registered and protected mark, intent, and substantial damage. If the existence or scope of the IP right itself is unsettled, that must first be resolved through civil or administrative procedures before pursuing criminal prosecution. In this case, the Court of Appeal overstepped by ordering investigators to send market inquiries to retailers to assess consumer confusion and potential damages — matters that the Court of Cassation considered inherently civil law questions that could not cure the lack of criminal elements. Moreover, the reasoning relied on materials suggesting a registered figurative mark containing “Aparan tan” but the Cassation Court held that determining such IP registration and ownership issues lies outside the criminal forum. Consistent with its prior jurisprudence, the Court reiterated that civil and criminal procedures serve different goals and apply different standards, and criminal procedural tools cannot be used to litigate civil relationships or establish civil law facts.

In its decision, the Court of Cassation underscored that substantial damage is a necessary element for establishing criminal liability under Article 197 of the Criminal Code, which penalizes the illegal use of a trademark only when such use causes significant harm to the rightsholder. The Court explained that the objective side of the offense requires not only proving the unauthorized use of another’s registered and protected trademark but also demonstrating that this conduct resulted in substantial financial damage. In the present case, the investigative body and the lower courts found no evidence that the actions of Zakaria Avetisyan caused material harm to Gana Group Plus LLC. On the contrary, the company’s 2019 turnover exceeded the previous year’s figures, undermining any claim of economic loss. The Court stressed that without concrete proof of damage — such as decreased sales, lost market share, or other measurable financial detriment — the threshold for criminal liability under Article 197 cannot be met. Therefore, in the absence of substantiated damage, the dispute remains within the scope of civil remedies rather than constituting a criminal offense.

Relevant Legislation: Article 197 of Criminal Code of Armenia (2003); Articles 1171-1178 of Civil Code of Armenia; Law on Trademarks of Armenia, Articles 290, 358, 398 of  Criminal Procedure Code of Armenia(1998).