A Dutch SaaS company receives a cease-and-desist letter claiming that a core feature of their software infringes on a competitor’s patent. The founder disputes the claim, believing their solution is genuinely innovative. They continue operating while seeking legal advice. Three months later, the police show up at their office. What started as a civil intellectual property dispute has escalated into a criminal investigation.
This scenario, while not common, is far from impossible. Most IP conflicts are resolved through civil litigation—cease-and-desist letters, injunctions, damages claims. But under certain circumstances, the Public Prosecution Service (OM) can launch criminal proceedings. For tech entrepreneurs, understanding where that line lies is critical. A misstep can mean not just financial liability, but potential criminal sanctions including fines or even imprisonment.
This article examines when and why a civil IP dispute can become a criminal matter under Dutch law, what factors trigger that shift, and what tech entrepreneurs can do to minimise the risk.
Civil versus criminal enforcement of IP rights
The vast majority of intellectual property disputes are handled through civil courts. A rights holder will typically file a lawsuit seeking an injunction to stop the infringing activity, plus damages to compensate for losses. This is governed by provisions such as Article 29a of the Dutch Copyright Act (Auteurswet), which grants copyright holders the right to demand that infringement cease and to claim compensation.
However, Dutch law also includes criminal provisions designed to protect IP rights. These are not intended as a primary enforcement mechanism, but as a deterrent against serious, deliberate violations. Key statutes include:
- Article 31 of the Copyright Act (Auteurswet): criminalises wilful infringement of copyright
- Article 337 of the Criminal Code (Sr): the so-called “counterfeiting article,” which addresses trademark infringement and passing off
- Article 79 of the Patents Act 1995 (Rijksoctrooiwet 1995, ROW 1995): establishes criminal liability for certain patent violations
These provisions share a common requirement: intent (opzet). Without proof that the accused acted deliberately, criminal liability cannot attach. This is a higher threshold than civil liability, where negligence or even strict liability may suffice.
Criminal enforcement is also subject to the principle of subsidiarity—the notion that criminal law is a last resort (ultimum remedium). The OM typically only pursues criminal cases where civil remedies are insufficient, or where the infringement is large-scale, organised, or poses a significant public interest concern. Think software piracy operations, counterfeit hardware distribution networks, or platforms systematically ignoring takedown requests.
When does a civil IP dispute become criminal?
The transition from civil to criminal hinges on three core factors: intent, scale, and societal impact.
Intent: the decisive factor
Criminal IP infringement requires wilful conduct. This means the accused must have knowingly committed the infringing act, or consciously accepted a substantial risk that their actions would constitute infringement. The latter is known as conditional intent (voorwaardelijk opzet).
Conditional intent does not require certainty. If an entrepreneur receives a formal warning letter alleging patent infringement, conducts no meaningful investigation, and continues the allegedly infringing activity, a court may infer that they knowingly accepted the risk. The Dutch Supreme Court (Hoge Raad) has repeatedly affirmed that conditional intent suffices for criminal liability in IP cases (ECLI:NL:HR:2023:97).
In practice, the OM and courts assess intent by examining:
- Professional knowledge: Did the accused have expertise that would make them aware of the risk?
- Warnings received: Were there prior cease-and-desist letters, settlement offers, or other formal notices?
- Conduct after notification: Did the accused take steps to investigate or mitigate, or did they simply ignore the claims?
- Pattern of behaviour: Is there evidence of repeated or systematic infringement?
For tech entrepreneurs, this means that ignorance is not a defence if it is wilful or reckless. Failing to consult legal counsel after receiving a credible infringement claim can be evidence of conditional intent.
Scale and commercial impact
Not every infringement triggers criminal interest. The OM prioritises cases involving substantial commercial gain or large-scale distribution. A lone developer who inadvertently uses a copyrighted library in a side project is unlikely to face prosecution. A company systematically selling pirated software licenses to hundreds of customers is a different matter entirely.
