How Are Counterfeit Luxury Goods Sold Through Live Streams?
Introduction
Social-media live-streaming has made it easy for online merchants to display, promote, and sell luxury goods to large audiences in real time. The same features that make live commerce attractive to legitimate businesses—instant interaction, rapid transactions, and broad reach—may also be used to distribute counterfeit bags, watches, apparel, footwear, and accessories.
In the Philippines, the sale or distribution of counterfeit luxury goods may give rise to trademark infringement, unfair competition, false designation of origin, civil liability, criminal prosecution, customs enforcement, and online takedown measures. The legal consequences may apply even when the merchant has not completed an actual sale, provided the statutory requirements are established.
What Laws Govern Counterfeit Luxury Goods?
The principal statute is the Intellectual Property Code of the Philippines, or R.A. No. 8293. Its provisions on trademark infringement, unfair competition, false designation of origin, civil remedies, criminal penalties, and destruction of infringing materials are particularly relevant to live-streaming commerce.
Under Section 155 of R.A. No. 8293, trademark infringement includes the unauthorized use in commerce of a reproduction, counterfeit, copy, or colorable imitation of a registered mark where the use is likely to cause confusion, mistake, or deception. The provision covers the sale, offering for sale, distribution, advertising, and preparatory steps connected with the sale of goods or services. It also provides that infringement may occur even without an actual sale of the goods.
The Supreme Court has recognized that infringement is committed upon the unauthorized commercial use of the mark when the statutory likelihood-of-confusion requirement is present. (Ginebra San Miguel, Inc. v. Tanduay Distillers, Inc., G.R. Nos. 196372, 210224, 216104 and 219632, 2022) [Ginebra San Miguel, Inc. v. Tanduay Distillers, Inc. (2022)](#J1.134)
When Does Live-Streaming Become Trademark Infringement?
A live-streaming transaction may implicate trademark infringement when an online merchant, without authorization, displays or uses a registered luxury mark in connection with the advertising, offering, sale, distribution, or preparation of counterfeit goods.
Typical conduct may include:
- Displaying counterfeit handbags, shoes, watches, clothing, or accessories bearing a protected mark;
- Using the luxury brand’s name, logo, packaging, or distinctive design to promote the merchandise;
- Inviting viewers to reserve or purchase the goods during the broadcast;
- Using product photographs, captions, hashtags, or account names that suggest authorization or affiliation; and
- Accepting orders through comments, direct messages, payment links, or other digital channels.
The essential inquiry is not merely whether the merchant made a completed sale. It is whether the unauthorized use was connected with commerce and was likely to cause confusion, mistake, or deception as to the source, sponsorship, affiliation, or approval of the goods.
How Does Unfair Competition Differ?
Trademark infringement generally focuses on the unauthorized use of a protected mark. Unfair competition, by contrast, may arise when the seller gives counterfeit goods the general appearance of goods belonging to another manufacturer or dealer and thereby induces purchasers to believe that the goods came from, or were authorized by, the legitimate business.
Section 168.3(a) of R.A. No. 8293 covers the appearance of the goods, their packaging, devices, words, or other features that are likely to influence purchasers to believe that the goods came from a manufacturer or dealer other than the actual source.
The Supreme Court has described unfair competition as passing off, or attempting to pass off, the goods or business of one person as those of another, with the probable effect of deceiving the public. (Republic Gas Corporation, et al. v. Petron Corporation, et al., G.R. No. 194062, 2013) [Republic Gas Corporation v. Petron Corporation (2013)](#J9.13)
Accordingly, a live seller may face an unfair-competition claim even when the conduct involves more than the literal copying of a trademark. The use of similar packaging, product presentation, trade dress, labels, or other source-identifying features may be relevant.
What Is False Designation of Origin?
Section 169.1 of R.A. No. 8293 prohibits the use in commerce of a word, term, name, symbol, device, or combination thereof that constitutes a false designation of origin or a false or misleading representation of fact.
The provision applies when the conduct is likely to cause confusion, mistake, or deception concerning the seller’s affiliation, connection, or association with another person, or concerning the origin, sponsorship, or approval of the goods, services, or commercial activity.
For example, an online merchant may create legal exposure by representing that it is an authorized distributor, official reseller, partner, outlet, or affiliated seller of a luxury brand when no such relationship exists.
What Enforcement Measures Are Available Online?
Administrative Takedown Orders
The Internet Transactions Act of 2023, or R.A. No. 11967, authorizes the Department of Trade and Industry Secretary, after investigation or verification, to issue an ex parte takedown order directing the removal of an online listing or offer.
The authority covers online offers involving prohibited or regulated goods, including counterfeit goods, when their prohibited nature is apparent from the photograph or description in the post. It also covers online offers previously subjected to a takedown order and subsequently reposted by the seller.
This mechanism is directed at removing the online listing or offer. It does not necessarily resolve the trademark owner’s separate claims for damages, injunction, criminal prosecution, seizure, or destruction of infringing merchandise.
Customs Enforcement
Section 166 of R.A. No. 8293 prohibits the entry into the Philippines of imported merchandise that copies or simulates a registered mark or trade name, or that is calculated to make the public believe that the goods were manufactured in the Philippines or in another country or locality where they were not actually manufactured.
Luxury goods sold through social media may therefore be subject to customs intervention when the merchandise is imported and bears infringing marks or misleading trade names. Brand owners may assist enforcement by recording relevant information and furnishing facsimiles or copies of their registered marks to the Bureau of Customs in accordance with applicable procedures.
Search Warrants and Criminal Investigations
Where counterfeit goods are believed to be stored in a residence, warehouse, shop, or other location, the aggrieved trademark owner or enforcement agency may consider criminal investigative remedies, including the application for a search warrant when the requirements of the Rules of Criminal Procedure are satisfied.