Similarly, organised infringement—such as coordinated piracy rings or counterfeit hardware supply chains—attracts criminal attention. These cases often involve multiple actors, cross-border elements, and significant harm to rights holders.
Societal impact and public interest
The OM also considers whether prosecution serves the public interest. Factors include:
- Harm to the creative or innovation economy: Does the infringement undermine incentives to create or innovate?
- Consumer harm: Are customers being deceived or exposed to substandard products?
- Recidivism: Has the accused been warned or sanctioned before?
If the case can be adequately addressed through civil remedies, the OM is unlikely to intervene. But if civil enforcement has failed, or if the infringement is particularly egregious, criminal proceedings may follow.
Practical examples in the tech context
Consider these scenarios:
Software licensing violations: A company receives a formal audit notice from a software vendor alleging under-licensing. The company disputes the claim but does nothing to verify compliance. Months later, evidence emerges that the company knowingly deployed unlicensed copies across its network. Conditional intent may be established.
SaaS feature cloning: A startup builds a product feature strikingly similar to a competitor’s patented solution. After receiving a detailed infringement analysis, the startup dismisses it as “noise” and continues development. If the feature generates significant revenue and the similarity is flagged in internal communications, the OM may view this as wilful infringement.
Hardware counterfeiting: A distributor imports and sells devices branded to mimic a well-known manufacturer’s products. Even if the distributor claims ignorance, the volume and branding are strong indicators of intent.
Criminal risks for platform operators
Platform operators face unique risks. Under Dutch and EU law, platforms that passively host user-generated content generally benefit from a safe harbour or hosting exemption. This is codified in Article 6:196c of the Dutch Civil Code (BW) and reinforced by the EU Digital Services Act (DSA).
However, this protection is conditional. Platforms must implement and enforce effective notice-and-takedown procedures as outlined in Article 29c of the Copyright Act. If a platform systematically ignores valid takedown requests, or plays an active role in facilitating infringement, it loses the safe harbour and may face both civil and criminal liability.
When passive hosting becomes active facilitation
The distinction between passive and active involvement is fact-specific. Courts consider:
- Knowledge and control: Does the platform have actual knowledge of specific infringing content? Does it curate, promote, or monetise that content?
- Response to notices: Does the platform act promptly on valid takedown requests, or does it delay, ignore, or selectively enforce?
- Business model: Is infringement integral to the platform’s revenue model?
A platform that earns advertising revenue from pirated content, knows about it, and does nothing, may be found to have acted with conditional intent. Structural failure to enforce notice-and-takedown obligations can be treated as evidence of wilful facilitation.
Implementing a compliant notice-and-takedown policy
To minimise criminal exposure, platform operators should:
- Establish a clear, accessible notice-and-takedown procedure
- Document every takedown request and response
- Act promptly on valid notices (the DSA prescribes specific timeframes)
- Implement repeat infringer policies to demonstrate good faith
- Conduct regular audits of compliance with IP obligations
These measures not only reduce liability—they also provide evidence of good-faith conduct if a dispute arises.
Legal defences against criminal IP allegations
If an entrepreneur is accused of criminal IP infringement, several defences may be available.
Lack of intent
The most straightforward defence is to demonstrate the absence of wilful conduct. This may involve showing:
- Good-faith belief in the legality of the conduct (e.g., reliance on legal advice, prior licensing, or a reasonable interpretation of the IP right)
- Absence of knowledge: the accused had no actual or constructive knowledge of the infringement
- Mistake of fact or law: the accused genuinely misunderstood the scope of the IP right
If the defence can establish that the accused acted in good faith or under a reasonable misapprehension, intent cannot be proven.
Licence or consent
If the accused had a valid licence, sublicence, or other lawful permission to use the IP, no infringement occurred. This defence requires documentation: licensing agreements, email correspondence, or other evidence of consent.
Statutory exceptions
Dutch IP law includes several statutory exceptions that may apply, particularly in the copyright context. Article 18 of the Copyright Act permits use for purposes such as:
- News reporting
- Quotation (citaatrecht)
- Parody
- Education and research
These exceptions are narrow and subject to strict conditions, but if applicable, they negate liability entirely.