The Supreme Court has held that applications for search warrants in anticipation of criminal actions for intellectual-property violations are governed by Rule 126 of the Rules of Criminal Procedure. Probable cause depends on facts and circumstances that would lead a reasonably prudent person to believe that an offense was committed and that the objects sought are connected with the offense. (Century Chinese Medicine Co., et al. v. People of the Philippines, et al., G.R. No. 188526, 2013) [Century Chinese Medicine Co. v. People (2013)](#J3.12)
Evidence may include recordings of live streams, screenshots, product listings, transaction records, payment confirmations, delivery documents, witness statements, test purchases, and seized merchandise. The evidence should establish both the identity of the seller and the connection between the seller’s online activity and the counterfeit goods.
What Remedies May a Trademark Owner Seek?
Under R.A. No. 8293, a trademark owner may pursue civil remedies such as injunction, damages, and other relief allowed by law. The owner may also seek the disposition or destruction of infringing goods and the destruction of labels, signs, packages, advertisements, molds, plates, matrices, and other means used to produce the infringing materials.
Section 157.1 authorizes the court, after a violation of the rights of the registered-mark owner has been established, to order that infringing goods be disposed of outside the channels of commerce or destroyed. Section 157.2 further provides that, for counterfeit goods, merely removing the trademark is generally insufficient to permit their release into commerce, except in exceptional cases determined under the regulations.
[Intellectual Property Code of the Philippines (R.A. No. 8293)](#L1.174)
What Criminal Penalties May Apply?
Section 170 of R.A. No. 8293 provides criminal penalties, independent of civil and administrative sanctions, for violations of Sections 155, 168, and 169.1. The stated penalty is imprisonment of two to five years and a fine of ₱50,000 to ₱200,000.
Criminal liability requires proof of all the elements of the offense beyond reasonable doubt. In criminal trademark-infringement cases, likelihood of confusion is a material issue. The Supreme Court has emphasized that when the prosecution fails to establish the required likelihood of confusion beyond reasonable doubt, an acquittal may follow. (Diaz v. People of the Philippines, et al., G.R. No. 180677, 2013) [Diaz v. People (2013)](#J4.4)
For criminal unfair competition, the prosecution must establish the statutory elements, including the deceptive appearance of the goods and the required intent or purpose to deceive and defraud, where applicable to the charge and evidence presented.
Can Online Platforms Be Asked to Remove Listings?
Brand owners should promptly preserve the online material and report counterfeit listings to the platform. A platform complaint may result in the removal or restriction of a listing under the platform’s policies, but platform action does not replace remedies under R.A. No. 8293 or R.A. No. 11967.
A formal complaint should identify the protected mark, registration details, allegedly counterfeit goods, seller account, URLs or account identifiers, dates and times of the live streams, screenshots, recordings, and any available transaction information. The complainant should also explain why the goods are counterfeit or why the listing falsely suggests authorization or affiliation.
What Evidence Should Brand Owners Preserve?
Live-stream content may disappear quickly. Evidence should therefore be collected before the seller deletes the broadcast, changes the account, or reposts the merchandise through another profile.
- Screen recordings showing the live stream, seller identity, comments, prices, product claims, and purchase instructions;
- Screenshots containing the account name, date, time, listing description, hashtags, and displayed marks;
- Copies of the brand’s Philippine trademark registrations and evidence of ownership or authorization;
- Records of test purchases, including payment confirmations, delivery records, packaging, and the goods received; and
- Statements from investigators, buyers, platform representatives, or other witnesses who can authenticate the records.
Evidence should be preserved in a manner that allows the complainant to explain when, where, and how it was obtained. Where litigation or criminal proceedings are contemplated, counsel should assess authentication, chain-of-custody, privacy, and electronic-evidence requirements.
What Should Online Merchants Do?
Merchants should verify the authenticity and source of luxury goods before displaying or selling them online. They should not describe themselves as authorized distributors or official resellers without a genuine and documentable relationship with the brand owner.
Merchants should also avoid using a luxury brand’s name, logo, photographs, packaging, or other identifying features in a manner that suggests sponsorship or approval. Disclaimers may not cure conduct that otherwise creates confusion or amounts to passing off.
What Should Brand Owners Do During an Enforcement Operation?
Brand owners should coordinate with intellectual-property counsel and, when appropriate, the Intellectual Property Office of the Philippines, the Department of Trade and Industry, the Bureau of Customs, the National Bureau of Investigation, or the Philippine National Police.
The response should normally begin with evidence preservation and seller identification. The brand owner should then determine whether the appropriate remedy is a platform complaint, administrative takedown request, customs action, civil case, criminal complaint, or a combination of remedies.
Care should be taken to distinguish genuine parallel imports, unauthorized resales of authentic goods, gray-market activity, and counterfeit merchandise. The legal and evidentiary consequences may differ depending on the authenticity of the goods, the registration status of the mark, the seller’s representations, and the existence of consumer confusion.
Conclusion
Counterfeit luxury goods sold through social-media live streams may expose online merchants to trademark-infringement, unfair-competition, false-designation, customs, civil, administrative, and criminal consequences. The absence of a completed sale does not necessarily eliminate liability when the unauthorized commercial use and likelihood-of-confusion requirements are established.
Brand owners should act quickly to preserve disappearing digital evidence, identify the seller and supply chain, report the listing, and select the appropriate enforcement remedy. Online merchants, in turn, should verify authenticity, avoid misleading brand references, and maintain records demonstrating lawful sourcing and authorization.
About Nicolas and De Vega Law Offices
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