Non-prosecution due to lack of public interest
Even if technical elements of a criminal offence are met, the OM may be declared inadmissible if prosecution does not serve the public interest. This defence is more common in cases involving:
- Minor, isolated infringement with no commercial gain
- Disputes over the validity of the underlying IP right
- Civil remedies that adequately address the harm
The Dutch Supreme Court has held that criminal prosecution is inappropriate where the public interest is insufficiently implicated (ECLI:NL:HR:2017:700).
Practical tips for minimising criminal exposure
Tech entrepreneurs can take proactive steps to reduce the risk of criminal liability:
Conduct an IP audit
Regularly review your products, services, and processes to identify potential IP risks. This includes:
- Third-party software and libraries: ensure all dependencies are properly licensed
- Branding and trademarks: verify that your brand elements do not infringe third-party marks
- Patents: if operating in a patent-heavy field, seek a freedom-to-operate analysis
Document licences and permissions
Maintain a centralised repository of all IP licences, sublicences, and permissions. Ensure that these are current, cover the intended use, and are properly executed.
Implement a notice-and-takedown policy
For platforms, establish and enforce a clear notice-and-takedown procedure. Document every request and response, and act promptly on valid notices.
Respond promptly to infringement claims
If you receive a cease-and-desist letter or other infringement allegation:
- Do not ignore it—inaction can be evidence of conditional intent
- Seek legal advice immediately
- Investigate the claim and document your findings
- Engage constructively with the rights holder, even if you dispute the claim
Engage legal counsel early
At the first sign of an IP dispute, consult an IP attorney. Early intervention can prevent escalation and provide a record of good-faith conduct.
Frequently asked questions
When is IP infringement criminal in the Netherlands?
IP infringement is only criminal if it is wilful, serious, or organised. Civil disputes involving genuine uncertainty about the validity or scope of an IP right rarely lead to prosecution. The OM focuses on deliberate, large-scale, or repeat infringement that harms the public interest.
What is conditional intent in IP infringement?
Conditional intent (voorwaardelijk opzet) means consciously accepting a substantial risk that your actions constitute infringement, even if you did not intend to infringe. For example, continuing to use contested software after receiving a credible infringement warning, without investigating or seeking legal advice, may establish conditional intent.
Can my platform be held criminally liable for user-uploaded content?
Generally, no—provided you operate as a passive host and maintain an effective notice-and-takedown procedure. However, if you systematically ignore takedown requests, actively promote infringing content, or structure your business model around infringement, you may lose safe harbour protection and face criminal liability.
What is the difference between civil and criminal enforcement of copyright?
Civil enforcement involves court proceedings initiated by the rights holder, seeking remedies such as injunctions or damages. Criminal enforcement involves prosecution by the OM, with potential penalties including fines or imprisonment. Criminal prosecution requires proof of intent and is reserved for serious cases.
What steps can I take as a tech entrepreneur to minimise criminal IP risks?
- Conduct regular IP audits
- Document all licences and permissions
- Implement a clear notice-and-takedown policy (for platforms)
- Respond promptly and in good faith to infringement allegations
- Consult an IP attorney at the first sign of a dispute
Protecting your business from criminal IP liability
Criminal exposure for IP infringement is rare, but the consequences are severe. The key distinction between a civil dispute and a criminal case lies in intent, scale, and public interest. Tech entrepreneurs who operate transparently, seek legal guidance proactively, and respond constructively to IP claims are unlikely to face criminal prosecution.
That said, the risks are real—especially for platforms, SaaS providers, and hardware distributors. Ignorance is not a defence, and structural failures to address known infringement can be treated as wilful conduct.
If you are navigating an IP dispute, or want to ensure your business is compliant, Law & More offers tailored legal advice for tech entrepreneurs. Contact us for a no-obligation consultation and protect your business from avoidable legal risk.